Aspire | Action | Acquire
Aspire | Action | Acquire

Creating Family Value

At the time of writing, the Walmart family is America’s wealthiest. In his autobiography, the late patriarch, Sam Walton, stressed the importance of “old bedrock values” being “hard work, honesty, neighbourliness, and thrift.”[1] He also stated that his book was written for his grandchildren and great grandchildren, whom he would haunt if they sell of their stock in the family firm to live high.[2]

In a series of published essays profiling family dynasties, republished under the title Family Dynasties: fortunes and misfortunes of the world’s great family businesses, the social historian David Landes identified a sense of continuing identify as being critical to the survival of intergenerational family wealth[3]. Similarly, a study by Ernst Young’s Global Business Center of Excellence[4] asserted the importance of a core set of family values and meeting up.

The concept of values is raised in John D Gates’ book on the du Pont family and a comparison between the Rothchilds and another German banking family, the Bleichroders. Drawing on a separate collection of essays by David Landes, Gates writes “the Bleichroders had changed their mind about who they were, or at least who they wanted to be, and had lost their way” by the third generation. By contrast, The Rothschilds “had a sense of family and dynastic distinction that allowed them to preserve an identity.”[5]

The importance of “core values” and “meeting up” as two of four requisites to preserving family wealth is acknowledged by a J D Rockefeller descendent. [6] The other two values stated by David Rockefeller Jr. are philanthropy and, ironically, not having the disputes that ownership of a family business all too often invites. By contrast, the du Pont family, once the world’s wealthiest, rarely meet up according to John Gates’ inside account of the family relations.

In the beginning, a shared identity with the family business was unavoidable as most du Ponts lived along the Brandywine, Delaware, where the first Du Pont explosives mill was located. As the business matured, family members forged their own identities away from the Brandywine. This was largely a consequence of an ownership rift that left Pierre S du Pont with the controlling interest after buying out his cousins T Coleman du Pont and Alfred du Pont. The identification of a business’s maturation is an important one and first raised in Generation to Generation, published by Harvard Review Press.

In Generation to Generation, its authors asserted that passing the baton, known as succession planning, is critical to survival.  Passing the baton will generally come when a business has reached maturity, usually when the founder(s) retires from a career spanning twenty to forty years. It cannot be assumed, however, that the founder(s)’ will want to pass the baton or that their family will want to continue involvement. More recent research, reported in Forbes, suggests that only around one-third of business owners make these provisions.

The seminal contribution that the book’s authors made to understanding the complexities of family businesses was to create a Venn diagram of three intersecting circles:  family, ownership, and business. Each stakeholder has different roles to play giving rise to potential conflict dependent on their level of financial and/or operational involvement. Complexities are amplified where several descendants of more than one founder inherit financial and/or operational equity. As reported in Forbes, only around ten percent of family businesses pass to a third generation.[7]

A structured plan for the distribution of equity is no guarantee, however. An example of how things can play out is the third-generation of Disneys whose share of an estimated $400 million dollar trust in the “Happiest Place on Earth” is anything but.[8]  Today, a third-generation of media Murdochs each have been allocated shares in Disney following the company’s takeover of 21st Century Fox; propelling them to billionaire status independent of the family company.


[1] Sam Walton, and John Huey , Sam Walton Made in America: My Story, (New York: Bantam Books, 1992), 68-69.

[2] Sam Walton, and John Huey , Sam Walton Made in America: My Story, (New York: Bantam Books, 1992), 9.

[3] David S. Landes, Dynasties: Fortune and Misfortune of the World’s Great Family Businesses (New York: Penguin Books, 2006).

[4] Jennifer Eum, and Annabel Lau. America’s Richest Families: A Forbes Compendium of Stories Since 1977 (n.p.: Forbes Media, 2015), 106-107, Kindle edition.

[5] David J. Gates, J. D. The du Pont Family (New York: Doubleday, 1979), 349-50.

[6] Robert Frank, ‘4 Secrets to Raising Wealthy Kids According to the Billionaire Rockefeller Family’, (CNBC, 2018), < https://www.cnbc.com/2018/03/26/david-rockefeller-jr-shares-4-secrets-to-wealth-and-family.html >

[7] Todd Ganos, ‘How the Wealthiest Families Make and Lose Their Money’ (Forbes, 2014), < https://www.forbes.com/sites/toddganos/2014/02/05/how-the-wealthiest-families-make-and-lose-their-money/?sh=3bc44cfa77d6 >.

[8] Eriq Gardner, ‘Walt Disney Family Feud: Inside His Grandkids’ Weird Sad Battle Over a $400 Million Fortune | Hollywood Reporter’, (2014), < https://www.hollywoodreporter.com/news/walt-disney-family-feud-inside-706029 >.