The Cost of Doing (Family) Business: Why Matriarchs Are More Willing to Leave Money on the Table

An excerpt from an interview with Anthony DiLeonardi, co-author of “The $14 Trillion Woman,” and Managing Partner of Third Quarter Advisers, LLC (www.3qadvisers.com and www.linkedin.com/pub/tony-dileonardi/44/195/a85 )

Chuck Meek:   Tony, what do you mean when you say that matriarchs are more willing to leave money on the table?  In what context?

Tony DiLeonardi:  I mean that men and women view money differently – its intrinsic value, its purpose, and what it can do (for better or worse).  The patriarch generally takes a narrower view of defining ‘success’; he measures it with tangible things or quantitative goals.  The matriarch takes a panoramic view: there are lots of contributing factors to ‘success’, and therefore more opportunities for trade-offs.

CM:     How might that affect the Family Owned Business?

TD:       She is probably very attuned to her counterbalancing role as matriarch of the Business Owning Family, and is sensitive to the impact that owning the business has on everyone in her stake holding family, not just those family members who work there every day.  The patriarch is more wired to pay attention to what’s going on in the company, and to the extent he pays attention to the Business/Family dynamic, it’s measured primarily in terms of business results.  She looks at it from both sides and is more likely to abandon one benefit for another she deems more valuable to the family – and she isn’t necessarily using money to measure value.  That’s why she may leave money on the table:  it’s important, but not necessarily most important.

CM:     The title of your book – “The $14 Trillion Woman” – gets its name from the amount of wealth now controlled by family matriarchs:  what to purchase, where to invest, etc.  It’s also clear that demographics will affect who controls wealth creation, not just wealth management after it’s been accumulated.  Why does that matter?

TD:       We read the headlines in the media about the increasing role of female executives in large publicly traded corporations.  That’s an effect of a broader trend in our society at large:  women have continued to close almost all of the gender gaps in education, the military, corporate leadership, management and other disciplines.  Privately owned business is no exception, it’s just less noticed.  Private middle market enterprise has always been the backbone of our economy.  Women’s roles have increased significantly in all aspects of Family Owned Businesses, but the way we view FOBs has not.   We run the risk of fundamentally misunderstanding the motivations and mindset of those who control a substantial portion of the global economy, and how it will be sustained across generations.

CM:     What prevents us from embracing the new realities of wealth creation and management?

TD:       Nothing but a refusal to acknowledge those realities and to learn new ways to develop and maintain relationships.  For example, when patriarchs were commonly the decision makers in both business (wealth creation) and investments (wealth management), it was equally common for advisors and professional service providers to gear the relationship primarily to him, and acknowledge the matriarch in a supporting role – at best.  Sounds ‘old school’ to us now, doesn’t it?  And it is.  But necessity is the mother of invention, and those advisors who are faced with this changing dynamic will either adapt or go extinct.  It’s no use arguing or resisting:  it’s just capitalism, and emotional intimacy, at work.

3191 views