Tag Archives: Edgell Pyles

07/7/17

Wealth Transfer And Human Capital

This week I am continuing to present ideas and passages from Maps for Men: A Guide for Fathers and Sons and Family Businesses by father and son authors Edgell and Thomas Pyles.

On page 186, the Pyles’ reference Family Wealth: Keeping It in the Family by attorney and family business consultant James E. Hughes Jr. According to Hughes, the top reason for failure of transferring wealth across three generations “is that family leaders concentrate on the family’s financial capital to the exclusion of its human and intellectual capital.”

The Pyles’ go on to present results of a study by Dr. Dennis T. Jaffe with Wise Counsel Research. The researchers identified a set of seven core qualities common among families whose net worth exceeds $200 million who, through at least three generations, have successfully transitioned their wealth. Among these: Active development of human capital.

When it’s so important, why is this core quality so often neglected? The Pyles’ research shows that the reasons are primarily psychological. Loss of trust, lack of communication exact a high price. Building relationships among family members; accepting weaknesses, developing strengths, encouraging ambitions, imparting values is essential for transitioning “talent” capital through the next generation, and thus ensuring the successful transitioning of monetary wealth as well.

The Pyles’ issue a warning: “Considerable creative and constructive effort can be directed at crafting sophisticated trust documents, elegant business plans, and family constitutions, but the keys to implementation are locked up in the family psychology.”

06/23/17

Maps For Men—A GPS For Fathers And Sons

In my previous newsletter and blog post I referenced one of the most important books on my family enterprise bookshelf: Maps for Men: A Guide for Fathers and Sons and Family Businesses, authored by Edgell and Thomas Pyles—father and son.

The Pyles’ argue that for a family business to be successful fathers and sons must consistently confront sensitive situations and implement crucial decisions—both financial and emotional—in a forthright manner. They believe there is no room for passivity or neglect.

Early in the book the authors acknowledge their deliberate exclusion of mothers and daughters from their discussions—a point of contention which has been raised when I have spoken to others about their book. They write that they have a “deep appreciation for the heroine’s journey, the role of the mother in the family and the leadership provided by women in the business world.” They also recognize their concepts with regard to men may parallel a woman’s journey. However, their work is directed toward helping men understand their relational and generational issues.

The authors define their purpose for the book—set up a framework to help fathers and sons understand and solve their personal and professional issues, improve their communication and decision-making skills and achieve a leadership advantage in growing and managing a family company. Their premise—the way fathers and sons live their lives will be decisive for how the business turns out.