Roots: The Family

The family circle forms the essential foundation, represented by the roots of the tree. Anyone who has explored a family genogram understands the inherent complexity of family systems. Families define “family” in myriad ways—be it through bloodline, marriage, adoption, or shared commitment.

Healthy roots are paramount for a healthy tree. Just as rich soil nourishes a tree, family traditions, core values, stories, faith, nation of origin, and cultural identity provide the foundation for growth and keep the family connected to its origins. This “soil” represents the common heritage from which the family’s unique culture and organizational structure inevitably emerge.

Likewise, if family conflicts are allowed to fester, expectations remain unvoiced, or generational differences are left to grow, decay often begins beneath the surface, threatening the entire system. In these moments, strong roots can cultivate resilience, adaptability, and unity, which are especially crucial during times of transition or crisis.

Consider the ‘Smith family,’ who owned a successful manufacturing business for three generations. For years, sibling rivalries over leadership roles simmered beneath the surface, unspoken and unresolved. This “rot in the roots” led to passive-aggressive behavior in board meetings, delayed decision-making, and a general lack of trust. When a market downturn hit, their inability to unify and act decisively as a family almost led to bankruptcy. It was only after intensive facilitated discussions addressing these underlying family conflicts that they could begin to heal and rebuild.

Trunk: The Ownership

The robust trunk of a tree, representing the ownership circle, is the critical nexus of any family enterprise. It functions as the primary conduit for the vital flow of energy and information between the family’s aspirations and the business’s operational realities. Without a strong, clearly defined structure at this core, the entire enterprise risks misdirection, stagnation, or even catastrophic failure. 

Conversely, a well-structured ownership system—fortified by appropriate governance architecture or “bark”—provides the essential foundation for sustainable growth and enduring prosperity, benefiting both the family’s legacy and the business’s bottom line. A strong and resilient trunk ensures that resources are allocated wisely, strategic directions are clearly communicated, and the collective vision of the family is effectively channeled into tangible business outcomes, especially in the face of the many powerful external and internal forces that can threaten generational continuity.

Consider the ‘Chen family’, collectively stewards of a thriving real estate empire. As the second generation grew up, joined the business, and began to inherit ownership, decision-making became increasingly fragmented without a clear shareholder agreement. This “weak trunk” meant that critical decisions about new investments or property sales were constantly bogged down by disagreements and a lack of clear voting procedures. When an opportunity arose to acquire a prime commercial property, the family was unable to act quickly due to their ambiguous ownership structure, ultimately losing out to a more agile competitor. Clarifying an authority matrix, implementing a formal advisory board, and aligning around a clear shareholder agreement strengthened their ownership “trunk,” enabling swift, unified decisions in the future and improving both the health of family relations and the performance of the business.

Canopy: The Business

The canopy of the tree—comprising its branches, leaves, and fruit—represents the business circle. This is the realm where value is created, where innovative ideas blossom, and where growth and innovation take shape. In today’s rapidly changing world, this canopy is becoming increasingly complex. Many enterprising families are expanding beyond a single legacy business, diversifying into extensive portfolios that include real estate, venture investments, philanthropic endeavors, and more. While each branch of this diversified canopy may operate independently, all depend on the strength and integrity of the trunk and roots for their sustenance and continued growth. 

Surrounding the canopy is a climate shaped by shifting economic winds, unexpected global events, and societal trends that can both challenge and support growth. Every enterprising family must navigate this constantly changing climate of opportunity and uncertainty in order to thrive, balancing the bold pursuit of profit with a commitment to resilience that is the hallmark of any enduring enterprise. 

Consider the ‘Rossi family’, known for generations for their beloved chain of bakeries, who realized their “canopy” needed to expand to ensure their long-term relevance in an increasingly fragmented market. While the bakery business remained profitable, they recognized emerging shifts in consumer preferences and sought new avenues for growth. They diversified into a specialized organic food delivery service and a community-focused philanthropic foundation. Each new “branch” pulled the family in new and unexplored directions, under a more diverse and growing network of family leaders. But their success was ultimately linked to and aligned by the robust ownership structure (trunk) and the underlying family unity and shared values (roots) that enabled them to pivot and innovate in a rapidly changing world.

Prioritizing Goals and Spotting “Termites”

This tree metaphor offers families a powerful new framework for understanding how challenges in one circle can create ripple effects throughout the entire system. More importantly, it provides a practical way to prioritize what matters most in any given moment. 

For instance, a family might initially approach us with concerns about business performance or board dynamics. However, a deeper examination often reveals unspoken family tensions at the root of the problem. In such scenarios, our approach dictates that we begin not with the symptom but rather the underlying source of the issue: misalignment within the family circle.

This more holistic perspective also helps us identify what we call the “termites” within the enterprising family tree. These termites represent the hidden, often insidious problems that are slowly weakening a family enterprise from within, even if the “tree” appears healthy and thriving on the surface. These unseen threats can often include:

• Inefficient processes or outdated technology: Like termites chewing through wood, these can silently erode operational efficiency, agility, profitability, and competitive edge.
• Unhealthy family dynamics: Whether family rivalries, jealousy and other destructive tensions are overt or whether they are hidden beneath the surface—often manifesting in passive aggressive conduct or short-sighted decision-making—they can easily risk disrupting and destroying the entire enterprise.  
• Poor communication or lack of collaboration: A breakdown in information flow or a siloed approach can prevent effective decision-making and innovation, decoupling strategy and leadership from the common values and shared vision of the family.
• Low employee morale or high turnover: These are often symptoms of deeper cultural issues as a family’s values begin to drift or become unclear, slowly sapping productivity, institutional knowledge, and access to human capital.
• A culture that doesn’t foster innovation or adapt to change: Rigidity and resistance to new ideas can leave the entire enterprise vulnerable to market shifts or broader continuity risks when the next generation isn’t engaged in decision making.

Just as termites can silently consume the heartwood of a tree, these insidious, often unseen problems within an organization can gradually undermine its very foundation. Over time, if these issues are not identified and resolved, they will inevitably lead to a decline in performance, a loss of competitive edge, and ultimately, a complete collapse. The enduring metaphor of a tree, with its intricate root system, sturdy trunk, and expansive canopy, serves as a powerful reminder to families and businesses alike that they must regularly and thoroughly inspect their entire organizational “system.” This goes beyond merely observing the visible “canopy” of outward appearances and surface-level successes. It necessitates a deep dive into the hidden layers, the “roots” and “trunk,” where these silent dangers and potential weaknesses often reside, threatening the health and longevity of the entire enterprise.

The case of the ‘Patel Group’, a multi-generational family office, provides another cautionary tale. Facing declining employee morale and high turnover in their core investment business, they initially suspected a compensation issue or a lack of career progression opportunities for their senior wealth managers. However, our engagement with various family members and other key stakeholders uncovered a long-standing communication breakdown between the two cousins who co-led the firm. Their personal friction, simmering below the surface, was creating an environment of distrust and anxiety that permeated the entire organization. Addressing these “root” issues through facilitated family communication sessions and trust building exercises would be the critical first step to restoring health to the “canopy” and ridding their tree of these debilitating “termites.”

While these cases have been anonymized to protect the privacy of our client families, the challenges they face are in fact quite generic across the remarkable families LGA has supported over the past three decades. Upon further reflection of their initial challenges and concerns, families often discover that what appears to be a purely business challenge frequently has deeper underlying causes and consequences—and can even present opportunities for a strategic pivot to reimagine their governance and deepen the family’s alignment and trust.

A Living Legacy for Generations

At LGA, the widely recognized Three-Circle Model will always serve as the bedrock of our systems-level support for enterprising families. However, we believe the metaphor of a living tree can also help families to ground their understanding of the intricate and evolving nature of these systems. This integration allows both our advisors and our clients to transcend the perception of the Three Circles—Family, Ownership, and Business—as isolated, flat, or static systems. Instead, we can begin to visualize them as living, interconnected parts of a dynamic, evolving enterprise, much like the interdependent elements of a thriving tree.

While our initial engagement with a family may often commence through the lens of one of these specific circles—perhaps addressing a pressing business concern, navigating a generational transition of ownership, or resolving a family conflict—our ultimate journey always begins and ultimately ends with the family itself. The family unit, in all its complexity and emotional depth, remains at the core of our focus and the ultimate beneficiary of our guidance. 

This unwavering commitment to the family underscores a fundamental truth: no matter how impressive the outward manifestations, such as the flourishing canopy of a successful business or the strong trunk of well-structured ownership, a tree without healthy roots planted deep within nourishing soil simply cannot stand the tests of time.