Blog - Page 3 of 14 - The Certior Group

How to Navigate in a VUCA World?

August 7, 2019 by Avi Kantor

In the late 1980’s the United States Army War College developed the acronym VUCA to describe the conditions that would exist at the end of the Cold War with the Soviet Union. VUCA stands for “volatile”, “uncertain”, “complex”, and “ambiguous”. In hindsight, that did accurately describe what the world was like when the Soviet Union fell in 1991. Since then, the business world has adopted the VUCA acronym to suggest the many challenges that business owners, executives, and managers face. For The Certior Group, because of rapidly changing conditions in the world – for example, in politics, economics, law, technology, social norms, etc. – we’ve adopted the notion that we all live in a VUCA world.

“Everything can be taken from a man but one thing: the last of human freedoms – to choose one’s attitude in any given set of circumstances, to choose one’s own way.” – Viktor E. Frank¹

Some people don’t fully appreciate the profundity of Frankl’s statement. Much of what’s VUCA in our world is beyond our individual control. We don’t control large technology companies or how they gather data about all of us. We don’t control the way government operates. We can’t control the way politics unfolds, or how the natural environment might be changing, or how social media may be changing how we experience our lives. Yet, as Viktor Frankl suggested, we have a choice; we can at least choose our attitude.

Our firm has taken this idea of choosing one’s attitude and artificially divided the VUCA world into two attitudes: personal reactions that are “not Gratitude” or responses that are “Gratitude”. This is clearly an artificial, abstract “map”² of the VUCA world that we live in, not the actual world of politics, Google, the internet, Facebook, Instagram, mobile devices, climate change, pollution, fake news, etc. But, as Viktor Frankl said, by choosing our way, we’re finding that following this “map”, leads to practicing Gratitude.

What does it mean to practice Gratitude? From our perspective, it means to respect, appreciate, and be generous in spirit with others and oneself. It is the ongoing practice of Gratitude that we’ve found to be one of the keys to thriving in a VUCA world. A growing body of research supports the idea that we can become more resilient, despite VUCA in our lives, when we become more grateful. How to practice Gratitude is the focus of our public events, workshops, and client work. Please join us in making Gratitude part of the antidote to a VUCA world.

(1) Man’s Search for Meaning, Viktor E. Frankl, 2006.

(2) In 1932, Polish-American scientist and philosopher Alfred Korzybski published an article in which he stated that “the map is not the territory”, meaning that abstract concepts help us understand reality but should not be confused with reality.

Sustaining Multi-Generational Wealth

July 7, 2019 by Avi Kantor

Garrett Gunderson recently published a provocative article on Forbes.com entitled “How The Ultra-Rich Never Die.”

https://www.forbes.com/sites/garrettgunderson/2019/06/15/how-the-ultra-rich-never-die/

The article’s premise is to invest in future heirs not in traditional investments. What Gunderson means by “invest” is to dedicate time, energy, attention, and resources towards developing the “talents, interests, abilities, and skill sets of those we choose to be the ones who will carry on and benefit from our legacy.” Gunderson’s rationale is that even if these heirs do not grow their inherited financial assets, life insurance can replenish those assets, freeing the heirs to grow as people and contribute to the world. He also touches on core values, traditions, rituals, family retreats, and mission statements. His concluding remark is “invest in people, not products.”

I applaud his focus on people. Traditional multi-generational planning has tended to emphasize legal structures and financial strategies, often to the detriment of the people involved.

Yet, Gunderson’s either/or thinking – that one should “invest” in people, not products – strikes me as somewhat misleading. Shouldn’t it be people AND investments? Without informed wealth management, focusing exclusively on people can become a prescription for undisciplined self-indulgence and waste. True Wealth involves optimizing financial assets to support people and their quest for happiness, joy, fulfillment, and meaning.

“We ultimately ‘live our legacies.’ That is, if we live our lives with high moral and ethical character, we positively influence those around us and the culture of our families. A family culture of high moral and ethical character ultimately will determine if the assets ‘never die.'”

When I look at the challenges of multi-generational True Wealth, I see the opportunity to help family members align around a larger common vision and purpose. In my experience, this means developing leadership character and family culture. As Gunderson suggests, expressing core values, traditions, rituals, retreats, and mission statements are important and necessary. However, these tend to be about external behaviors. I see character and culture as largely internal and about mindset. And I believe that mindset matters.

Finally, when Gunderson says the “Ultra-Rich Never Die”, he means that the assets of the “Ultra-Rich” wealth creators won’t “die” if his or her heirs are well-versed in core values, traditions, rituals, retreats, and mission statements…and buy life insurance. This can be a great overall strategy for some families. In fact, many multi-generational families successfully employ this strategy. I would add that we ultimately “live our legacies.” That is, if we live our lives with high moral and ethical character, we positively influence those around us and the culture of our families. A family culture of high moral and ethical character ultimately will determine if the assets “never die.”

Creating a Lasting Legacy

June 7, 2019 by Avi Kantor

When estate planners talk about creating and leaving a lasting legacy, they usually are referring to investment strategies and legal structures. These strategies and structures recognize the wishes of the wealth creator, protect assets from creditors and lawsuits, and encourage future family philanthropy. Successful wealth creators often want to create and leave a lasting legacy; they would like to be remembered for their success. Often they have strong opinions about what inheritors should think, believe, and do with their lives. Planning documents and wealth preservation strategies generally reflect these opinions and the values of the wealth creators, not necessarily those of the wealth inheritors.

Do these legal and investment activities, in fact, lead to a lasting legacy? The statistics aren’t encouraging. Studies indicate that an extremely high percentage of family wealth is dissipated by the end of three generations. From my perspective, the reality that most legacy plans exclusively reflect the thinking of the wealth creators works against their vision for a lasting legacy.

What’s missing? Many planners focus on philanthropy as a means for sustaining families. Philanthropy can be a catalyst for discussions on family values, family history, and the vision that family leaders have for the future. Done thoughtfully, philanthropic efforts can create a rallying point and become a source of pride for a well-intentioned family. But there are other reasons people donate. Many donate primarily for tax purposes. Others want the recognition that often comes with large donations. I’ve even heard of people who donate so that they can be invited to the “best parties” that are frequently associated with charitable fundraising.

One of our collaborators says that we don’t really leave a legacy…we LIVE our legacies. To me, this means that the way we live each day creates a legacy – positive or negative – over our lifetimes. I’ve observed that families that are intentional about living their values – that is, discussing and acting upon their visions and ideas about what their best lives can and should be – these families develop leadership character and culture among family members. The ability to nurture and grow strong family leadership and a positive, sustainable family culture is, in my opinion, what’s missing in estate planning today. Wealth creators would be better-served if, in addition to great strategies and structures, they could develop a process for the ongoing development and contributions of current and future family members.

The Secrets of Happy Families

May 7, 2019 by Avi Kantor

In the late 1990’s, one of our co-collaborators Lee Brower read a statistic published by the Family Firm Institute, a Boston non-profit that focuses exclusively on family-owned businesses; over 90% of family wealth is lost by the end of the third generation. Even today, this dramatic loss of family wealth continues to occur, despite the best efforts of the best attorneys, accountants, wealth managers, insurance and financial planning professionals. Lee, his firm Empowered Wealth, and many others, including The Certior Group, have wondered why this happens and, more importantly, what can be done to counter or prevent this from occurring.

Many ideas have resonated with us and informed our evolving thinking on this matter. If you’ve ever engaged in multi-generational estate planning, you know that there are numerous sophisticated planning techniques and structures available to families. Aside from the unique advantages of certain Wyoming-only strategies such as private single family trust companies, we’ve chosen not to focus on legal structures but rather on facilitating a flexible planning process that encourages inter-disciplinary collaboration among advisors, including skillful, experienced attorneys.

Much of our practical thinking is now focused on how to build and maintain a healthy family culture as an essential, often overlooked element in sustaining family wealth. To this end, New York Times columnist Bruce Feiler published a book in 2013 titled “The Secrets of Happy Families“. In it, he lays out the theory and the research that supports the notion that families that know their histories – their family narratives – are happier, more resilient, and more cohesive.

One way that we help families capture and organize their family narratives is by employing an Empowered Wealth tool and exercise called the TimeMap. As Bruce Feiler might suggest, this exercise identifies key people, events, milestones, learning experiences, and most importantly, the stories that in the aggregate form the essence of family narratives. Our experience aligns with Feiler’s: that is, most families are not intentional about telling their stories. However, once they realize the importance and value of capturing and making those stories part of the family’s traditions, those families that know their narratives have a better chance of defying the statistics and sustaining their families’ wealth.

Getting Out of Our Comfort Zone Using Experiential Learning

April 7, 2019 by Avi Kantor

The Certior Group recently co-sponsored a skiing/learning event under the auspices of the Jackson Institute – a collaboration with Activ8 and Empowered Wealth.

Much of the event focused on the concept of our “comfort zone” and getting out of that comfort zone into the “learning zone”. The basic idea is that we don’t learn when we “play it safe”. We learn “experientially” when we are uncomfortable; when we must deal with and overcome our fears and anxieties.

Experiential learning was most obvious during the second afternoon of the event when the skiing conditions were the most challenging.

A few of the participants reported moments of effortless skiing; perhaps even a “flow state”. Steven Kotler, author and researcher on flow states, suggests that a 4% differential between a challenge and one’s skill level (i.e., 4% out of one’s comfort zone) is the sweet spot for learning and getting into a flow state. ¹ The insight here is that achieving and sustaining “flow states” is the key to high performance in skiing, sports, business, and life.

In the end, all participants regardless of skill level said that they enjoyed the skiing. By supporting others to become the best that they can be, we also created numerous shared experiences. Upon reflection, I suspect that for most of the participants the event wasn’t primarily about the skiing but rather the personal connections made and the many lessons learned.

1) Frequently Asked Questions on Flow, www.stevenkotler.com

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