Tools and Tactics to build Family Social Capital

We went from a broad overview of social capital to strategies for creating antifragile social capital. In this article, we will get more granular and look into specific activities, or in other words, tools and tactics for building social capital. As usual, we distinguish between internal social capital and external social capital. While some activities overlap, there are clear differences in what you can do to build internal vs external capital.

Overarching Themes

There are some overarching themes to building social capital, and it makes sense to repeat them before we continue. In general, nothing ever is created out of nothing. Thermodynamic principles apply to everything in life. To create social capital, you need to deploy resources. When we will look at the specific activities, you will see that they are essentially the key ingredients behind each activity. These are namely: time, energy and money.

You might think, hang on a minute, is it really just these three? Did you not talk about integrity and trust? And won’t attention also be needed? You are right, these are also ingredients for building social capital, and there are many more. However, these are second-order ingredients, which are all derived from the three core ones I mentioned. If we want to be very pedantic, we can also argue that money is a second-order ingredient. However, it is a main resource at our disposal and thus will remain a core one.

Unless you are prepared to put energy, time and money into building relationships and thus social capital, you better don’t start. There is a lot you can do without money. There is not so much without investing time and energy. I have seen people reduce building relationships down to time and money. Let’s look at an example: I can invite a person to dinner, which means I invest money and time in it. Yet, I can either be present in the moment and ask deep questions to build this relationship. Or I can be somewhere else with my thoughts and have a shallow exchange. The difference is how much energy I invest in the meeting.

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Tools to build Internal Social Capital:

What specific systems and exercises can you incorporate to strengthen family relationships? Some of these I already mentioned on the fly in the last two instalments about social capital. However, I want to leave you with an actionable list of activities and agreements. Remember that the key resources are time, energy and money. So anything you try to do to improve relationships starts with these three. However, time & money are the most important two.

Family meetings

Let’s start with a classic that is suggested by every good advisor. It is to have regular family meetings. This is where the family gathers to discuss important topics and to spend time together. The larger the family, the more important family days become. Also, the larger the financial wealth, the more important these are. There is no right and wrong way to do family meetings. Some like to gather and host a treasure hunt event. Some do a factory excursion. Others yet spent most of the time in a board room. This is dependent on your family and its wealth structure and culture. Some families take turns in planning the family day, so each year someone else has to plan it.

Unlock the family history

This is foundational work. The more each family member knows about the family history, the better the relationships. But to unlock it, it needs to be embedded in storytelling. You want the family history to be exciting, so it becomes memorable and it arouses emotions in everyone. And the most important part is that this is a living tale. It does not stop with the founding generation. It is built upon and expanded with every generation. In some instances, this will require professional help.

Planned family activities

Spending time together is key. The larger the family gets and the more dispersed around the world it gets, the more important planned activities become. Maybe, there is a family holiday home where everyone can meet regularly. Or there are some activities that most family members enjoy. Or there are activities no one has tried yet and they would be fun. These are simple things, like going on a hike together, going to the theatre, even playing paintball together. Hot tip: Challenge another business family to a football (soccer) game. You are not alone; other families will want to have shared experiences too. In our modern world, to supplement, online meetings are good activity to add. There is many board games you can play online, just a tip.

Mentoring and Reverse Mentoring

Interfamily mentoring is a huge opportunity that is not often embraced enough. Particularly, reverse mentoring, as many families tend to have traditional hierarchies. Yet, in an ever-faster evolving world, reverse mentoring is so important. And just like mentoring, it strengthens relationships. Often, we tend to look for mentors outside the family, and this has immense value. However, why find an outsider if you can get good mentoring from within the family? And it has a double result: people learn from each other and their bonds grow stronger. Now that I am in my mid-thirties, I often realise how there were people in my family who could have been mentors. Yet, it never crossed my mind to ask them. And nor did it cross their mind to offer it.

Family Fuck Up Nights

The concept of fuck up nights is well-known in the start-up world. Yet, there is ample opportunity in business families. Failures and mistakes are part of life, particularly in entrepreneurship and business. Imagine how powerful it is, if the grandfather sits down and shares his fuck up of the week. How much this empowers the rising generation. I feel there is huge potential in regular family gatherings where everyone shares a fuck up. Then people can coach each other and support each other on dealing with the failure and to learn from it.

Shadow Boards

A concept that is not only huge for building intellectual capital, but also great for fostering better relationships. Imagine you have a shareholder council or family council, and there is a rising gen shadow council. They get the same issues to work on as the actual council. And they then get to discuss and present their solutions to the council at regular meetings. Or they get to sit in on important meetings to listen. Again there is time spent with each other.

Family Learning Days

Regular learning days: strengthen inter-familial bonds through education. Book regular workshops with experts on certain topics. Send family members together to courses. Pick a topic of the month to study and compare notes. There is so much you can do. Remember how you formed great relationships with your school friends or university mates. The long hours of preparing for exams? Why not try to apply the same to family members? Solving problems together brings us closer. And not every problem we solve as a family needs to be a business problem.

Giving back as a family

Giving back is powerful. Giving back together even more so. Now, there is no best practice here. Some families meet regularly to discuss what their philanthropic trust supports. Other families meet together to serve soup at a local homeless shelter. It is more about the exercise than anything else. We get a dopamine hit when we help someone and it makes us feel good. If we do this together with family members, we create pleasant, lasting memories as a group. This will knit the family together.

Emotional Agreements

This topic is an article of its own. What do I mean by emotional agreements? Under this umbrella, I have collected things like: How do we want to have conflict? What are our boundaries? How do we show respect to one another? etc. Many of these points are put into family constitutions or value statements, which is a great start. These have to be agreements, however, where everyone is involved in creating them. Alone, that exercise creates cohesion. Agreements that are dictated by one or a few family members to the rest hold little value. They become rules that are there to be broken.

Tools to Build External Social Capital

Similar to the above, there are some activities that a family can carry out in order to build external social capital. We shall again go through a list of actionable activities and structures that you can immediately implement. The list will mostly feature active tools and less passive tools. Engaging with media I have purposefully not included, as this is a double-edged sword and in my opinion a side activity to the ones I mention.

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What goes around comes around

This is more of a general mindset. What we do will come back like a boomerang to us. This is both bad and good. And if you look at it from a familial context, sometimes the deeds you do now, come back to the next generation after you are gone. These can be good and bad. The bad will come back to bite you. We live in an increasingly transactional world. Valuables have become negotiable, good deeds have a price tag to them and people ask what is in it for them? Counterintuitively, the families that help, support and give without asking for anything in return are the ones that profit long-term. They build goodwill. So keep this in mind. Philanthropy falls into this. If done right it builds external social capital together with internal.

Scholarships

Start scholarships with whatever means you can spare. Knowledge is power and it feels great to empower people. This can look as simple as buying school books for families with low means. All the way to paying for university or boarding schools for hard-working young people. Every person whom you support on their educational path, will remember you for their whole life. Some of them might even become key employees or business partners for you. If they have a great idea and look for an investor, they will come to you first.

Co-ops with Universities

A great activity to build social capital is to cooperate with universities. There is all sorts of things you can do. Fund studies and whole departments. Also, you can offer to be a case study for research or teaching. Offer to speak at university classes and share your knowledge. Some families even sponsor whole university campuses. Just as with philanthropy, cooperating with universities comes in all forms and sizes.

Prizes

In whatever area is dear to you, establish a prize with a competition. The jury can be a mixture of experts and family members. Supporting scientific fields, entrepreneurial endeavours or social missions through issuing a prize is rewarding. Not only for your soul, but also for your social capital. The media will write about our prize and who won it. This creates positive press around your family name or business. Again, this raises your reputation.

Art in Residency Programs

Art in Residency has been a go-to strategy for millennia. Wealthy families have always supported artists and thinkers. Let’s be honest, unless you can sell yourself well, art and thinking are not careers through which to easily make a living. Yet these are crucial for cultural evolution. Offering lodging to artists and poets has been a great way to support their endeavours. Often several at the same time, creating a hot spot for cultural thought. Many of the world’s greatest art pieces have been created in such settings.

Organise your own events

You won’t find attending events on this list, because I find that attending events is more of a passive exercise. It all depends on the quality of events you are invited to. What is much more effective is if you create your own events. Here you can curate the attendees to maximum effect. You cannot only invite people to strengthen existing relationships, you can also foster cross relationships in your network. This strengthens the relationships of your relationships with each other. Also, you can ask people you trust and cherish to bring someone. Often, that will create an amazing atmosphere. Although there are great conferences and events organised by professional outfits, the best events I have visited were organised by families.

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Industry Boards and Pro Bono Positions

You can have family members take up industry board positions and pro bono positions. These increase the visibility of your family, and you can actively help shape things. These positions are no joke, so make sure that the member who takes them up is prepared for it. Actively engaging with your community is always a plus point. These things are

Co-Investment funds

If you are very good at investing in specific verticals, a great way to build social capital is to create a co-investment fund. This can allow the community to work with you. Or other families to invest alongside you, guided by your expertise. These funds come in all shapes and sizes. Some only open a co-investment fund for other families, or only for employees. Some families do these as they have an investment team that is not used to its full potential, and this way they can cover some costs, while still making the same investments. However, the real strength in this is the social capital that it creates.

Final Words

I hope that this short and sweet overview of Tools and Tactics will help you in your endeavour to strengthen your family. History has shown that families who can introduce these thrive together for longer. And most of them are pretty simple in reality, yet not many use them. Anyone can start this journey today. I wish you all the best and a lot of fun in building your family’s social capital!