This is a past issue of the Dawn Newsletter. Each edition delivers an insight, a question, and an opportunity - drawn from real-time strategy work inside family businesses. The opportunity expires with each send, but we share selected issues here so you can get a taste. Want the next one in your inbox? Subscribe below.

‍

Ray Dalio thinks companies should be run like machines. He says you should build an "idea meritocracy," where people debate openly, logic prevails, and the best ideas win. As a huge fan of his work (seriously, go read his book if you haven't yet), I used to believe this. I thought that if an idea made sense - if it was strategic, profitable, and validated by the market - then you'd get the green light. Just bring the evidence.

‍

Turns out, I was wrong. After nearly a decade building ventures across corporates, SMEs, and family firms, I’ve learned a more accurate truth: ideas don't win. People do. And people are complex, emotional beings. They don't always decide rationally. They don't follow a perfect order of things. And if you have more than one owner with their own vision, things get messy. Let me illustrate this with a real example.

‍

Last year, I was supposed to facilitate a strategy workshop for the board of a family business as part of a new venture project. We had been planning it for weeks - interviews, analysis, opportunity mapping. Then, two days before the session, the successor called.

‍

"Hey, we need to postpone the venture discussion. Actually, we're going to focus the whole session on ownership questions instead."

‍

I paused. "What kind of ownership questions?"

‍

"Well, we're not sure if pursuing this venture will affect our decision about whether to sell or keep the business long-term."

I understood the logic, sort of. But it felt strange. "So you're uninviting me from the workshop?"

"Yeah. This needs to be board-only."

And that was it. Months of interviews, analysis, and modeling - all shelved because the family suddenly realized they hadn't agreed on whether they even wanted to be in business in five years. Strange.

‍

‍

One Insight

So months later, I met Sonja Kissling, a governance expert for family businesses. I didn’t even know that was a real job. But the moment we started talking, I realized I needed to understand her world to make sense of mine - because what kept derailing my projects wasn’t the idea, the budget, or the market. It was something upstream: how decisions actually get made.

"In the first generation, there is no need for coordination," she told me. "The strategy lives inside the founder. They are the company. But by the third or fourth generation, you need coordination. And most families don't have a method for that."

This makes sense. The founder has perfect information about what they want because it's their company, their vision, their money on the line. But once you have multiple family members with different financial needs, different risk tolerances, different ideas about legacy - suddenly every strategic decision becomes a family therapy session. Sonja calls this the blind spot: families assume ownership naturally translates into direction. But without coordinated ownership, strategy stalls.

“In your example, Lisa, the successor believed he had permission to work on the company’s strategy - until he hit a wall,” she said. “And suddenly, it’s unclear: is this a governance issue, a family dynamic, or a strategic misalignment?”

Spoiler: It’s always a mix of all three.

The Captain Without a Destination

Most families want operational clarity without confronting the ownership layer. But you can't separate the two. "If the family doesn't know what it wants, the board can't execute," she said. "It's like hiring a captain but not agreeing on a destination."

Or worse: giving every passenger a veto.

Think about my workshop story. The successor had spent months building a business case. But the family had not agreed on some fundamental questions. Do we want to keep or sell the business? What financial expectations do we have - dividends, reinvestment, liquidity? What non-financial values matter - location, reputation, legacy?

Without answers to those questions, even a small adjacent venture feels dangerous. Because what if it changes the valuation? What if it makes the business less attractive to buyers? What if it violates some unspoken family principle about "staying true to our roots"?

So instead of debating the merits of the digital expansion, they got stuck on existential questions they'd been avoiding for years.

And here's the really brutal part: while the family is having these internal debates, the best ideas just... expire. Markets move. Competitors launch. Opportunities disappear.

Back to Dalio

This is why Ray Dalio's idea meritocracy sounds lovely, but doesn't work in family businesses. He assumes you can separate the quality of ideas from the politics of decision-making. But in family businesses, every decision is political because every decision affects relationships, identity, and legacy.

Dalio's system works at Bridgewater because everyone there chose to work at Bridgewater and it's a first generation business. He built that culture. They signed up for radical transparency and idea meritocracy. But later generations didn't choose to be in that business, nor did they choose to be in that business together - they inherited it. Along with all the emotional baggage that comes with inheritance.

‍

The Real Guardrails

‍

The real guardrails in family-owned businesses aren't detailed business plans - they're clear boundaries that everyone agrees on:

• Are we building to keep or building to sell?
• What financial returns do we expect and when?
• What values are non-negotiable?
• Who gets to make what kinds of decisions?

The irony is that once families clarify these boundaries, they can actually move faster than non-family businesses. Because they're not second-guessing every decision or managing investor expectations every quarter. But most families never have these conversations. They'd rather avoid conflict than gain clarity. So they end up with the worst of both worlds: family drama AND slow decision-making.

‍

One Question

Have you separated ownership strategy from company strategy? Or are you expecting one process to answer both? What guardrails has your family agreed on?

‍

One Opportunity

‍

This specific opportunity has passed. If you want to build smarter innovation strategies - and actually turn them into real venture projects - subscribe to the newsletter and stay in the loop. The next one might be exactly what you need.

‍

‍