The Autopoiesis of Preparation
My last post suggested that preparation has a substantial impact on succession. To recap, the central notion was that advisors spend a great deal of time with their clients planning for succession, but not nearly as much in preparing them. I suggested that families are increasingly seeing this gap and are looking to close it. They aren’t finding many who can help them. Part of this is because the market has not kept pace with the need; there is no established profession specifically charged with preparing families. Planning can be monetized in the sale of products and services. In contrast, preparation has no industry that supports it. As a result, families are left on their own with a few advisors whose business models and core skill sets are fully focused on preparing the family for key transitions.
The post presupposed that the nature of preparation is clear. Some people who responded spoke about preparation, but clearly remained focused on planning (as though they were the same thing – they are not.) Some responded with ideas of “education,” and others seemed to talk about the preparation of the parents, but didn’t address the preparation of the rising generation. Others seemed to understand that the preparation lies in developing the capacities and capabilities of the rising generation. With this much confusion about what preparation looks like, I thought it worthwhile to focus on how successful families actually prepare.
In this piece, we will take a deeper look at how families prepare for transition. To a certain extent, this work is autopoietic (it is self-reinforcing and self-generating). The word autopoiesis first appeared in the international literature in 1972 in an article by two groundbreaking Chilean biologists, Francisco Varela and Humberto Maturana. They suggested that living beings and ecosystems may be seen as systems that continually produce themselves. An autopoietic system brings itself forth. It is at once the source of its own activity and the outcome of that activity - its processes constitute its identity.
This self-renewing dynamic is very much in play in families that prepare well. Autopoiesis goes to the heart of a critical distinction between planning and preparation. Often planning is episodic, linear and set. It is valuable for those reasons - it provides a sense of direction in a chaotic world. In contrast, preparation can be seen as continuous, self-reinforcing, recursive and adaptive. It is what allows living systems to survive in a chaotic world. Planning is often exogenous to the system (it is a conceptual map of what will be done to shape the system). Preparation, by contrast, is often endogenous - it is something that is happening within the system.
I have had the good fortune of working with a number of families that have become well-prepared. From colleagues, I also know of many others. These families differ in many ways, but also have some things in common. Successful families tend to demonstrate the following commitments:
First, they are committed to cohering as a family.
Second, they view their financial wealth through the eyes of stewardship.
Third, they become a learning community.
These might be seen as the three golden principles of successful transition. Yet beneath each of these is a structure of commitments and practices necessary to create and sustain the outcomes reflected in these principles of success. Let’s take each in turn.
Cohering as a Family
As my dear friend Joe Paul suggests, it is axiomatic that in family succession, trust is more important than love. For a family to cohere, they must come to trust each other. Trust in family systems is as elusive as it is complex. I find that the most enduring forms of trust rest first in a common commitment to core moral purpose. I trust those whose motives I understand. If I truly believe you and I are headed in the same direction and committed to the same general outcomes, then I will be more likely to trust that your agenda and mine, while not identical, are close enough to allow us to trust one another. I have written about this elsewhere – it is what I refer to as enacting moral imagination. Moral imagination can be seen as existing where personal presence meets character meets purpose meets service to something beyond the self. This goes well beyond what most people talk about in terms of “mission” or “vision”. Those are pale intellectualizations in comparison to the power of the kind of grounded commitment based on a common commitment to one another’s deep well-being. One way to develop this sense of moral imagination as a family is to generate dialogue that allows a common dream to emerge – to create a story of the future that meets people’s individual and collective needs. If this preparatory work is done well, it will generate a sense of common purpose that binds the family together and will be expressed in their wanting to spend time together in community. Yet this collective sense is not enough.
Trust also requires that each individual be sufficiently autonomous to be authentic. Families that cohere are candid with one another. This is not a cruel candor, but one borne by sincere self-disclosure without fear and the ability to give honest feedback in environments that foster honest engagement. These skills are learned over time. Families that cannot be candid will not succeed. Neither will families who cannot find kindness in candor. As Patrick Lencioni suggests, a lack of commitment (and drift) is often premised on these failures of trust and fears of conflict. To confront difference head-on and seek to resolve it is essential to trust. When fear leads to weak commitments, failures of accountability follow. (Lencioni, 2002.) Then results suffer. This kind of communication is often a matter of both training and practice.
Beyond candor, each family member must be allowed to live a life of purpose and meaning as they define it. Positive psychology tells us that to be happy, we all need to have a sense of our competence in the world and to be connected to others. Each of us needs these in differing ratios, but the recipe for deep and abiding happiness lies in our efficacy and our engagement. Too often, wealth derails these drives of competence and connection – wealth can foster dependence and infantilization, and it can serve to isolate and numb. Families that succeed launch their children into agentic adulthood, but they also do much to ensure that differentiation in adulthood is not at the expense of a mature and willing commitment to family. These are not seen as competing but rather as complementary to a holistic arc of human growth.
The development of a common purpose or shared agenda that speaks to the heart and inspires commitment to something bigger than self-interest, coupled with honest communication among differentiated family members, seems to be a required competency for good succession. Developing these competencies requires acquiring skills in deep listening, anxiety management, and synthesizing divergent points of view. They involve processes and commitments to personal maturation and growth within the family community. All of these must be practiced – planning alone will not produce these results. To achieve this, most often consultative intervention is useful if not downright necessary. As the family learns these skills within the moral fabric of its culture, it moves beyond planning and onto the path of preparation.
Stewardship
Beyond purpose, candor, and care, the family must come to a point where it develops a deep commitment to stewardship. Having moral imagination helps with this – there is a shared sense of what financial wealth is intended to serve that moves beyond mere self-indulgence to broader engagement, bringing meaning and significance to the family. Of course, the money must be enjoyed - this is not a grim commitment to some form of post-modern Puritanism - but there is, with that, a recognition that the dissipation of financial wealth will be inevitable over a few generations if larger purposes are not honored and actively at play. If a family cannot find a way to produce more value than it consumes, financial capital will dissipate.
The capacity for stewardship requires individuals to develop core literacies about wealth. They must know how money works and practice good financial habits. They must know how wealth works and become fluent in the ways of trusts, entities, and the interlocking connections that support them. Part of this involves becoming skilled at working with their financial, legal and tax advisors. Beyond wealth and financial literacy, they must learn to make good decisions collaboratively. If they are in business together, they must understand what it means to be great owners, managers and directors of family enterprises. And they must learn how to use philanthropy strategically. These five literacies – financial, wealth, governance, business and philanthropic – are preconditions to good stewardship practices.
Beyond individual preparation, there is work to be done in developing the family as a whole. The family must co-labor (collaborate) to structure their wealth to survive generational transitions by creating estate plans that will work with their family dynamics. They must also develop the capacity to agree among themselves and make collective decisions that both preserve and grow financial capital. They must learn to take appropriate risks collectively and act in rough concert to engage in the work of succession (which is, after all, a team sport). These habits of stewardship must become the disciplines of everyday life for families who will weather the inevitable choppiness of transition.
All of this requires not only planning but participation in the development and execution of those plans. This requires implementing good principles developed in design thinking paradigms. Plans created behind closed doors often don’t work as designed and are, at best, sub-optimal. This is why Warren Buffett has repeatedly said that, at some point, the rising generation must be involved in the plan’s design and development. To gain that voice, the rising generation will have developed individually and collectively to make that participation meaningful and productive as stewards, not mere consumers, of the wealth. As the rising generation participates in designing its own collective future, it becomes more responsible and empowered in healthy ways.
Learning
The final golden principle of preparation can be seen as the evolution of the family as a learning community. If you were paying attention, you can already see that learning is essential to the development of both stewardship and familial coherence. But what are the elements of this learning community? Many things contribute to learning.
One way to think about the core skills required is to maintain an open mind, an open heart, and an open will.
There is the old story of the Zen master, Nan-in, who received a university professor. As they began their conversation, the university professor made many observations and drew many conclusions, and had grand ideas about the nature of Zen. After some conversation, tea was brought in, and Nan-in began pouring the tea from the pot into his guest’s cup as the professor continued a long, convoluted discourse about an obscure point. Nan-in continued to pour, and eventually the cup began to overflow. The professor, all of a sudden, noticed the saucer filling up and, with alarm, said, "Stop! The cup is overfull. No more will go in!" Nan-in replied, "Like this cup, you are full of your opinions and speculations. How can you know zen unless you first empty your cup?"
We are often “overfull” with thoughts, emotions, needs, opinions, judgments and so on. To be a learner requires an open mind – a recognition that “certainty” is merely a feeling, a sort of mental indigestion. This humility allows us to “empty our cup”. Learning requires this spirit of inquiry and curiosity about others, ourselves and what the future holds.
It also requires an open heart – the ability to listen simply to others with a spirit of curiosity. We need not agree or endorse what others are saying. Still, learning requires that we suspend our need to impose ourselves and instead host the other person, giving them the honest opportunity to participate fully in the process. In her wonderful book “More Time to Think”, Nancy Kline talks about giving people space to explore their feelings and ideas. This gift of equanimity in our listening to others is critical to their learning something new. We do not learn if we repeat the same things over and over – we learn when we explore. The more consulting work I do, the less I believe that I am changing anything. What I am doing is helping people find the space to think and then the courage to act in innovative ways rather than out of habit. That hosting requires an open heart.
And finally, learning requires an open will. We all want to control outcomes, and we are all uncomfortable with ambiguity and uncertainty. We lock onto quick solutions or push our positions. But learning requires that we suspend ourselves for a time in the liminal space of not knowing the outcome. This requires us to manage our anxiety and to provide a calm presence for others that will contain their anxiety. This non-anxious presence is the precursor to learning that leads to greater individual and collective maturity.
Beyond this, we must allow for real failure. People learn not by doing things perfectly, but from failure – and often repeated failure. Failure is inevitable, and rather than seeing failures in practice as failures, these experiences become feedback. Gaining any skill comes with falling short at first. But with practice, preparation takes root. And after enough practice, the family has developed the adaptive capacities to succeed when it counts. Letting go of the need to control perfect outcomes becomes essential to the sort of preparation necessary to succeed.
When failure does happen, the immediate response is often to rescue or fix the problem to make it perfect. It is often better to explore the failure, own it, and truly understand what it has to teach us about ourselves and our work together. Realistically, as part of this learning, families must come to grips with situations where failure is persistent and learn how to contain and manage stubborn failure points to protect the overall good of the whole. As one family member put it, the jump from one fishbowl to the larger fishbowl may result in “fish on the floor.” Learning how to address these real-world problems is a necessary part of succession.
Conclusion
To learn effectively, families must eventually find the simplicity beyond complexity – they will need to find resolution, not live in ambiguity forever, or fall in love with process for the sake of process (which, in its uglier forms, looks like falling in love with drama for the sake of drama). Yet to move into these spaces of great clarity, it is a necessary reality that families are inevitably required to hang suspended for a moment between the two trapezes of the comfortable present with its known devils and the unknown future and unexplored terrain of individual and collective growth.
The capacity to approach those times of suspension with an open mind, an open heart and an open will can make all the difference between forward movement and transformation or being sucked irrevocably into the common patterns that sabotage transitions. There will be failures, and until the art of the trapeze is mastered, there is a need for nets. But at some point, as the real transition approaches and the family has adequately prepared and practiced, they will have acquired the ability to soar above the ground without nets. It is then that good plans will be well-executed with successful outcomes. The family will cohere, and they will steward wealth with skill. They will have learned and will set up the patterns necessary to continue learning as they face new adaptive challenges together.© 2015. Matthew Wesley. All rights reserved.