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When a Family Member "Checks Out" from work

When a Family Member "Checks Out" from work

Mr FamilyOffice
April 12, 2024

When a Family Member "Checks Out" from work

We’ve all seen people check out at work. People get bored, they get into a funk, there may be issues outside work impacting them. Productivity wanes, passion dims. Whether it’s pressure, boredom or any other anxiety, people can mentally and physically check out of work

This causes problems in any organization, but if a family member in a family office checks out, those problems can be acute

Wealth comes with challenges

Wealth can often lead to a sense of complacency, where motivation fades and engagement dwindles. With every want fulfilled, people can lose a sense of purpose or direction. They can lack drive, feel isolated, apathetic and detached

Checking out can be particularly prevalent for 2nd and 3rd gen family members. They may not be as driven as the original wealth creator. They may not see the consequences of stepping away

Furthermore, wealthy family members may also experience expectations and particular pressures from their family (often the wealth creator). The pressure to maintain or expand wealth can be overwhelming. Finding genuine motivation and engagement in activities or goals that offer true fulfillment can become a significant challenge for those who seemingly have everything

In family offices, business and personal lines can blur and if a family member checks out, this can create ripples that disrupt both financial stability and familial harmony

What is checking out?

"Checking out" isn't about taking a well-deserved break; it's when someone becomes unresponsive, disengages from work responsibilities, or stops participating in family and office decisions, without clear reasoning or communication

For the family office, this requires a delicate balance of personal empathy and professional pragmatism

While everyone should take personal responsibility for their own actions, the family office has a role in recognizing the signs and helping to keep family members fully engaged. It’s a delicate tightrope for family offices but it is an issue that many will face

The consequences of checking out

When family members in a family office start "checking out" of their roles, the financial fallout can be both immediate and profound, especially depending on their position within the organization. For instance, if a key decision-maker begins to disengage, it can lead to paralysis. This can delay critical investments or result in the mismanagement of assets, potentially costing the family millions in lost opportunities or diminished returns

Similarly, if a family member responsible for overseeing philanthropic activities or managing relationships with external partners checks out, it can tarnish the family's reputation and jeopardize long-term partnerships

This can result in a significant reduction in the family's social capital and influence. The financial harm is not just in the tangible losses but also in the costs associated with rectifying the disengagement, such as hiring external consultants or reallocating responsibilities, which can disrupt operations and dilute the family's control over its assets. The stakes are high, and the financial implications of disengagement can be severe

Unless the issue is dealt with, it can ultimately threaten the existence of the family office

Recognizing the Signs

The first step in addressing the issue is recognizing the signs, which can be subtle. It might start with missed deadlines, an uptick in excuses for not attending meetings, or a noticeable disinterest in discussions about the family's financial health

Emails go unanswered, calls unreturned. This behavior can stem from a variety of reasons - burnout, personal issues, or a growing feeling of disenchantment with the family's goals and operations. Understanding these signals early on can prevent potential fallout, financially and relationally

Strategies for Re-engagement and Support

1. Open Communication Channels: Start with a non-confrontational approach. Arrange a private, informal meeting to express concern and listen. The goal is to open a dialogue that feels safe for the family member to share their feelings and challenges

2. Provide Support Resources: Depending on what you learn from your conversation, offering professional support, like counseling or a sabbatical, can be helpful. Sometimes, the issue is bigger than work, and personal well-being must take precedence

3. Re-evaluate Roles and Responsibilities: Sometimes, disengagement stems from the family member being in the wrong role. Family members can often be parachuted into roles that are not suitable for them. Discuss the possibility of shifting responsibilities or even career paths within the family office. A fresh challenge or a role more aligned with their skills and interests might reignite their passion

4. Set Clear, Compassionate Boundaries: It’s crucial to delineate the impact of their absence on the family and the business. Setting clear expectations for communication and involvement, with agreed-upon consequences for non-compliance, respects both the individual’s autonomy and the family's needs

This is often easier said than done. Family members will often be able to dictate terms and boundaries, so careful coordination with all family members is essential here

5. Encourage Participation in Decision-Making: Feeling disconnected from the decision-making process can lead to disengagement. Involve them in discussions and decisions where they have a genuine interest or stake, reinforcing their value to the family and the business

6. Facilitate Personal Development: Offer opportunities for personal and professional growth that align with their interests and the family office's needs

This can include leadership training, financial education, or even external experiences that broaden their perspective

This can feel like a fresh start for family members and can draw a line under the disengaged behavior

7. Plan for Contingencies: Sometimes, despite best efforts, a family member may choose to step away permanently. It’s essential to have a contingency plan that addresses the redistribution of responsibilities and the financial implications of their departure

8. Regular Check-ins: Implement regular, informal check-ins in order to build a culture of openness and support. This can help identify potential issues before they escalate

The Importance of Flexibility and Empathy

As is often the case with family offices, problems require tailored solutions

What works for one individual may not work for another. Flexibility, empathy, and a commitment to the well-being of both the family and the family office are paramount

It's about finding a balance that respects the individual's needs while ensuring the family's legacy and financial health are protected

____

Family members checking out can present unique challenges. It requires family offices to deal with highly personal as well as professional matters in tandem

By recognizing the signs early, employing a strategy that combines open communication, support, and flexibility, and preparing for all outcomes, a family office can try to avoid problems escalating

At the heart of every family office is the family itself

If a family member has lost their way, the family office needs to work closely with the family to find a solution that suits everyone

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𝕏 highlights

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