Familosophy v7#4 - April 2024

Q. What do you do?

A. I help families make good decisions together.

It took a while to come up with something succinct to describe what I do. For some years, I used the term “family governance” and people’s eyes would glaze over. What does that actually mean? The term had connotations of formality and its use in other contexts didn’t make sense for many family members. The focus on decision-making is more practical, and we can break this down further into three steps.

1. Making decisions: simply making a decision can sometimes be challenging in a family context. Here are some examples: What should we do with the family business? How much should we give our children? Who should get to use the family holiday house this summer? Some of these are big and difficult decisions, and others are relatively small but still important. Because of their context, there is either a lot at stake, or other factors (like family) that make the decisions challenging. And when things get hard, we often play the avoidance or procrastination game. That means either defer or don’t make a decision. Leave things as they are. Don’t upset the applecart.

But a non-decision is itself a decision: not to do anything. And that (non) decision can have a cost. Sometimes it’s an opportunity cost: the loss of other alternatives. Sometimes a non-decision can allow a situation of latent conflict to fester. So the first step is to understand that everything is a decision.

2. Making good decisions. We generally make good decisions by following a process. That means clarifying that the question we are asking is in fact the right one, then collecting the information we need so that we are well-informed as to the options, establishing criteria by which we evaluate the options before us, and finally making the decision and putting it into action. For “who should get the holiday house this summer?”, a more relevant question to consider might be “what benefit is there to having a family holiday house?” In any event, to decide who should get use of the property, we might look at previous use and seek to make it as equal as possible across the family, poll family members as to their plans, and then decide.

3. Making good decisions together. The earlier decision examples have multiple stakeholders, but the decision may still be made by just one person – the one in effective control. But just because one person has the legal power to make decisions on behalf of the family, doesn’t mean having them make those decisions will deliver the best outcome for the family. In situations where the decision maker chooses to allow others into the decision, or where multiple family members do have decision-making power, things suddenly become far more complicated.

Before you even start the process, you need to clarity on who the decision-makers are. Again, decisions about decisions. Who is at the table? Your children? From what age? How about their partners/spouses? Does everyone who is at the discussion table get a vote? Do the parent’s votes count for more than that of the children?

Then, the people at the table need to follow a process to a good decision. Because there is more than one person involved, they need to reach consensus about every step. The group may choose to delegate some aspects to individual members – exploring options, suggesting criteria – and then regroup to seek agreement. Having a collaborative environment where family members are all heard and feel included not only leads to better quality decisions, but decisions that will more likely be well accepted by all stakeholders (rather than imposed on them).

This process isn’t easy, nor does it come naturally for people. The diverse interests of family members, different personality styles, and family power dynamics all make this quite challenging for families. Learning how to make good decisions together is one of the fundamental things successful families do.

Conversation Starters: Who makes decisions in your family? What process is followed (assuming there is a process)? How are decisions communicated to stakeholders? What clarity is there for family members as to how decisions that affect them are made?

For further reading on this topic and further discussion, click here