It may sound contradictory, but constraints can be delightfully liberating. Faced with the possibility of doing anything, some times, the natural reaction is to do nothing. Anyone who has sat down in front of the Cheesecake Factory has experienced this firsthand.
Family offices experience this as well. Part of the power of a single family office is the flexibility it has in tailoring itself to meet the needs of the family. Yet this ‘blank page’ approach to the building of a single family office makes doing so all the more challenging.
While often, a business or organization is defined by what it is / what it does, sometimes what speaks most clearly about the business is what it is not or does not do. Yet, family offices sidestep many of the most common dividing lines of organizations. Consider the following examples:
- For-profit / non-profit – Most family offices are not run for commercial intent – i.e. they are not pursuing a profit maximization goal. Yet, unlike other ‘non-profits,’ they are not pursuing a social good typical of a charitable mandate.
- Single discipline / speciality – Most professional services firms are focused on a single discipline such as tax, legal, or investment management. A single family office may offer a wide range of services to the family.
- Type of client – Single family offices are both a niche and broad offering. They are niche-focused organizations as they only offer their services to a single family. But as the family grows over time, the family office may serve an exceptionally broad range of client types – from octogenarians navigating end of life planning to college students learning to build a household budget for the first time.
- Part of the family but not the family – One does not need to be an avid fan of Downton Abbey to be aware of the upstairs / downstairs dynamics of those whose work in service to support a family. Long time employees of a family office likely attend family vacations, gathering, weddings, and funerals. There is an embedded tension in that those critical individuals may in some ways feel like part of the family, but are not family members in themselves.
These four examples are neither good nor bad in themselves. They instead only represent tensions and management dynamics that the office should be aware of and ready to navigate.