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Family Wealth: — Keeping It in the Family — How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations, Revised and Expanded Edition by James E. Hughes Jr.

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Chapter 6. Two Important Practices

In my day-to-day work with families, two practices have emerged as especially helpful. Each practice deals with skills family members can learn that will improve their ability to manage the multiple relationships they share. I use both of these practices as fundamental building blocks in teaching families how to practice good family governance.

Hat Work

The first is founded on the work of Ernest Doud and Lee Hausner in their book Hats Off to You. In their book, Ernie and Lee recount the story of a father and son who are in business together. The father was the founder of the company, and the son worked there. The father's calling had been to found and own this very successful enterprise. The son, although he had a very high opinion of himself and his work for the company, didn't share his father's calling and was generally seen as incompetent by his coworkers. One day, an opportunity arose in the company's senior ranks, and the son assumed that he would be promoted to this position. His father invited him home for lunch, and the son assumed the purpose of the lunch was to announce and celebrate his promotion. The son arrived and found his father at poolside. On the luncheon table were two hats. On one was written "Boss" and on the other "Dad." His father welcomed him, asked him to sit down, and put on the hat labeled "Boss." The father then said, "Son, you are fired." The father immediately took off the first hat and put on the one labeled "Dad." ...

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