Rupert Lee-Browne, the chairman and chief executive of payments fintech Caxton, founded the company in 2002. While the family affairs of most families may not resemble the drama in the TV show “Succession,” it is still important for family offices to adopt corporate practices and technological upgrades to ensure efficient management of wealth and look for innovations that will save time and costs in the long run.
In order to stay ahead with their finances, families should familiarize themselves with marginal gains theory, popularized by Sir Dave Brailsford, which focuses on making small incremental improvements at every possible stage of a process. This approach helped British Cycling achieve great success in the Olympics by implementing various strategies such as proper hygiene practices and personalized bedding for athletes to avoid illness and improve performance.
During challenging economic times, families can also use marginal gains theory to safeguard their wealth for future generations. Payroll management, escrow, decision-making processes, and data security are areas where micro improvements can make a significant impact in protecting family wealth and avoiding potential losses. Automation through software-as-a-service solutions can also help increase efficiency by integrating with popular systems in enterprise resource planning and customer relationship management.
While technology and automation can improve efficiency, it is important for family offices to also maintain the personal approach that sets them apart from other private companies. Traditional values, ethos, and relationships should not be neglected, as technology cannot fully understand the complexities of family dynamics and relationships. Strategic advisers play a crucial role in facilitating open communication and providing tailored solutions to address potential conflicts and challenges within a family office.
Family offices need to strike a balance between innovation to address operational costs and overheads while prioritizing the unique needs of the family and securing buy-in from family members. By leveraging the value of marginal gains and working with independent advisers, family offices can improve their decision-making processes, optimize financial management, and align their goals for long-term success. Ultimately, success for family offices lies in adapting to new technologies, embracing efficiency improvements, and ensuring alignment among family members and advisers to achieve their financial goals.
