Flourishing Tree Moments of Inspiration, Issue One

Is seven days long? Not really — just seven turns of sunrise and sunset.

Is seven days short? Seven days is not short at all — long enough to read many wonderful books, meet many interesting people, and give rise to many new ideas. Seven days is enough to turn us into a better version of ourselves.

Every seven days, the partners of Flourishing Tree meet by appointment to share the gains and growth of this stretch of time — refining data into information, organizing information into knowledge, distilling knowledge into wisdom, and inspiring one another. It is each individual’s wisdom, and it is the wisdom of the Flourishing Tree team, and it may yet become the wisdom of Flourishing Tree’s clients.

September 23, 2021, was our first “Flourishing Tree Moment of Inspiration” — one gathering for each appointment, one appointment for each gathering. A cup of tea, a seat; four people in three places, on this bright and sunny afternoon, chatting freely “in the air.”

Cognition and Growth

Joyce:

When I sat down to gather up the gains of these past seven days, what leapt into my mind was the self-change and growth of these past two years — the shift from an “employee mindset” to the “role of an entrepreneur” to “creating a beautiful work.” Yes, hearing the phrase “create a beautiful work” was the origin of my change; learning to think about everything with “first principles” and to act with “deliberate practice” was the methodology of my change; and continually raising my cognitive ability was both the result and the driving force.

Coming back to the family-office business: if our goal is to create a beautiful work, then we will pay closer attention to what our clients truly need, to what our own core competitiveness is, to how we can create long-term value, and so on. That is, returning to the path of doing the right things, rather than merely doing things right.

Andy:

An eggshell broken from the outside is pressure; broken from the inside, it is growth — and it means the birth of a new life. The process of growth Joyce shared is also a process of continual self-breakthrough.

Richard:

The idea of creating a beautiful work is especially fine. On one hand, it widens the dimension of time: when your goal is to create a beautiful work, you treat it with a more long-term patience and vision. On the other hand, creating a beautiful work requires you to keep polishing your core competitiveness with a spotlight’s concentration, letting us think clearly about what the work is that we truly love.

Tool People

Andy:

Speaking of a beautiful work, I think of its opposite — it cannot be mechanical, rigid, or task-driven; that is, one cannot become a “tool person.” This was also my biggest impression and gain from today’s business trip to Ningbo. In our industry, the great majority of teams merely hand the client a product to sell or a solution — something stiff, utilitarian, and discontinuous. Only when you can truly take the client’s needs and interests, even the client’s feelings, as your point of entry, provide a customized plan, and keep following up and optimizing it, are you creating a beautiful work. Of course, this is very hard to do, and it demands the ability to resist the temptation of short-term gain (quick money). But precisely because it is hard, persisting in it is what can build our team’s core competitiveness and moat.

Carolyn:

Here we must draw a distinction: a person must not become a “tool person,” but in method one must skillfully use all kinds of tools. For instance, using first principles to think about the essence of a family problem; using the second curve to analyze how to achieve intergenerational succession; using fractal innovation to consider the second generation’s succession; using the MECE principle to analyze suppliers and assets, and so on. Last year, when we helped some clients screen for a trust-structure provider or a dark-horse fund that suited them, we used the MECE principle to simplify the complex and make the plan more complete, winning the clients’ high recognition. Only when methodology and tools have a theoretical foundation and a structural system can they possibly keep evolving and upgrading. And this is also the basis that supports the shift from “tool person” to “beautiful work.”

The MECE principle (Mutually Exclusive, Collectively Exhaustive) means: mutually independent, completely exhaustive.

First, mutually independent: this means the classification is done on the same criterion or the same dimension, with clear distinctions and no overlap.

Second, completely exhaustive: this means there is no omission in the division; the parts of the horizontal structure completely exhaust the concept of the level above.

The essence of the MECE principle is to simplify thinking and reduce complexity. After dividing by the MECE principle, muddled views become clear.

Richard:

Later on we will also sort out and interpret these tools and methodologies — this too is a process of evolution for ourselves.

“Speaking Human”

Richard:

Talking about tools and methods reminds me of one thing: however good a tool or method is, it must be communicated and conveyed in the most fitting way to be effective. Our clients often tell us that many institutions have no problem at all with expertise, but in the course of communication the client simply cannot understand a thing, and in the end the cooperation just fizzles out.

I think being unable to explain professional knowledge clearly stems, first, from a lack of “user awareness” — not thinking from the standpoint of the person listening to you about what they want to hear, what they can understand, and what use it is to them.

Second, from not having truly understood it oneself. The Nobel laureate Richard Feynman had a very famous “Feynman technique,” which can be summed up in one sentence: to explain a thing clearly in your own words, in the simplest language, so that even a layperson can understand it. On the surface it seems we are using plain, simple language to transmit complex, profound knowledge to others, but the one who truly benefits is ourselves.

Let me give an example. Explaining clearly to a first-time family client the role and meaning of a family succession architecture and a family charter is no easy thing, so I usually use two metaphors to let the client quickly understand and accept them.

A family succession architecture divides into two aspects, “matters” and “people.” On the side of “matters,” we are, in effect, building a great vessel for an ocean voyage.

A small wooden boat can only paddle across a calm lake; it cannot withstand the wind and waves of the sea. If a family wishes to pass on through the generations, it must cross an ocean of raging wind and towering waves, and the first step is to build a great vessel that can resist risk.

The protective tools in our family charter — trusts, insurance, and the like — are the sturdy hull of this vessel, letting it resist all kinds of known and unknown risks. Planning the family wealth so that it grows and endures is the vessel’s power system. Certain prohibitive clauses for family members prevent the vessel from being damaged from within. Encouraging and rewarding clauses for family members let the whole crew of this vessel be harmonious and loving, striving and progressing, happy and content. The vision, mission, and values in the charter are the vessel’s rudder, deciding where it will sail.

On the side of “people,” I use the “flying-geese effect” of wild geese as a metaphor.

A flock of geese flying in a “V” formation can fly 70% farther than a goose of the same energy flying alone.

Here there are three roles. The first is the lead goose, bearing the greatest resistance as it flies forward and leading the direction — this is the head of our family. The second is the family’s backbone, the geese in the front flanks, assisting the lead goose and guarding the formation. The third is the older and younger geese, protected and following along as the formation strives forward.

A good formation needs three spirits:

The first is the spirit of dedication: without the lead goose’s responsibility and leadership, without the dedication and giving of the flanking guard geese, the whole flock could not fly smoothly onward;

The second is the spirit of loving-kindness: if the geese were not of one goal, united and loving, some would leave the flock. Of course, a good formation forms a powerful centripetal force, so that even if a goose occasionally strays, it immediately feels the difficulty and slowness of flying alone and at once returns to the formation;

The third is the spirit of growth: when the lead goose and the flanking guard geese grow tired, other geese are needed to take their turn. That is, the goose being protected at this moment must grow quickly, because the next moment it may be needed to take its turn and bear the responsibility. Only thus can the whole formation go long and go far.

So, to sum up, the purpose of establishing a family charter is: on the hardware side — that is, the architectural level — to build a great vessel able to pass through the ocean of years and carry succession across the generations; and on the software side — that is, the level of people — to form a formation-spirit of harmony and rectitude, of dedication and unity.

Explaining it this way should make it easier for a client to understand and accept.

Andy:

The purpose of communication is to be understood and received, and doing it this way is a fine method. It seems we can slowly compile a Flourishing Tree “storybook.”

(Everyone laughed happily.)

The “Not-To-Do” List

Andy:

These past few years we have accumulated much experience and provided clients with many solutions and their implementation. This process makes me feel more and more that as the boundary of what we can do grows larger, we must, on the contrary, be clearer about where the boundary of our circle of competence lies: what we ourselves are good at, and what requires drawing on others’ abilities and cooperating with them. Family service is like building with Lego bricks; a single team can only provide a few of the bricks. To complete a beautiful work, one needs a good ecosystem of cooperation.

Richard:

A team needs a “not-to-do” list. The things listed on it are the business content and scope the team should not take on. Sometimes, being clear about what not to do is in fact more important — it lets the team focus its energy more, makes its goals clearer, and makes its value clearer.

Carolyn:

What should our team’s not-to-do list be? Perhaps we should discuss it in depth next time.

The team fell into deep thought. The first “Flourishing Tree Moment of Inspiration” had reached its closing time, but the brainstorming this exchange brought still went on, about to spark new flames…