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You know your business needs to change, but you’re caught in the emotional and relational dynamics that are holding you back. Welcome to Noble Metal, the podcast that helps you forge a new kind of leadership. Host Phillip Weiss, a seasoned executive coach and organizational consultant, reveals how to become a more resilient, deliberate, and less-anxious leader.
Through powerful insights based on Bowen Theory and systems thinking, you’ll learn to navigate complex workplace relationships, manage challenging strategic issues, and lead your team to sustainable change. Get the clarity and tools you need to forge a new path for your business.
Ep21
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Pritzker Trust Shock
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[00:00:00]
Phillip Weiss: In 1961, a man named A.N. Pritzker of Illinois Chicago fame sat down and wrote the rules for how his family's fortune would pass to his grandkids. He had earned the right to write those rules along with his sons he had built one of the greatest American business empires almost from nothing: a single Chicago hotel that [00:01:00] became Hyatt and then an industrial holding company that became Marmon eventually stakes in TransUnion and Royal Caribbean.
By any legal financial or governance measure, the Pritzkers had done everything right, trusts structure succession built from the start all of that have been laid out very well. Forty years later, one of those grandchildren opened her trust documents and didn't like what she found. Her name was Liesel Pritzker, nineteen years old, a freshman at Columbia
And what she found was that her shares including her stake in Hyatt had been quietly moved out of her trust and into a family foundation then sold back into the family holding company at a fraction of what they were worth. And her father had signed off on it, and so had trustees who were her relatives.
On paper though everything was in order. So she [00:02:00] did something nobody in that family had done before. She sued her own father even and eleven older cousins, six billion dollars in claims. What happened next wasn't really a legal story although that's where it played out, was in the courts. This is a family story that the law in a sense you could say was sort of hosting.
Within a few years, a fortune that had taken three generations and a century to build was carved into eleven separate pieces. The paperwork remember recall had been very sound the entire time. A.N. Pritzker's trust documents did exactly what he'd written them to do. What broke here wasn't the structure but it was everything the structure was quietly sitting on top of.
That's this Family Enterprise series in one story not a cautionary tale about greed or [00:03:00] bad lawyers or a difficult relative I honestly don't think that any of those explanations actually hold up to what happened. This is a story about a family that had every external safeguard money could buy , and no safeguard at all for the thing running underneath of them, and that is exactly where we are starting here today.
The Blind Spot
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Phillip Weiss: If you are part of a family enterprise running one advising one married into one waiting maybe to inherit a piece of one. You already know where the attention goes It goes to governance documents, buy sell agreements Wealth transfer structures Succession plans with the right people's name in the right boxes. All of this is necessary and i-it's all very appropriate to focus on. But here's the blind spot.
Most family enterprises treat the emotional [00:04:00] life of the family, the actual relationship dynamics, they treat that as a separate issue. Some people consider it softer, optional, somebody else's department if it's anybody's department really at all. The business side gets consultants, attorneys wealth advisors, governance experts .The family side too often gets more or less hoped for assumed It's assumed really we're close and we will figure it out We've always kind of figured it out And most of the time That's fine until it's tested And this is exactly what makes it a blind spot.
You cannot see it until you're actually in it. The research on this is not subtle, honestly. The plain truth is, is that the majority of family businesses don't make it intact into the third generation. [00:05:00] And when people study why, the answers are almost never about the balance sheet. They're relational answers.
Sibling rivalry, founders who can't let go, unspoken rules about who's allowed to disagree with whom, you name it. Those underlying family dynamics. Part of why this blind spot is so durable really is that it doesn't announce itself. Nobody sits down and decides on purpose to ignore the family dynamics underneath the business It's more that the legal and financial work really have clear, obvious deliverables. A signed document, a distinct structure, a completed transaction.
But the relational work doesn't. And this, this is true in, in organizations, family or n-no, no family. All the financial legal aspects get tons of [00:06:00] attention, but the underlying human dynamic is so often ignored and missed So the urgent work gets done, and this important work of family dynamics gets basically deferred, and everybody tells themself the deferred part is fine because it usually is until that exact moment it matters most, which tends to be the moment with the least room for error, honestly.
A death, a sale, a generational handoff.
One Emotional System
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Phillip Weiss: So here's the premise for this... really this whole little series that we're gonna be doing. The legal, financial, and governance side of a family enterprise and the emotional side of that same family are not two issues. It's one system running out of one set of dynamics.
The same one that shows up at your holiday dinner table shows up in your board wa-room probably, but wearing nicer [00:07:00] clothes maybe. Everything we build in this series comes back to this one concept, and this is where Bowen family systems theory earns its place in the business conversation and is a very powerful asset to it.
And so if you're new to the theory, here's the piece that matters i-in a sense most for us today. Murray Bowen's foundational claim was that a family doesn't function as a collection of separate individuals making independent choices.
As I like to say sometimes, it's not just a bunch of r- We're not just a bunch of random automatons running around doing our thown- own thing. But in fact, if the family functions as a single emotional unit, that's very foundational to Bowen Theory. One system. And when a business gets built on top of that family, you don't end up with two systems side by side, the family and the business.
You get one emotional system that now has two [00:08:00] arenas that it's playing itself out in, and that, uh, I believe that is huge and powerful insight.
Anxiety Moves Around
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Phillip Weiss: Bowen noticed something in his early clinical work that I think about when I look at family enterprises He observed that a family's dysfunction doesn't sit still in any one person. It typically moves. It moves around the system, the family. First it looks like the problem is maybe located in one individual that may be the difficult person, the entitled one, the one who can't get it together. Then it might look like the problem is between that person and one other family mem-- you know, member. Then it's the whole family all at once.
The location keeps shifting. That anxiety moves around but what doesn't shift is that it's the system's anxiety finding kind of wherever it can land or looking in a sense for fertile ground you might say. Think about though what that means for the family [00:09:00] businesses you, you might know. Again, that problem sibling who never quite gets taken seriously in the business or the son-in-law who's tolerated but never fully trusted with real authority.
From the outside and often from the inside these get explained as fixed facts so to speak about a person's character But Bowen would ask a different question: What is this family system doing right now that needs somewhere to land, and why is it landing there specifically? I believe that this reframe changes everything about how you handle conflict in a family enterprise.
You stop asking, "What's wrong with him?", for example, and start asking, "What's the system doing?" And even more importantly, "What's my part in all of this?
Triangles at Work
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Phillip Weiss: How am I helping to sustain these dynamics?" There's a second [00:10:00] Bowen concept to highlight here I think it shows up constantly in family enterprises specifically, and that's the idea of triangles. A very powerful and helpful Bowen concept. Two people in a relationship under enough anxiety will almost always pull in a third.
Not necessarily to solve the tension between them, although that might be kind of the surface, you know, ruse, but to spread it out, to spread that anxiety out so that it's more bearable. That two-person system o-- just typically cannot handle too much of the anxiousness, and so one or both will reach out to a third and basically kinda disseminate that anxiousness out into a broader, into the broader system.
In a family business, the third point of that triangle is often a person who didn't even ask for the job. Maybe that in-law nobody quite trusts with real authority, or that [00:11:00] loyal non-family executive, and I see that quite a lot, who gets u-- that non-family person who gets used to being that go-between whenever the founder and their appear-- heir apparent can't say something maybe to each other directly.
None of those people caused the tension. They're just the nearest stable point for two anxious people to lean on. And it's human. This is, this is not bad. This is really normal. And that it bode-- it bodes the question and the challenge of how then do I navigate that? Whether we're talking family business or not, uh, we often talk about triangle leadership for ano-- We'll, we'll save that for another discussion So if you've ever felt like the, maybe the designated referee in your own family business or business or family, or watched someone else get stuck in that role, you're most likely watching triangle dynamics in action.
Differentiation Balance Sheet
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Phillip Weiss: So here's a question I don't [00:12:00] think most family enterprises ever put on the agenda: What does your differentiation balance sheet look like? Kind of a mouthful.
A differentiation balance sheet. Not your P&L, not your equity structure. I mean that thing underneath all of that
That is how much each person in your family business can actually think for themselves, hold a position, disagree out loud, and still stay connected to everyone else while doing it How strong is that? What score might you give the leaders in the family business regarding that? Because that differentiation number, whether anyone's tracking it or not, is quietly either funding or quietly draining every other number on that table.
[00:13:00] What am I saying here? What I'm saying is an ab-- the ability for individual members of the family and leaders in the family business to be what we like to sometimes call solid selves versus getting jerked around by all the reactive dynamics. That ability can either aid in strengthening the business or undo it altogether.
So what we're not talking about here, uh, is some sort of cowboy/cowgirl rugged individualism. Bowen had a lot to say on this. He noted that rugged individualism is often just an exaggerated pretend posture of a person struggling against that emotional fusion or togetherness. So think about that for a minute because it c-- it really, it cuts against how we usually picture the tough, independent-minded family patriarch or matriarch.
That loud, "I don't let emotion get into my decisions," that, that voice in the room. [00:14:00] Half the time, that kind of approach is not differentiation. That's, that's most likely somebody fighting not to get pulled under, which means they've already... They're already in the water I think real differentiation looks a little bit quieter maybe than that.
Maybe that's not the best word, but it's the word I'll use at the moment. It looks like somebody who can sit at a table with people whose approval they desperately want, hear something they disagree with and still say no without freaking out raising their voice, without walking out of the room slamming a door, without needing everybody else at the table to agree with them.
Back to the Pritzkers
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Phillip Weiss: Let's go back to the Pritzker family here for a second because this is really what that story is about underneath all the lawsuits and all the trust documents. eleven cousins, one family holding company, decades of decisions getting made inside what I might guess from the outside looking in function less like 11 independent adults weighing in and more like a [00:15:00] single kind of emotional mass moving together in some measure. Loyalty to the quote unquote "family way" wasn't just a value; it was the price of staying inside the circle. And when one person , a nineteen year old no less—the person with arguably the least institutional power in the entire family. When she actually made a differentiated move and actually said This isn't right ,and I'm gonna say so in public to all of you The whole system didn't know what to do with that .It didn't bend though ;it eventually broke into eleven pieces I wanna be careful not to make that sound heroic in a simple way because differentiation isn't about picking a fight or blowing things up to prove a point.
That's not necessarily the defined self. In a way, that's just rebellion, which is its own kind of fusion, really just running in reverse, by the way The [00:16:00] goal was never conflict. It was clarity. I don't believe that Liesel Pritzker set out to fracture a $15 billion fortune. She set out, I think, to say one true thing about what she saw happening to her own inheritance. She stood up for self. She, I would say, defined herself. The fracture was just what happened when a lower differentiated system met one person like her telling the truth Uh, here, here's a part I think that should make every family enterprise leader listen just maybe a, a little bit more and maybe get a little more uncomfortable.
Your org chart and your family tree are more often than anyone wants to admit the same chart. One and the same. The reporting lines on paper say one thing, but the emotional lines, who can challenge who, who gets deferred to no matter what, whose feelings set the temperature for the room, those are running underneath it the entire time whether you've mapped them [00:17:00] out or not.
And by the way, that can be mapped. You can have the best governance structure money can build. If the people sitting inside it can't tell you the truth without it costing them the relationship then I would suggest that the structure is decorative maybe
Dealership Family Case
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Phillip Weiss: So there's a string of auto dealerships, second generation successful business.
The younger of two brothers had taken over from their father not o-- not really out of ambition but because his older brother had walked away from the business years earlier and never looked back leaving the role to fall to whoever was left standing. So that older brother had built a life entirely outside of the company and to a high degree outside of the family, and for a long time that s-- that distance suited everybody just fine.
The brother running the business worked very closely with the company CFO, a non-family member but someone who was always there [00:18:00] and very well trusted by the family.
At one point, a coach came in to work with these two business leaders and at the same time that brother died unexpectedly of a cardiac event no warning, no illness that anybody had known about No prior illness history. In the space of a few weeks everything that had been comfortably settled came pretty much undone.
The estranged brother who hadn't set foot in the business or really the family for over a decade reinserted himself immediately with firm opinions about how things should now be run. And the deceased brothers daughter twenty six finishing an elite MBA program and largely unfamiliar with the day to day business was abruptly named as a co owner.
CFO who had never had to hold a family together before was the one steady presence really left. He was that stable force That less anxious [00:19:00] presence. He recognized quickly what the business was facing wasn't an operations problem it was a family system in shock
And he's the one who pushed for some real coaching with the three of them; the uncle, the niece and he himself rather than just letting basically unproductive quarterly meetings absorb all that ang- anxiety. It took the better part of a year ,and it wasn't always smooth but eventually that uncle and that niece built something genuinely new: A working relationship where disagreement didn't mean rupture.
This kind of differentiation, or I like to sometimes use the word emotional maturity this kind of relationship success was never going to show up in a governance document. It up in two people or maybe three under real pressure learning to stay connected and honest with each other at the [00:20:00] same time So when I say differentiation is the real balance sheet, I, I mean it very directly.
Every family enterprise is already carrying this number or a differentiation number, whether it's written down anywhere or not. The only choice you actually have is whether you find out what it is on your own terms in a more measured deliberate space over time and with some most likely hard work but doable. Or whether you find out the way the Pritzker did: in public maybe in court and all at once
Pressure Point Moments
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Phillip Weiss: Picture with me the two events that this series will keep coming back to. One, wealth transfer, and two, leadership handover, deciding who actually is gonna run things next, whether family or not Honestly, these are the two places family enterprises constantly trip up on. And as I'm thinking about it here, that it's not an accident why this is the [00:21:00] case. Both of these moments put money, mortality, and individual identity on the table all at the same time. Both moments ask people to say things out loud that families are usually very good at avoiding.
A less anxious presence in that family enterprise room doesn't necessarily mean that you're not nervous. What it might mean, though, is that you can stay yourself while everybody else's anxiety is climbing. You can say the honest, harder thing, such as, "I don't think you're ready to lead this yet," or maybe, "I think the plan we've had for 10 years needs to change."
You can say these hard things without needing necessarily the room to agree with you and without needing to soften the me-message into something that it's not
Personal Reflection Prompts
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Phillip Weiss: So I want to leave the framework aside for a minute and ask you something directly because that-- I think [00:22:00] that's really what this series is for in a sense. It's not necessarily for your family, it's not for your board, but it's for you If you're a part of a family enterprise, where do you personally go reactive when family and business overlap in some of these profound ways?
Not what does your sibling do, not what does your dad do or a cousin What's the moment where your own voice changes? Where you get quieter than you maybe mean to or louder maybe than you mean to? Both are reactive. And maybe here's the harder question. Is there a decision sitting in front of you right now that you're avoiding?
Not because you haven't thought it through, you probably pondered it a lot, but because saying it out loud clearly might read as being disloyal instead of maybe honest
if these are real for you, I, I encourage you to, you know, think about these this week. You don't have to [00:23:00] solve it. Just start by noticing it. Noticing is where differentiation actually, I think, starts. One more and then I'm gonna let you off the hook here. Think about the last time you found yourself in the middle of two other people's tension in your family or business Carrying a message that you, you didn't originate, s-smoothing something over you didn't cause.
That's a triangle, and you were the third point. Ask yourself honestly, did stepping in actually resolve anything, or did it just make the discomfort easier for everybody else to carry for a little bit longer?
Closing Takeaways
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Phillip Weiss: So as we come to a close, this is the first conversation in a series on family enterprise and we're going to keep coming back to two places specifically. Again that whole idea of wealth transfer and leadership handovers. Those are where the pressure so often [00:24:00] concentrates. And where the emotional system usually shows its hand pretty, pretty obviously.
For now, here's where we're gonna leave it. Your family enterprise already has a legal structure, a financial structure, and probably a governance structure as well. But what it may not have is an honest accounting of the relationship system that all three of these are sitting on top of. That is not a soft add-on.
That whole idea of you know, soft skills-- Of relationship dynamics being soft skills I think that is...I think that is wrong.It's hard. That's where the real work is . And it's, it's, and it's tough work because we do not like the discomfort that it so often comes with it. And so from where I sit, this is where the real work is, the part that decides whether everything else you've built actually holds.
None of this means ditching the [00:25:00] documents you've got obviously or treating your attorneys and wealth advisors as if they've missed something. They didn't. They're doing their jobs. The point of this series is what sits alongside of that job, not instead of it. The work of making sure the people inside the structure can actually tell each other the truth when they need to long before a courtroom or a nineteen-year-old with a six billion dollar complaint forces the question.
I'm Philip Weiss. This has been the first episode in our series on Family Enterprise. If you have found this valuable please pass it on and/or leave a comment. We'd love to hear from you. Thank you so much for listening today