Keystone Private Family Office -The tenth man principle.

Having recently spent a week in hospital and a further week at home recovering from surgery (not a great start to the year), I have spent a lot of time watching movies, most of which I had already seen.

One such movie is World War Z, starring Brad Pitt. The basic premise of World War Z for those that haven’t seen it is that an infection has spread throughout the world which turns those exposed into Zombies and Brad Pitt’s character is charged with investigating the outbreak to find a cure.

Now, before you bemoan yet another article trying to use a COVID-esque segway to provide relevant, urgency or a call to action and move on to the next article, hear me out.

This missive is not about the problem (being the Zombie apocalypse), rather it is about being aware of the alternative viewpoint.

During his investigations, Pitt’s character has cause to fly to Israel where he finds the city protected by a very large wall which (until later in the movie) is keeping the Zombies at bay and the people safe. Observing the time, cost and effort involved in building the wall, Pitt queries how did Israel ‘predict’ the unfolding Zombie apocalypse?

This brings me to the point of this article.

Pitt’s host points out that they didn’t predict the event, they prepared for it. Such preparation was based on the ‘tenth man principle’. In simple terms, if 9 people in the group (of ten) all agreed on any topic, it was the job of the tenth man to take the opposing view and investigate such.

I am a firm believer that where there is consensus, especially overwhelming consensus, it is foolhardy not to challenge the assumptions behind such consensus and consider alternatives. This process is relevant across the entire spectrum of the family office environment, whether it be:

  • Financial
    • State of the markets
    • Investment proposals
    • Good and bad investments
    • Return expectations
    • Accepted practices
  • Estate Planning
    • Use of testamentary trusts
    • Bloodlines or blended lines
    • Structuring of philanthropic activity
    • Managing expectations
  • Family dynamics
    • Who is the black sheep?
    • Who is or is not going to get divorced?
    • Timing and method of generational transition
    • Next-gen in the business or not

Within the broader family, the advisor framework, industry experts and even the community at large there will always be opinions on the above (and many more topics), often these opinions can lead to an apparent consensus and considered alternatives are lost in the noise.

Please note that I am not suggesting that consensus, whether it be based on professional advice, expert opinion or even just the simple majority is not correct or an appropriate course of action, simply that it is important to take a step back, consider the alternatives and make informed decisions.

Hope for the best, plan for the worst.

By David Jackson