Family: The Compact Among Generations
by James E. Hughes Jr.
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Book Summary Information
Author: James E. Hughes Jr.Edition: Hardcover
Audio: English (Original Language); English (Unknown); English (Published)
Published: 2007-08-15
ISBN: 1576600246
Number of pages: 315
Publisher: Bloomberg Press
Book Reviews of Family: The Compact Among Generations
Book Review: A unique look at families in business
Summary: 4 Stars
MY RATING SYSTEM:
* - if you have to chose between torture and reading this book, then you might want to consider reading the book - although it depends on just how severe the torture would be.
** - if you've lost your job and have quite a bit of free time on your hands, and don't have anything else better to do, then you might want to consider reading this book; don't expect to learn much or really be entertained. It will however, help you pass the time until your death.
*** - meh...I'm indifferent. Reading this book will not alter your life in any significant way, yet it is not so horrendously dreadful that your taking the time to read it will be a complete waste of time.
**** - Good book to great book zone here. You should probably read this book if you have some spare time. This book could be interesting, entertaining, or informative.
***** - Outstanding book! Make time to read this book - you'll learn or be entertained or intrigued. The book might even be good enough to provide original or helpful insights into the world that we live in.
REVIEW:
In his first book, Family Wealth, James E. Hughes Jr. first set out his belief that the goal of business families should be to enhance the human and intellectual capital of the family. While this same theme permeates throughout Family: The Compact..., Hughes' second book takes a much more round-about journey through the ideas and philosophies that contribute to the family dynamic and influence its success. While a great deal of the book contains a survey of philosophical, anthropological, and psychological ideas and how they relate to families in business and how such families can increase their likelihood of seven-generation success, there are some very important ideas that I picked up as I read. Below I'll set out some of the main themes of the book and some other valuable nuggets of wisdom that I took away from it.
Hughes continually references the idea of 'seven-generation thinking' - viewing the family as an entity that will continue to thrive for seven generations - and maintains that families who adopt this mindset and seek to ensure the well-being of the family over the very long run will improve their odds of avoiding falling prey to the 'shirtsleeves-to-shirtsleeves in three generations' proverb.
Another notion that Hughes discusses often is that of a 'family of affinity'. Hughes claims that families should be defined, not by blood only, but rather by certain bonds of affinity, and that excluding those who share those bonds because they don't share blood (think in-laws, spouses, etc.) fails to adopt the philosophy that a family should seek to enhance its human capital. While the issue of in-laws and non-blood family is often a tricky one to deal with in practice, and while Hughes doesn't offer many practical tips on how to deal with the tensions, jealousies and other difficulties that often arise in such situations, I would imagine that he would subscribe to the school of thought which holds that where a set of shared values exists among those individuals, any problems can be resolved. Not everyone needs to have the same goals, but shared values would be immensely influential in achieving a harmonious relationship.
On the issue of individual goals, Hughes highlights one of the most difficult challenges faced by families in business, especially those of the second generation - how to prioritize the goals and dreams of the second generation when they are different from those of the first. Hughes states that family members must assist in the individuation and differentiation of the second generation, and help each member of that generation to achieve his or her own personal dream. In the long run, a family comprised of members that follow their own paths in life is likely to achieve greater happiness and success than a family comprised of individuals who are forced or coerced into roles and lives that they would otherwise not choose for themselves. Hughes also mentions that without the emergence of a new dream from the second generation, the first generation's dream is likely to fizzle out and the enterprise will suffer. His prescription for dealing with the 'new' dreams of the second generation is for the family leadership to recognize those dreams and the conflicts they may present and attempt to integrate those dreams into the family's vision. As he states, "Unless [the family] incorporates the aspirations of new generations, it cannot attract them."
On the role of the family in the management and ownership of the business, Hughes observes that from his experience, most family businesses fail because of poor ownership, not poor management. Hughes introduces the role of 'steward-conservator' for members of the family, suggesting that all family members be engaged by the responsibility of ownership and creating the strategic vision for the company. Personally, I find Hughes' discussion of this issue somewhat unsatisfying. While I believe there is merit in what seems to underlie his view - that a family that engages all members is more likely to succeed over the long term - I wish there was more discussion of how to organize family governance structures in practice. For example, it's not clear whether Hughes means to suggest that as steward-conservators all family members should be active in setting the strategic vision of the company in the same way that a board of directors might be considered to set the strategic vision. If this is indeed his suggestion, then I respectfully disagree. In my opinion, deciding upon an appropriate strategy is not a simple task that should be entrusted to anyone merely on the basis of their family status. I am of the opinion that while family might be best intentioned, they are not always best able. Ultimately, I believe that ability (which is most often developed through education and experience) should dictate who is responsible for setting the strategic vision, since such a task demands sophisticated, analytical and engaged minds. Also it must be remembered that those who are best able to manage the business are not always the ones who are best able to set its strategic vision. All that being said, I do agree with the idea that all the family should be engaged with/by the business, but perhaps this is better achieved through a family council or assembly that engages the board of directors and re-affirms the family's shared set of values which serve as a framework within which the strategic vision must advance. I would be very interested in reading more about Hughes' clients and the various governance structures that were used, and the relative advantages and disadvantages of each.
One last idea that I'll mention is that of the 'leader from behind'. Hughes references Lao Tzu's notion of the leader 'who is never seen, never heard, and never felt, but is revered for one thousand years by his followers for his excellent leadership' or more commonly described as the leaders who's followers say 'we did it ourselves.' Hughes states that this type of 'leader from behind' is the type of leader that is important in family businesses, especially in the second generation, because this type of leader can maintain a sever-generation outlook and encourage individual family members to follow their individual dreams, thereby enhancing the family as a whole.
All-in-all, I found this to be another interesting book from Hughes, and although personally I wasn't a huge fan of the some of the extensive anthro, psych, philo discussions, that content definitely demonstrates the level of passion that Hughes has for the subject matter and the depths to which his life's journey has taken him in search for the many bits of wisdom that might help families avoid the 'shirtsleeves-to-shirtsleeves' proverb.
Summary of Family: The Compact Among Generations
Family Wealth has become a modern classic for exceptional families and their advisers with more than 20,000 sold in hardcover. In this new, major work, James Hughes brings to bear decades of experience working with and studying families to offer panoramic insights into what makes families flourish and fail. This book lays out the basis for the vision of family governance the author has been developing through his work and research. His advice addresses not only what to do but how to think about the complex issues of family governance, growth, and stability and the ongoing challenge of nurturing the happiness of each family member.General Books
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