“They made the choice to invest in the family,” Dr. Jaffe said. “They’ve seen that the quality of the people in the family and who they are is going to determine if the family succeeds in the future. The business decisions are important, but they’re really derived from the quality of the family.”
In some ways, what these families did was not dissimilar from what affluent, education-focused parents do with their children, he said. They spare no expense for school, tutors and sports that will give their children an edge. But in the case of the families he studies, they have the added benefit of a coterie of advisers to insure the children understand finance, business and family governance.
What Staying United Entails: Family first sounds like a cliché, but Dr. Jaffe said his research found that second and third generations in successful families with wealth focused on including people in business and the family decisions. It goes hand in hand with the need for mutual respect and engagement from family members who may not live close to one another.
“The decision in the second, third generations to create a great family involves transparency, respect and engagement,” he said. “It flows from the fact that because we’re wealthy we want to invest in some sense of us as a family. It’s not ‘we all have money, let’s pat ourselves on the back and enjoy it.’”
Why They Do It: It’s not about the money — they’d have plenty of it without the family business. It’s about their legacy, and all that entails. It’s continuing what their relatives created and expanding and adapting it as the years go on.
“To keep this entity together, they have to develop a respectful, positive, useful way of working together,” he said. “They have to collaborate because there’s going to be conflict and stress.”
He pointed to families like that of John D. Rockefeller or the one behind King Ranch, founded by Richard King and his wife, Henrietta, as examples of families that have stayed together through difficult times.