Experience is the Secret Sauce (April 18, 2017)

Experience is the Secret Sauce (April 18, 2017)

An often-quoted truism in the wealth planning world is ‘We spend a lot of time preparing our assets to be inherited but very little time preparing our heirs to receive them’. But just what does ‘preparing heirs’ mean? Is it going to wealth programs? Getting an MBA? Possibly, but I think there is a more important element – experiences and experiential learning. This begs another question; ‘How does experiential learning fit in with wealth planning and preparing heirs?’.

According to the Association for Experiential Learning experiential learning has the following components

Experiences are carefully chosen for their learning potential (i.e. whether they provide opportunities for learners to practice and deepen emergent skills, encounter novel and unpredictable situations that support new learning, or learn from natural consequences, mistakes, and successes).
Throughout the experiential learning process, the learner is actively engaged in posing questions, investigating, experimenting, being curious, solving problems, assuming responsibility, being creative, and constructing meaning, and is challenged to take initiative, make decisions and be accountable for results.
Reflection on learning during and after one’s experiences is an integral component of the learning process. This reflection leads to analysis, critical thinking, and synthesis (Schon, 1983; Boud, Cohen, & Walker, 1993).
Learners are engaged intellectually, emotionally, socially, and/or physically, which produces a perception that the learning task is authentic.
Relationships are developed and nurtured: learner to self, learner to others, and learner to the world at large.

Successful families practice experiential in a number of areas. A few include:

Learning how to hire and interact with advisors;
Practicing using financial assets to impact your community (philanthropy);
Having a participatory Family Investment Company; and
Establishing a Family Bank & Opportunity Fund.

I recently published a piece in The Family Business Legacy Handbook (2017) discussing some of these concepts in more detail. You can access it HERE.

This topic points to a bigger topic for families seeking multigenerational success – the concept of a Family Chief Learning Officer. I’ve been doing a lot of work on this concept (much of it experiential) and will be sharing ideas in future posts.