The Two Secrets of Preserving Wealth & Driving Continued Success over Multiple Generations

Why is it that some of the world’s wealthiest families have known success over three, four, five generations or more, while others—in fact most ultra-wealthy families—have seen their wealth dissipated more quickly; have seen their business or philanthropic enterprise end after only a generation or two; have suffered the agony of devastating family conflict?

In my experience, the families who have been able to achieve multigenerational success have learned two critical secrets that others haven’t, and they’ve found a way to create a family culture that is rooted in those two secrets.

The first of these two secrets is the necessity of consciously and methodically doing everything we can to drive alignment in the family around a set of defining values. This is so important an attribute of successful families that if you were to ask me to identify one thing, and one thing only, that is the single best predictor of long-term success in families, I’d answer that it is the extent to which the family is aligned around their defining values.

I call this set of values the family’s why in life; their shared answer to foundational, philosophical questions with which ultra-wealthy families should grapple. Many of these questions begin with the word why; admittedly, some do not; but all of them, in the aggregate, go to matters of meaning, identity, vision and purpose. Questions such as, why was it important to us to build this wealth in the first place? Why were we prepared to make the sacrifices we did to accumulate it? Now that we’ve built it, why is it important to us to steward it for future generations, rather than simply consume it all ourselves? Where we feel the drive to give back, why do we feel that impulse so powerfully? Most fundamentally: what is it all for; where are we going together in life; how will we know if we’ve veered off-course; and how will we know when we’ve successfully arrived?

The philosopher Friedrich Nietzsche wrote “if you have a why in life, you can endure any how.” I think Nietzsche’s aphorism, translated to the world of ultra-wealthy families, means that a family that has a strong and shared sense of their why in life can confront almost any challenge or obstacle they will face in their life together as a family.

Here’s the second, admittedly paradoxical, secret. Families who succeed over multiple generations understand that, no matter how successful they are in driving alignment around their why in life, nevertheless there likely will come a time when they disagree, perhaps profoundly, about something important to them as a family. And when they do, especially if they are engaged in some form of common enterprise such as owning and running a family business, or engaging as a family in philanthropy or simply investing together, they need a way to make decisions in a way that will manage that disagreement. In my experience, when they don’t, disagreement over shared family enterprise often spirals into all out family civil war.

In the balance of this article, I’ll discuss how families may build a family culture that is rooted in their understanding of these two secrets.

| Articulating and Driving Alignment Around the Family’s Why in Life

Some families have a natural sense of their why; it develops organically over time, without conscious thought or effort. It’s simply in their genes. Other families have to work at it; they have to tease it out; they have to work to find it. The best process I’ve found for families who need to find their why in life and drive alignment around it is to work together as a family to create a family mission statement.

A family mission statement is a family’s uniquely personalized statement of their why. While every family’s mission statement is different, mission statements generally should express the family’s vision of who they are, how they’re different from other families and what they seek to perpetuate; their sense of purpose and meaning; their understanding of their family history and traditions; their expression of the legacy they wish to pass on to future generations.

"...mission statements generally should express the family’s vision of who they are, how they’re different from other families and what they seek to perpetuate; their sense of purpose and meaning; their understanding of their family history and traditions; their expression of the legacy they wish to pass on to future generations”

The process of creating a family mission statement can be one of the most intensely unifying and powerful experiences in the life of the family. That assertion often engenders a fair amount of skepticism. After all, how can it be that a mere piece of paper—and one that is not even a binding, legal document at that—can be so powerful a force? Of course, the answer is that the force and impact derive not from the mission statement itself—as strong and powerful as it may be—but from the process of creating it, revisiting it on a regular basis, evaluating whether we’ve followed it and, if we haven’t, making the necessary course corrections that will put us back on track.

It’s sometimes tempting for families to avoid the process of revisiting, evaluating and adjusting, so it’s worth emphasizing what that’s about and why it’s so important. In that regard, the families who ultimately succeed in weaving the family mission statement into the fabric of their life together as a family are the families who return to it periodically and ask themselves four critical questions:

Do we still believe it? Does our family mission statement still accurately reflect our values as a family?
If not, what do we have to do to change it, so that it will be accurate again?
If it still is an accurate expression of our values, vision and mission in life, have we lived our lives in accordance with it?
And if not, what do we need to do to get back on track?

If families answer those questions honestly, the answer to the third question almost always will be some version of no: “not really,” “not all the time” and sometimes a flat out “no.” That’s because the essence of being human is making mistakes, getting it wrong—we do things we wish we hadn’t done, say things we wish we hadn’t said. Some of us may be off track more often than we’re on course. And that makes the fourth question the most important one: we committed to one another that this is our mission; we’ve just acknowledged that we’ve veered off course; now, what do we have to do to get back on track?

Photo by ©Zegna
Photo by Vinkfan.

Because the reality is that all families—happy and unhappy, healthy and dysfunctional—get it wrong from time to time. In this regard, the difference between successful and unsuccessful families is not that the successful ones don’t get it wrong; it’s that the successful ones continually find a way to try again, to get back on track. For some families, the way they get back on track is by recommitting to their family mission statement and making the mid-course adjustments that are necessary. Where the family mission statement plays that central role in a family, it becomes the ultimate expression of their why in life, and functions as their destination (where are we going together in life as a family?), their flight plan (how are we going to get there?) and their compass (if we’re off path, what do we need to do to get back on track?).


Maintaining success over multiple generations requires that families have a way to manage the disagreements over shared family undertakings that inevitably will arise. I advise families that, to manage the potential for devastating family conflict, they need to create normative decision-making frameworks that will enable them to manage disagreement relating to their family business, philanthropy or investing. Those frameworks often take the form of some type of governing body, such as a family assembly or a family council, and may employ documents such as family constitutions or family bylaws.

In order to be effective, I advise that these normative frameworks should have three essential attributes: they should be rule-bound; they should operate with complete transparency; and the processes they employ should be repeatable.

When families consistently employ a normative, decision-making framework, the framework itself tends to take on increasing moral and persuasive force and stature, gradually becoming so established a part of the family’s ethos that it becomes very difficult to challenge a decision made by the family’s governing body employing its normative framework.

Over time, the decision-making framework itself becomes one of the things the family points to as differentiating it from other families. When we get to that stage, the decision-making framework, together with the family’s alignment around their why in life, provide the essential foundation for the family’s enduring, multigenerational success.

Glenn Kurlander

Head of Family Governance and Wealth Education, Morgan Stanley Wealth Management.