Friday, July 11, 2014

3-GEN Planning and Transformation

In their groundbreaking book The Experience Economy, authors B. Joseph Pine II and James H. Gilmore pontificate at some length about how to turn work into theater and every business into a stage.  The aim, they say, it to give customers an exceptional experience.  In their “Progression of Economic Value,” creating experiences is “the fourth economy,” the first three being extracting commodities, making goods, and delivering services.

Yet in Chapter Nine they acknowledge that “Experiences are not the ultimate economic offering.”  Notwithstanding the title of their book, they recognize there is something even more valuable than creating client experiences: 

“Transformations are a distinct economic offering, the fifth and final one in our Progression of Economic Value.”

Pine and Gilmore cite a number of interesting examples of businesses already in the transformation business, including martial arts instructors.

Perhaps martial arts teachers are the first experience stagers to realize the transformational powers of their offerings.  Many parents allow, encourage, or even force their children to join such programs as karate, kung fu, and tae kwon do [because] they desire to instill the proper respect and self-control in their offspring.  Masters of martial arts promise not only to teach the skills of their ancient pursuits but to provide a set of rules by which students must live.  As the business manager of one such establishment declares, when parents come for enrollment they’re saying, “Fix my kid.” (p. 167, emphasis added)

The authors make a compelling case for moving toward the apex of economic value, the Transformation Economy.

While commodities are fungible, goods tangible, services intangible, and experiences memorable, transformations are effectual.  All other economic offerings have no lasting consequences beyond their consumption.  Even the memories of an experience fade over time.  But buyers of transformations seek to be guided toward some specific aim or purpose, and transformations must elicit the intended effect.  And this change should be not just in degree but in kind, not just in function but in structure.  The transformation affects the very being of the buyer. (p. 172)

People value transformation above all other economic offerings because it addresses the ultimate source of all other needs: why the buyer desires the commodities, goods, services, and experiences he purchases. (p. 172)

With transformations, the customer is the product!  The individual buyer of the transformation essentially says, “Change me.”  The company’s economic offering is neither the materials it uses nor the physical things it makes.  It’s neither the processes it executes nor the encounters it orchestrates.  When a company guides transformation, the offering is the individual. (pp. 172-73, italics in the original)

Once the Experience Economy has run its course, the Transformation Economy will take over.  Then the basis of success will be in understanding the aspirations of individual consumers and businesses and guiding them to fully realize those aspirations. (p. 173, emphasis added)

So what does this have to do with SunBridge 3-GEN Planning?

SunBridge 3-GEN Planning addresses glaring weaknesses and vulnerabilities in the business models of estate planners and asset managers, namely that fact that 90% of multigenerational estate plans fail, as evidenced by the dissipation of the family’s wealth and the loss of family solidarity by the third generation, and the further fact that professional wealth advisors lose the management of their client’s assets upon the client’s death 98% of the time. 

The solution to these problems and the underlying premise of SunBridge 3-GEN Planning is a simple, readily-observable fact of human nature: PEOPLE BEHAVE BETTER WHEN THEIR GRANDCHILDREN ARE IN THE ROOM.

By including clients’ grandchildren in the estate planning or asset management process, SunBridge 3-GEN Planning can get grandparents and grandchildren (and of course the in-between generation, the children) working together, learning together, discussing together the big issues that should be talked about but usually aren’t.  Through this approach, we can overcome issues of secrecy and control and the objectification and infantilization of the clients’ children and grandchildren, troubling issues that have overshadowed the traditional planning experience and ruined it for everyone.  Involving all three generations together changes the planning experience entirely!

But beyond that, I have seen that having the grandchildren in the room creates a very real opportunity to transform the family.  If our clients are crying out in their hearts “FIX MY KIDS AND GRANDKIDS, PLEASE!” — and they usually are — the SunBridge 3-GEN Planning model creates an environment where real and lasting change can be effected.

I see this approach to planning as a grand opportunity for estate planners and financial advisors who want to be the catalyst for valuable and long-term transformation.  I have found great personal and professional satisfaction in facilitating significant shifts in family relationships and cultures and in helping clients navigate tricky business and family transitions. 

It requires a new mind-set, new skills, and new tools to operate in this environment, but most of those are already available through the SunBridge Network.  I invite you to join us in this work.