The Kennedy family is an Irish-American family that has an important influence on American politics. Among the many political families in the United States, it is one of the most notable four families (the Adams family, the Roosevelt family, the Kennedy family and the Bush family). In 2014, the American “Forbes” magazine selected the family with assets of more than $1 billion in the United States, and the Kennedy family was among them.
The Kennedy family attaches great importance to the inheritance of wealth, which has been passed down to five generations. In addition to the family business, Kennedy also has his own family office (hereinafter referred to as “family office”), which manages family wealth, coordinates family affairs, etc., and has set up more than a dozen family trusts.
It also has two family foundations, one of which is the John F. Kennedy Library Foundation (one of Pei’s famous works in the 1970 s). It was designed and built in 1964 to commemorate the late US President John F. Kennedy and to commemorate President Kennedy’s contribution to the peace of the United States and the world. Another fund for charitable donations for neuroscience and mental health.
So, how did the Kennedy family, which has been passed down to this day, achieve the resonance of family governance and home-run investment?
As a century-old family, the secret of the Kennedy family’s ability to pass on for five generations and still have great influence is that since the old Kennedy, the Kennedy family has established its own family mission, vision and values. For Kennedy Sr., mission, vision and values formed the cornerstone of the family’s heritage, not wealth.
For this reason, Kennedy Sr. has long planned a blueprint for the wealth and inheritance of the family. The family should not only be “rich”, but also “expensive”. That is, if the family wants to achieve sustainable development, it must not only achieve the sustainability of wealth, but also achieve the sustainability of social contribution and social influence, that is, in the way of charity, the family wealth will be returned to the society and promote social progress.
**From the perspective of mission, vision and values, the Kennedy family has followed the value driven investment (value-driven investment)/value driven (value-driven) principles and has laid out the following three main aspects over the past century: * *
**First, in business investments, the Kennedy family established a series of family trusts after realizing their wealth and diversified all their wealth. In addition to the most important real estate investments, the Kennedy family also invested in energy and health care. * *
Among them, the investment in the field of medical and health care is related to the mental illness of many family members.
Investment in energy, on the other hand, has to do with the Kennedy family’s social vision. In the 1970 s and 1980 s, there was an energy crisis in the United States. The Kennedy family saw many underclass struggling to survive because of energy shortages. As a result, it created a non-profit energy company to address some of the underclass’s energy needs, such as winter heating.
In addition, the investment projects that the Kennedy family office participates in need to follow the family’s bottom line principle, that is, not to invest in projects with moral hazard, because this will have a bad impact on the whole family.
Moreover, the Kennedy family is not only pursuing return on investment, but also looking for and investing in some projects from the perspective of solving social problems. For example, the Kennedy family stopped investing in fossil fuels more than a decade ago.
In terms of specific investment ratios, the Kennedy family would hire a professional external asset management firm. The broad asset classes, whether bonds, hedge funds or other areas, are determined by the family’s need for wealth and asset investments at a certain stage. In addition, it has some consideration in the allocation of all long-and short-term investments.
* The Kennedy family tree *
**Second, in public affairs, the most important performance of the Kennedy family is to participate in some political activities and charitable activities. * *
In particular, in terms of social influence, the Kennedy family has two types of foundations, one is non-endowment funds, such as the John F. Kennedy Library Foundation. It is a non-profit organization that provides social and financial resources to the John F. Kennedy Presidential Library and Museum.
The Kennedy Library Foundation is not a grant foundation and, in addition to assisting the Library in planning and developing its long-term strategic goals and objectives, it provides the Library with financial and creative resources to enrich its numerous educational programs, expand its research and archival capacity, and strengthen its museums and exhibits.
The other is the endowment foundation, which mainly donates to medical schools in the United States, such as laboratories focusing on mental diseases and brain-related diseases, for example, the neuroscience laboratory of Harvard Medical School.
**Third, in terms of family activities, in order to maintain the unity of the entire family, the Kennedy family not only has family precepts, but also has many large and small family activities in daily life. * *
For example, one of the family chiefs once asked minor family members to go home as much as possible every day, and to discuss some views and opinions on the social affairs that occurred on that day at the daily family meeting.
For another example, for any member of the family to start a business, the Kennedy family office in principle does not give financial support, in order to maintain the harmony of the entire family. If a family member wants the support of a family member, it needs the support of other family directors. The Kennedy family now has multiple family branches, each with more than a dozen family members, so the difficulty can be imagined.
01 Mission, vision, and values of the Kennedy Family
In addition, the Kennedy family will also be reading habits throughout the family. In the family education, the Kennedy family members love reading.
**They will use any gap time to read. For example, in the bed, garden balcony, short-distance travel on the plane, can be seen everywhere all kinds of books. **There are two reasons why family members love reading (non-skilled books), on the one hand, for the acquisition of knowledge, and on the other hand, for continuous thinking about the family’s mission, vision and values.
**In addition, after each disaster, family members become more closely related. **This approach, which is good at transforming disasters and negative energy into the great power of the family, is worth learning from other families.
**Observed from past experience that the domestic family office has the following characteristics: * *
**First, many families have not made earlier plans for second-generation education and careers. * * Especially in communication, there will be some “faults” between the first and second generations of the family.
This kind of “fault” shows that the wealth creators of the family generation just hope that the second generation can continue to increase the family’s wealth, or just hope that they can live their own lives.
In fact, the two generations may have more discussion on the value level. For example, what exactly is our wealth for? What role do we want to play in our community, country, society, and even the world?
**Second, the development history of domestic family-run and family-run businesses is relatively short, and the focus of family members is still at the stage of” money makes money “, but there may be more exploration of the relationship between the personal values of family members and family-run businesses or family-run platforms. * *
For example, create figurative opportunity points in the family business, or in related businesses at the edge of the family business, to involve family members. This allows family members to gain first-hand front-line business experience.
**Wealth and business itself is a cornerstone,** to give a simple example, it is difficult for any family to keep family wealth growing at a rate of 10% per year for 100 years. What really affects the inheritance and future development of the whole family is whether a family has its own mission, vision and values, and then realizes such a vision in the enterprise or family office.
“In the current economic situation, it is suitable for families to think: in addition to wealth, what plans should be made for future generations in terms of family inheritance.” Under the guidance of reform and opening up, many generations of entrepreneurs have completed their initial wealth accumulation after achieving rapid and outstanding business success.
**** This may be a good time for these entrepreneurs to stop, determine and calibrate the family’s mission vision and values, and then proceed to the corresponding asset allocation and family activity planning. Of course, the two are not necessarily linear, but will dynamically complement each other to develop and change.
So what should the domestic family do if they want to be a century-old family like Kennedy?
**First of all, before answering this question, a family needs to be clear about the role of wealth and what role it hopes that generations of the family will play in society in the future. * *
**Second, establish a family charter. * *
It is suggested that the family can unite with external institutions, start from the top-level design, reorganize and construct the family’s planning in public affairs, family internal activities and family external business, and establish consensus within the family and among different members in a more comprehensive, sustainable and easy-to-pass way.
This is worth trying at present in China, especially in Jiangsu, Zhejiang, Guangdong, Fujian and other places where the traditional big family system is implemented and expects to continue or awaken the vitality of the family for a long time.
02 From the Kennedy family, talk about the current state of domestic affairs
**Furthermore, attention to public affairs should be strengthened. * *
At present, China’s home office pays more attention to business (investment) and lacks attention to public affairs. In foreign countries, with the exception of the Kennedy family, many foreign families focus on the combination of business investment and public affairs.
For example, in terms of participation in public affairs, Western families participate in the public affairs of many regional and national governments, while Chinese families can also participate in public affairs more practically through charitable donations, artistic and cultural activities, or influence investments. Go and actively participate in things in the direction of common prosperity.
Finally, when establishing a family sense of mission and values, every family member cannot be forced to have this awareness. Instead, they should be given more options to observe how other families do it.
In the reference case, the Faber family, Faber-Castell of the old German pencil manufacturers, can be used for reference by the domestic family.
Since Kaspar Faber produced the world’s first pencil in his small workshop, the family has been passed down for 9 generations and has a history of about 260 years. The family business has also developed from a small workshop into a large multinational enterprise.
When studying the case of this family, the first question is, how did the family flourish through time and cycle?
**If a family wants to achieve this goal, it should create some” figurative “opportunities. The so-called “figurative”, that is, what is the strategy of the enterprise. * *
* * It should not fall on simple PPT, but on actual products and services. A family should explore its family value in the process of building products and services. **And as the value continues to be polished and improved, it can further help the family value increase.
Another very representative home office case is the Vulcan Capital, the home office of Microsoft co-founder Paul Allen (Paul Allen), which has assets of about $36 billion. In 2020, Paul Allen Family Office announced the spin-off of its investment business and the creation of a new company, Cercano Management, open to ultra-high net worth individuals and their families around the world, offering investment advisory services with a minimum threshold of $0.1 billion for clients to open an account.
**In the American family office, it has very clear goals and long-term vision. **More than a decade ago, it set up its second headquarters in Asia and was one of the first offices to set up headquarters in Asia. This is based on Paul Allen’s deep thinking about “where is the future”-the answer is in Asia.
In addition to the United States, he also saw that many family offices in Hong Kong and Taiwan also have their own clear plans in terms of mission and values.
This is manifested, for example, in asset allocation, in addition to maintaining the basic market stability, they will allocate to some extremely fine vertical areas. For example, they will make it clear that they will only invest in neurological and high-risk projects in the medical field, such as the development of drugs to treat Alzheimer’s disease.
**In general, families that have not established values tend to be standardized in terms of wealth inheritance, wealth management and asset allocation. * *
In addition to strategy and asset allocation, domestic families can more completely plan the family members suitable for home-run/family business roles, such as operating posts or board member-type positions in the enterprise. Once the role is clear, look at whether it is an active board member or just a financial shareholder role.
In addition, the first goal of family inheritance should not be “asset income” as the goal, but should be “inheritance” as the goal. Because the return on assets is one of the results of inheritance. * *
Therefore, when looking for professional managers, families should look for professional managers who meet this goal. The professional manager may not necessarily be an Ivy League graduate or a person who is very good at investing, but a manager who fits the family’s aura or culture.
In order to better enable professional managers to work for the family, **whether it is a generation of wealth creators or home-run CEOs, it is necessary to create some low-cost, low-energy moments and opportunities to create opportunities for professional managers to experience and run in with second-generation successors. Only in this way can we increase mutual trust, work together, and create long-term value in line with the family’s vision. * *
In short, the first generation of founders established the commercial miracle of China’s private enterprises. They are both the chief product officer and the chief marketing brand officer.
However, as this generation of founders gradually enter the retirement age in the next ten years, China is also about to usher in a new round of organizational vacuum and challenge period brought about by the inheritance of large-scale family businesses. How to enable the two generations to form a common value consensus and confidence, and how to convey this consensus and confidence to the organization, will directly affect the success of the handover.
This is also a key issue that our families and family businesses can learn and discuss from overseas Centennial Home Office.
(Source: Home Office New Intelligence Point)
