Dominik v. Eynern, Family Hippocampus

24 February 2022

We are a peer-group network of multigenerational business family-members who have hands on experience with family dynamics. Our mission is the empowerment of families to maximize the advantages of the family effect on the creation and preservation of socio-emotional and financial wealth for current and future generations.




Table of Contents[i]

Abstract 2

Social System Dynamics. 2

Narrative Effects. 5

Framing Effect of Narratives. 7

Social effect of narratives. 8

Neurological Representation of Narratives. 10

What we do with memories. 12

‘Learning’ the narrative. 13

Epigenetics and Inheritance. 14

The Transient Nature of Narratives – an Epidemiological View.. 17

Hermeneutics – The art of making and understanding meaning. 18

Narrative Governance. 23

Narrative fragment inventory [NFI] 23

Co-creation of the family narrative. 24

Family Narrative or Family Constitution?. 26

Conclusion. 28

Summary. 28

Acknowledgements. 29



This paper discusses the importance of Narrative Governance. We explore the effects of narratives on human behaviour in a business family context, the transformative nature of narratives and how they can have sustainable effects on individuals and social systems. We will argue that narratives are acquired and neurally programmed by social processes as well as biologically through genetic information, with has implications for subsequent generations: Offspring inherit not only wealth but also stories from their parents and their forefathers. Targeted Narrative Management ensures advantageous effects of narratives while reducing aspects that are disadvantageous. It creates a shared identity and supports psychological ownership

Language that is sensory rich evokes mental images which are predominantly processed in the right brain hemisphere respectively in the default mode network [DMN]. Information presented in the form of narratives ensures better process fluency, i.e. they make information more human, more relatable and hence, easy to process with low energy investment. This is key, because the human brain is wired to conserve energy and prioritizes processes, that are minimal in energy consumption.

In contrast, family constitutions are more energy intensive to process, carried out mostly in the left-brain hemisphere respectively in the cognitive control network [CCN], which is linked to processing language and logical operations. To make family governance most effective in synchronizing the social system by fostering a sense of ‘collective psychological ownership’ [CPO][1] and to create system resilience respectively a social environment for generative collaboration, we need to work with the whole of our neurology.

Social System Dynamics

Let’s look at a business environment: work occurs through collaboration in networks of relationships that often do not mirror formal reporting structures or standard work processes – thus, the social system is self-organising which is rooted in human nature. To exist means to interact[2], entities (microscopic perspective) are constituted by personal interaction with others which constitutes a system (macroscopic view). The interaction occurs through social processes, characterized by recursive patterns of relationships and is institutionalized in social systems.

Human cognitions materialize in an interpersonal space, so we need to view everything in a multi-brain frame reference. Interactions with others fundamentally shape the mental model of the world, i.e., the way individuals think (feel) and act in the world. This dyadic dynamic of social processes leads to joint behaviours that would not emerge in isolation of individuals (entities). The emergence of complex behaviours requires coordination and rules[3], culture and customs and is partly self-organised. Social norms and hierarchical governance structures influence social systems in their organization in a formal way. The desired goal is isomorphism, i.e. that structure determines behaviour, which is often nothing more than a projection of linear assumptions into a non-linear world leading to many unintended consequences that are outside of control and command because of emergent systemic properties. This lends itself to viewing social systems as unpredictable organism rather than a predictable mechanism, where we can rely on clear relationships of ‘cause and effect’ chains and thus, can calculate the outcome of change in time.

Latent patterns of relationships in a social organism self-organize informally and create emergent behaviours, i.e., behaviours of the system that couldn’t have been predicted from knowledge of the interacting components that are structurally coupled and they are not reproduceable elsewhere. Spontaneous synchronization and desynchronization are dynamical changes in the patterns of relationships.

Naturally, social systems are open, evolutionary, and dissipative systems – they are open to flux, flow, and exchange of energy with other systems and the environment and change over time. Evolution means dynamic system changes that are occurring between two equilibria, typically in some form of creation, mutation, or destruction. State changes are perturbations that cause the system to adapt or tip the system into significant turbulences when the system cannot adapt. Perturbations come either from within or the outside of the system and initiate phase transitions that either maintain the stability of the system through self-regulation that accommodates the variability, or, when the system is rigid and unable to adapt because the perturbation exceeds the adaptive capacity of the social system, so the social organism begins to bifurcate[4] or collapses into chaos altogether to emerge into a new structure which again, cannot be explained by the sum of its parts.

A system is chaotic, when long-term predictions of system dynamics are impossible because the uncertainty growth exponentially fast and the autocorrelation function of the time signal converges to zero in finite time. In this case, any forecast is art rather than science based on statistics.

These unstable trajectories hinge on initial conditions and errors of assessments that can accumulate exponentially into substantial errors (error explosion) e.g., initially close trajectories diverge exponentially fast (bifurcation).

Perturbations can be demonstrated on a sand pile model: the initial condition is described by a pile of sand in a static rest state that changes by a randomly chosen entity. This perturbation triggers a cascade of secondary events until the system finds a new rest state.

Perturbations in family systems are happening regularly and they represent transformational events that initiate transition phases of the system.

Typical perturbations to business family systems are e.g., behavioural gaffes of family members that in the worst case can harm the reputation of the family, the birth of the second generation, marriage, divorce, death, succession or economic crisis. They are all regular transitional events that initiate transition phases. If we live through change, we prefer it gradually. However, in our reality they often come in fits and starts which often makes dealing with change more difficult.

Dynamical, social systems self-organize around attractors – it exerts appeal to the system elements to which they dynamically converge. It is a gravitational pull that shape and stabilize system behaviours around a limited number of possible states. Attractors are invariant but social attractors exhibit metastability. This means, social system equilibria are not forever, so they can have many on a spatiotemporal scale, initiated by perturbations.

The properties of social attractors are basically concepts, that people constantly try to validate. Concepts are reusable representations of objects that share common properties. Instances of concepts are also complete thoughts like purpose, identity, values & beliefs, desires, intentions, or memes used for goal-directed decisions which entails the encoding of the action-outcome contingency. They are symbols that evoke strong emotional and subconscious power that holds people to a dominant belief-system that social system entities share.

Evidence can be taken from great company leaders who shift their organization out of the quandary of extrinsic motivation, self-interested optimizing parts enforced by control and command and when things are not working, double down – and do more of the same, to a purpose driven organization, where people are intrinsically motivated because they are connect to a higher organizational purpose (the attractor) and thus, perform better and are more productive[5]. This has implications for how well a system adapts when perturbed.

How well does the system adapt or bifurcates, tips into chaos, and reorganizes is linked to the adaption capacity, which is a function of the quality and dynamicity of attractors, the diversity and freedom degrees. Sometimes organizations become victims of their own success in massively changing conditions because they fail to break-out of behavioural patterns that made them successful in the past.

This describes a rigid system has no degrees of freedom (no diversity) which leads to destruction and fracturing, a resilient system has more degrees of freedom (i.e. diversity) and is faster and more effective in adapting from one state to another[6] In other words, this system has a higher adaption capacity through resilience. But what makes a social system resilient?

There is strong evidence, that narratives represent attractors and create teleological social systems which combine functional change with increased meaning as they connect, work like memes that represent strong social attractors that can keep social systems synchronized, increasing their adaptive capacity, foster Collective Psychological Ownership of the wealth and hence, make family systems more resilient, which is essential during adaptation in phase transitions.

Narratives unfold their power as structures that give coherence and meaning to every day’s life is at the core of the so-called symbolic interactionism theory. As a long-standing approach in social and family science, it analyses human behaviours by adding subjective meanings that people impose on symbols like objects, events, and phenomena[7]. The central assumption of symbolic interactionism theory maintains that people act towards symbols (attractor), in accordance with their interpretation of meanings these symbols have for them. These meanings are malleable and are generated in an ongoing social meaning making process such as storytelling (narratives) and are modified by interpretations (Hermeneutics).

Narrative Effects

Language is a shared code of communication, habitual configurations which we use to make meaning of sensory inputs. It is the symbolic carrier of emotions.

Narratives are coherent, language-based constructs that provide a link through words that are fully embedded in a wide range of affects, processed in the right hemisphere (Broca’s and Wernicke’s area), where most of our affects and emotions are processed. Language codes are symbolic signals that are processed emotionally and cognitively into coherent, emotionally stimulating narratives.

The neuropsychological reality we construct across all modalities can be defined as a function of the imaginable which can be transported on any spatiotemporal scale by the way of language and narratives. Stories have the power to pattern and repattern our brains as they shape and reshape fundamental processes of embodied cognition, especially when it supplies motivation and causality, and the sequence of events is made meaningful and understandable[8]. Narratives configurate, re-figurate and trans-figurate experiences involving brain-based processes of retrospective and prospective pattern formation that are fundamental to the neurobiology of mental functioning. In this recursive process, meaning emerges from experiential interaction between sender and receiver and create a coherent whole. Generally, we live forward and understand backward in our everyday experience of our world. Narratives are the principal way how we organize our understanding of time, which we do not experience linear but as a product of a to-and-fro process of pattern-formation and dissolution.

As we go through life, we are actively constructing narratives with cause and effect, which attract each other mutually in subjective time. However, cause and effect are only inferred from the sensory experience of temporal contiguity[9] to complete the information set presented. Life is an activity and a desire in search of a narrative to close information gaps that we face in a world with incomplete information because information is not presented, not perceived timely, or deleted or distorted.

The information given in form of a narrative is partly processed outside our conscious control which can be used for effective manipulation of behaviours.

Studies in social cognition suggest, that our brain and our beliefs are largely shaped by cultural factors[10]. Our social identity is determined by our membership of various groups with shared memes (religious, national, political, socio-economic) and shared traditions (skills, beliefs, rituals). This shared intentionality binds groups of individuals. The connecting element are narratives, that shape social behaviour.

Narratives are oldest form of cultural transmission[11] and we are predisposed to process and remember them.

Narratives are essential for our individual and social meaning making process of experiences and how they are represented neuronally. They provide context, i.e. a meaning-making structure and shape selective attention and perception processes (motivational perception) and decision-making processes, so that reality is constructed according narrative principals. Narratives shape the experience of relationships and the world beyond[12]. Stories work ideologically and have the ability to inculcate, perpetuate, and naturalize embodied habits of cognition and emotions[13]. They constitute a valuable source of collective knowledge, mutual meaning, social cohesion, and function as an extended mind through their capacity to distribute intelligence, to disseminate knowledge about or ways of engaging with the world creating a society of mind through the ‘supra-personal’ system for sense and meaning making[14]. Cultural transmission and evolution are driven by memes, not people[15] and narrative play a key role in it as they can function like memes.

Specifically, narratives evoke emotions which can be described as embodied cognitive processes that guide our attitudes and attunements, focus attention, and coordinate our relations to others and facilitate collaborative interactions. Emotions are biocultural hybrids acquired and constructed over a lifetime under cultural influences. Emotions are instrumental for the iterative progression of narratives, often without deliberate awareness and play a vital role in anticipation and evaluation in social processes as temporal structures. How a narrative evokes and manipulates emotional responses is integral to how it builds, breaks, and reforms patterns of thoughts and memories. Emotion’s gestalt and re-gestalt our world in global ways, they facilitate our understanding and are instrumental in encoding and retrieving stories. Finally, motivations of any sort are in emotions that initiate goal directed behaviour.

Framing Effect of Narratives

Narratives are non-abstract and contextualized frames that help to conserve and mediate individual experience and can be used as background knowledge when experiencing novel situations[16].

Concretely, narratives can act as frames and memes, i.e. narratives become anchors in the sense, that they unconsciously trigger emotive and cognitive processes just by the sheer mentioning of fragments of the narrative. The framing effect epitomizes the power of linguistic subtlety in regulating decision-making, experiences, evaluation, preferences, and persuasiveness of messages[17]. The framing effect has been evidenced in many behavioural economic studies. Based on the invariance principal, the preferential choice between two options should be independent of their description. But we are predisposed to persistent decisional biases driven by frames. Experiments revealed that choices between logically two identical set of options depend on how the options are framed .[18]. This is confirmed by meta-studies: the framing condition was the top choice predictor, just followed by the expected economic pay-off[19].

Research in neuro-marketing substantiates these findings further: the subjective consumption experience is guided by external cues. The beliefs of consumers about aspects of a product like quality, price, brand, or packaging can influence the perception of the product itself (marketing placebo effect)[20]. Experiments with placebo pain killers showed, that probands stated preferences for the higher priced product, because it was perceived as more effective in killing pain, and neuroimaging studies with wine revealed preferences for the higher priced wine, as it elicited greater innervation of the reward circuitry in brains compared to the lower price indication. The price is a cue, the anchor, a fragment of a narrative which triggers a script in the mind of the consumer. But these decisions are made outside conscious awareness. Our asynchronous brain processing will synchronize the information only after a few 100ms when we become aware of our decision. We post rationalize and justify the choice we made: ‘Ah, yes, this wine must have been better because it’s more expensive. I know this from my experience’. We tell ourselves a confirming, reinforcing narrative using epistemological arguments to confirm the correctness of the decision we made to feel better about ourselves.

In other words, choices are not made based on objective information, choices are rather driven by external and internal narratives which transform frames and drive subjective experiences!

Social effect of narratives

Social cognitions are significantly influenced by narratives, especially when presented information is incomplete. Information gaps arise when primary contextual or social cues are absent or incongruent which poses a conflict situation. Narratives help to fill in the information-gaps, linguistically and affectively. This reduces perceived ambiguities in social decision-making processes[21]. For instance, when we consider with whom we want to cooperate, we may only have incomplete information about the contextual situation and the agent. So, we rely on a mix of the agents’ reputation (i.e., narratives told by others about the cooperative behaviour of the agent) and self-created narratives.

This mutual coordination and participatory sense making requires interactive, iterative socio-cognitive processing of two or more subjects to synchronize iteratively in a temporal rhythm of collaborative sensemaking which is happening naturally and can be guided with narratives that promote shared intentionality, which attracts the system towards (mutually) intended behavioural patterns. Finally, a greater social system awareness uncovers how people contribute to the systems outcome. Understanding the and experiencing the system through narratives allows individuals to realize the structure and meaning of interconnected patterns of relationships. Developing a shared picture of reality enables stakeholders to experience their responsibility for the whole system instead of just their role they assumed or that was given to them. Thus, a shared meaning-making process increases the performance of a group from the natural or habitual way people try to work together[22] and it produces a state of alignment where people freely commit in the wake of systemic consciousness.

Individuals engaged in a social process (informal and formal) can be described as coupled dynamical systems.

In physics, two or more swinging pendulums miraculously seem to coordinate their movements, but this emergence of generalized synchronization is a common phenomenon that often occurs whenever two oscillatory systems coupled to each other through action[23]. The interactive brain hypothesis relates to this phenomenon in the individual brain (neurons that fire together, wire together), but experiences of rhythmical, temporal coordination between people suggest, that this kind of coupling also takes place when two brains interact. The oscillatory dynamics associated with binding, attention, and dynamic coordination through which neuronal assemblies are formed, dissolved and reformed are similar to the to-and-fro movements of a swinging pendulum. In a simple speaker-listener model, neural coupling occurs, i.e. a shared neural substrate that exhibits temporally synchronized response patterns across communicators[24].

Herd behaviour is a social coordination phenomenon, where each person relies on the decision of others to guide his or her own actions. When well entertained masses applaud, they start out in loud chaos where everyone claps in their own rhythm. In the first transition phase, the masses spontaneously synchronize their clapping for a while before it transitions back into chaos before it fizzles out. Singing and dancing is another act of interpersonal coordination.

Neuroscientific evidence is delivered by empirical findings about neural correlates of interpersonal coordination. The Common Coding Theory basis this phenomenon on our capacity to attribute mental states to others (Theory of Mind which is essential for us to understand and enjoy stories), supported by the mirror neuron system [MNS] in our brains. The MNS may underly much of our social learning (including language and social meaning), it is involved in mutual action, understanding the intension of others, imitation and empathy[25] i.e., the interface into emotional worlds of other people which narratives can instrumentalize effectively.

Research shows, the MNS is involved in mentalizing and simulating the states of others, it is active when subjects engage in instrumental actions and one participant sees another person engage in specific activities (or in personal interactions). Simulation theory is at the heart of self-awareness and social cognition, by assuming that we understand other people’s actions, emotions, and sensations by mapping the onto our own sensory and motor mechanisms[26] and integrate them into our mental model of the world.

The activation of mirror-neuron-assembly is related to grasping the intention of the acting individual[27]. According to the neuropsychologist Efrat Ginot[28], the MNS seems to affect many experiential aspects of self-organization such as emotional (projective) identification, creating in our brains the affects and intentions of those we observe or interact with by the way of embodied simulation. We understand other peoples’ behaviour by recreating and mapping mental processes on ourselves, that would reproduce their behaviour and share their world. On a conscious level, it is a narrative like simulation, or on an unconscious level, corresponding neural circuits are innervated[29].

The MNS creates shared mental states (that inevitably affect bodily functions) and enables social cognitions, responsible for the development of social meaning, symbolic language and social contagion.

The oscillatory brain coupling through narratives has been neuro scientifically researched in hyper-scan experiments, where two or more people collaborate while researchers monitor their brains. On the condition of successful processing of incoming information and thus, effective and shared communication, it has been shown that people who shared a story, showed higher interbrain synchrony than those who did not[30].

Narrative induced neural coherence, i.e. the spatiotemporal brain-to-brain synchronization of brain activities of individuals was studied while probands were producing respectively listening to a story. fMRI imaging showed temporal correlated synchronization across brain networks in regions that are associated with understanding, identifying, and internalizing the experiences of others – respectively coordinating attention and memory[31].

Brain activities of a storyteller and listener synchronise not only in the language processing areas but also in a collection of extralinguistic areas crucial for successful communication that are associated with the mirror neuron system and known to be involved in the processing of semantic and social aspects of the story and are associated with the capacity to discern the beliefs, desires, and goals of others[32]. One of the extralinguistic areas that are activated during coupling is the insula, a region of our brain which functions as mind-body interface indicates, that the synchronization does not only affect cognitions but also the body. Thus, interbrain synchronization refers to embodied cognitions, a process that comprises brain, body and the interpretation of context and the social environment.

Narratives can be seen as a Common Coding Process, as they synchronize and harmonize brain activities of individuals as they create shared intensions that guide dynamic system outcomes. The stronger the coupling between the story-telling brain and the receiving brain, the better the comprehension of the received information and the better the comprehension[33], the stronger the interbrain synchrony.

We have seen, narratives are social constructs that synchronise brain-to-brain activities of two or more people. They are shared mental constructs, linguistically forming images symbols and memes that people can hold on to. Narratives represent attractors in social systems as elements of the social system gravitate towards to the attractor and self-organize around it. Narratives can shift and change mental models and can be deliberately used as the glue of social systems e.g. business families and business enterprises. This ‘social glue’ is especially useful when business families go through transformational changes (phase transitions), triggered by large perturbations that potentially lead to tipping points – the harbinger of chaos.

Neurological Representation of Narratives

The development of communication is fundamentally embedded in social interactions across individual brains. The emergence of any communication system requires a shared understanding of the signals meaning within a particular context among entities of a social system (Wittgenstein). Such common ground is established through learning[34].

Narratives shape our brains because they are a form of learning, the brains default position in the service adaption and survival. Learning is an associative process that makes changes to the brain on multiple levels which includes inputs about emotional memories that reach the cortex from subcortical emotion centers, such as the amygdala and bias memory construction, reconstruction, and reconsolidation after retrieval. The amygdala influences our attention, perception, and memory formation. This neurological structure projects to the frontal / temporal lobes and to the hippocampus, a formation in the brain that organizes, transforms, and consolidates memories. The thalamus is instrumental in directing our attention and projected on by the amygdala.

Emotions are in constant communication with the hippocampus which is central to memory management, guided by their emotional values, meaning and context. Emotional memories, i.e., with strong emotional markers, are more saliently present and processed than other types of memories[35].

Strong emotions related to amygdala projections are asymmetric[36]. They are quick and effective in their influence, mostly formed and enacted outside conscious awareness. Once an initial, emotional reaction is programmed, it is hard to unwire! Thus, emotion invoking narratives can unfold great leverage over this process on all levels of consciousness, creating implicit and latent patterns of behaviour.

Learning literally wires and rewires synapses and destroys and creates connections and neurons until we die (i.e., Neuroplasticity, Neurogenesis). The learning creates new connections as neurons fire and wire together, when we unlearn something, the brain de-wires as neurons no longer fire together. The brain is like a muscle that growths stronger with exercise and weakens in absence of the stimulus, i.e., uses it or lose it!

We learn through all our five senses and process information by other-than-conscious processes, and to a lesser degree by conscious processes. The information intake is directed by attention (e.g., by narratives), which is either bottom-up, i.e., external cues grab attention as they hit the sensory cortices of the brain or, bottom-down, by internal processes like conscious motivations, that focus attention. Our cognition is not linear. It is a reciprocal, to-and-fro process of assembling brain-network regions responsible for conscious respectively unconscious processes – into patterns that can temporally stabilize through connection followed by repetition and destabilize to mold our understanding.

The multi-sensory information input is held in short-term memory, a buffer zone which can be described as residual, neural activity after the stimulus. Further neurological processing will either delete the information or pass it on for further processing and storage of the information, depending on attention and focus directed by emotion. A salient factor for storage and retrieval of information are emotions (emotional markers) as described above, especially when the information is self-relevant. Sensory information with high emotional content will be granted priority in processing, storage, and retrieval. Consciously perceived information passes through our working memory, a neurological space where one or more information bits are edited e.g. for comparison. After processing, the new, synthesized information is stored in different locations in the brain. Mind you, the brain is not a filing cabinet!

It is a combination of electrical and biochemical activities spread across different regions in the brain. When the information is needed again, the information is retrieved from various locations in the brain and is reconstructed, which inevitably is error prone. Emotional content associated with the information makes events more memorable as they enhance the encoding process, i.e., consolidation of memories related to the event or narrative, but do not affect the accuracy with which the memory can be retrieved. The retrieval of memories is facilitated by synesthesia during the storing process, i.e., associating multiple sensory information to the event (multi-sensory coding of memories). A great number of neurons are dedicated to process visual information, which projects directly to the hippocampus. Spatial information is also processed in this region and used for encoding memories. The formation and reconsolidation of memories can be influenced e.g., by the way narratives are written. Rich, sensory, multi-modal language that evoke emotions and images make narratives associable and memorable because of the way our brain works.

In total, there are 7 different types of memories identified in our brains. Most important for narratives are short-term memory, the working memory, and long-term memories such as the episodic memory, which is structured and responsible for memorizing chronical details of events which is the autobiographical part that looks after self-relevant events and the semantic memory, which is unstructured and stores concepts and facts.

Narratives can be interpreted as concepts, so we can assume, that this semantic information are predominantly stored in the semantic memory section.

Narratives coordinate the different processes of our memory and thereby cultivate our ability to engage processes of binding and integration across different time scales and types of memories.

The interaction between short-term working memory and long-term memory across ever-shifting boundaries of working memory, ranging from subliminal priming effects to explicit, conscious acts of episodic and semantic recollection. Entertaining narratives are stored in our semantic memory section which presumably has more storage capacity and is easier to access. A simple chronology of events is stored in the episodic memory section of our brains which is usually limited in capacity and accessibility.

The default mode network [DMN], which includes parts of the amygdala and the hippocampus, is instrumental in memory formation and retrieval as it constantly rehearses emotional experiences and reflections about the self and others. All processes occur on a continuum of awareness and if reinforced, become part of an unconscious map which shapes attention, perception, and actions in conjunction with conscious awareness.

What we do with memories

Our memory is a neuronal representation of our experiences summarized in concepts and schemes that we use to navigate our environment. It is essential for our top-down attention, perception, and interpretation of events as well as responses. It serves us with information to predict and make sense of the stimuli we are exposed to within context. When we receive respectively perceive a stimulus, either internally or externally, we seek to recognize patterns, complete patterns by making inferences and match it with patterns that we have stored and that are readily available, either consciously or unconsciously. Matching the detected pattern to a stored pattern in response is error prone as we engage in curve fitting activities and ‘fill gaps in patterns’ (pattern completion), just to ‘make it work’ in the heat of the moment, often using narratives to help us out with pattern recognition.

Everyone has unique schemas and concepts that form a subjective mental model of the world. It defines our subjective reality and thus, how we experience the world, respectively how we respond to it. This leads to a wide variety of recursive perceptions and behaviours in social processes, some are conscious, many are unconscious. The latter amount to even changing energy levels of the individual which impacts on the social system. It is evident that we only become aware of our decisions after approximately 500ms[37], so there are pre-cognitive and pre-sensory processes which also amount to the hunches and actions we fail to explain scientifically, however we use readily available narratives (availability bias) or create narratives to reduce the elicited cognitive dissonance. These per-cognitive and pre-sensory phenomena are attributed to ‘Psi’ or the 6th sense. PSI is influenced by the narratives and influences our energy levels and thus, impacts on the social environment and vice versa.

At a cognitive level, narratives inform the present and help to imagine the future, i.e., to imagine perspectives and events beyond those that emerge due to neural processing from the immediate environment. Our ability to reconstruct memories from the past is closely linked to our capacity to imagine the future, including errors and illusions which allow the imaginative simulation of future events. It requires a system that can draw on the past in a manner that flexibly extracts and recombines elements of previous experiences and knowledge which is based on individual schemas. Paradoxically, the ability to forget is also essential. Sticky memories can be disadvantageous to adapt behaviour and patterns of thoughts and feelings to a new and changing environment driven by e.g., a narrative.

Forgetting one initial condition and replace it with a more useful version – e.g., delivered by a new narrative – is essential for humans to adapt according to an ever-changing environment. In this way, narratives can change our mental model of the world.

‘Learning’ the narrative

Our memory is a network of associations that forms through encoding memories. The quality of the neural representation of the narrative is a function of the encoding process as discussed above, sleeping patterns and the number retrieval process. Research found that efficient learning is linked to 3 retrieval cycles (retrieve and re-code) rather repetitions (re-code), and it needs 40-50 iterations for a behaviour to enter the procedural memory in becomes a habit[38].

The transformation from short term and working memory into long-term memory sections happens especially while we sleep, even if only for a short period of time. Learning is more effective when we stimulate the brain and multiple levels and leave it to rest to integrate information between retrievals. Narratives we embrace and repeatedly presented with respectively retrieve over a couple of days can literally program our mental model of the world.

Dreaming is a form of retrieving narratives we create, and it runs in the default mode network, i.e., the brain regions active when we are not focusing on any task. REM sleep can lead to new associations among preexisting memories as the brain is engaged more with processing associative memories than simple consolidation of recent memories. Emotions may play a crucial role in REM sleep. Greater amygdala activity during REM sleep adds to the deactivation of the cognitive control center. Thus, dreams allow us to peek into unconscious processes as interpreted, recalled, and retold by our conscious self[39] and thus, are very important for our learning process.

Finally, this learning process is a recursive action. It changes the brain structure and influences our attention focus, perceptions, actions, and behaviours. In turn, the neurological change alters the way we process narratives and other information we perceive.

It is very interesting, that we are not born with a blank sheet of paper that can be programmed from scratch. Narratives are partly pre-programmed by the way of biological inheritance.

Epigenetics and Inheritance

Behavioural genetics investigates the biological basis of human decision. Genes contain the information for cell differentiation hence they are responsible for the production of brain cells, hormones, and neurotransmitters. Thus, genes are affecting decision-processes[40]. There isn’t a genetic blueprint for how exactly each individual brain will turn out. We know, it is high in structural and functional plasticity and evolves as we grow up, building on previous developments (neuro-constructivism).

There is general agreement, that genes and environment interact[41], presumably for evolutionary adaptation. Epigenetic states are the candidate mechanisms that link environmental conditions with changes in gene expression and neural development. Environmental conditions can directly alter epigenetic states through the activation of intracellular pathways [42] , impacting cell-differentiation.

The structure of the genetic code for each person is fixed at conception, but the functioning of the genes (gene expression) is highly dynamic. Genes get tagged with a chemical marker that suppresses or accentuates gene expressions[43].

This is like the variations of classic stories. Romeo & Juliette is a fundamental story (the gene). All theatre and film directors and film producers have the same information set (the genes), yet they use the same information in different ways, i.e., they interpret the same story differently, expressed and reflected in the actual performance of the play (the gene expression). The reinterpretation or- change in gene expression – in the human case is performed by individual psychoneurological structures in conjunction with external, contextual stimuli (such as narratives) and change behaviours. Contextual stimuli are processed via the mirror-neuron network, which is responsible for imitating mental or emotional states of others and works on an awareness continuum. In particular during pre- adolescence and adolescence, when the cognitive control network is still not fully built, it is programmed outside of conscious awareness. Thus, traumas and narratives of parents can be handed down generations also based on their behavioural expressions and unconscious, unmediated consumption of related behavioual patterns by the child respectively the adolescent.

The propensity to exhibit certain behaviours depend on a particular combination of gene and environment across the lifespan. Epigenetic changes in gene expressions can be linked to drug abuse and toxic environments – in both spheres -socio-psychologically and physiologically with implications for addictions, anxiety disorders and fear conditioning, which reduces mental capacity.

Research found that perinatal environmental conditions influence the capacity for neural plasticity later in life through epigenetic regulation of genes critical for synaptic re-modelling, affecting social behaviours and the capacity to learn and memorize. It seems, the fetus prepares for the post-natal environment in response to a complex information set defined by the environment it is most likely to encounter, starting with mother’s phenotype[44].

Other research shows that the effects of epigenetic changes exceed what would be expected from the sum of its parts. For instance, childhood abuse transcribes a gene that is linked to eliciting anti-social behaviour. The adverse experience has changed the gene expression in a way, that anti-social behaviour of that person is more likely. Another study found variation in a gene, that is responsible for transporting serotonin, called the happy chemical, because it contributes to wellbeing and happiness. The change in gene expression was linked to a greater susceptibility to depression and suicide after adverse experiences such as divorce[45].

Another example is one gene[46], whose protein is involved with neurons making connections in the brain, notably in the amygdalae. This brain structure is associated with emotional processing (especially emotions like fear) and it plays a salient role in the learning, memory consolidation and decision-making. Defects in the amygdalae are associated with heightened sensitivity to fear, (social) anxiety, aggression and addiction The Amygdala tends to be bigger in individuals with Post Traumatic Stress Disorder [PTSD], and their Hippocampi tend to be smaller, impacting on the ability to form memories and learn. The same constellation is associated with Attention Deficit Hyperactivity Disorder [ADHD] [47].

It seems, epigenetically modified genes are passed onto the next generations. The research field of transgenerational epigenetics examines the effects of pre-natal, cumulative experience of parents on offspring. Epigenetic modifications arise over a lifespan can be transmitted, i.e. behavioural experiences in adult life might influence gene expressions, neurological wiring and behaviours in subsequent generations. Thus, epigenetic changes are a critical part of the evolutionary roots of cell differentiations with lasting effects over centuries. They affect brain development and hence, mental capacity and well-being.

Epigenetic changes in parents due to exposure to toxic stress or other toxins, including drug abuse, results in molecular malformations leading to inefficient neural signaling pathways. This affects the next generation negatively in terms of poorer spatial working memory, decreased attention span and decreased cerebral volume, which plays a key role in attention, perception, awareness, thought, memory, language, and consciousness. Pre-natal epigenetic changes due to maternal stress predisposes offspring to persistent anxiety and anxiety disorders and problems with self-regulation (control failures, impulsivity, compulsive behaviour, aggression) and learning difficulties. These changes alter the structural and functional maturation of brain regions in the amygdala and the medial prefrontal cortex [mPFC], that are important for emotional regulation, social cognition, and value-based decision-making. Offspring from parents with PTSD have enlarged amygdalae, which makes them more susceptible to stress compared to individuals with average sized amygdalae.

Behaviours that seem inexplicable are deemed ‘innate’. When a behaviour is called ‘innate’, it is the result of an evolutionary process. Behaviours are innate, when the behaviour is exhibited in response to a stimulus in absence of appropriate (prior) experience. Transgenerational epigenetics are a possible explanation for innate behaviours. It highlights the fact, that our behaviour is very much a result of nurture rather than nature!

We can conclude, our mental model of the world is codified by nurture, neurally through the social environment and memes that are deemed psychological genes[48] , the imitation of behaviours via the mirror-neuron network of implicit and explicit behaviours of others and genetically, as gene expressions change with physical and psychological stimuli. All modifications are transgenerational. Genes through via the reproduction process, behaviours, mental and emotional states of previous generations are imitated and simulated by the next generation outside of conscious awareness. Thus, mental models of the world cumulate over generations and guide behaviours based on stories that are inherited neuropsychologically as well as trans-epigenetically.

Narratives are firmly in the ‘nurture-space’, as they influence the mental model of the world, neuropsychologically and epigenetically. Recursively, the mental model of the world impacts gene expressions that influence the neurological structure, which of course, processes the mental model of the world. Thus, narratives have a tremendous effect on our behaviours and how we and future generations experience life.

The challenge is to get the narrative right, relatable, memorable and to keep it relevant along the time scale. Ideally, the narrative is constructed and managed rather then left to the forces of evolution, which is a cycle of self-organization, self-regulation, lock-in, collapse, chaos and another cycle starting with self-organization.

The Transient Nature of Narratives – an Epidemiological View

Narratives function as memes, the psychological equivalent of genes. Contagious ideas competing for survival, winners manifesting themselves through cultural versions of selection as the evolutionary biologist Richard Dawkins said[49]. In his recent book ‘Narrative Economics’[50], the behavioural economist Robert Shiller describes, how narratives drive economic events including booms and busts – again evidence for the power of narratives. He uses methods from epidemiology to understand the contagion rates of stories as the patterns of narrative epidemics mimic disease epidemics. For an epidemic to ensue, the infection – rate must exceed the recovery rate or death rate, until the process reverses.

We process narratives context dependent, based on our qualia and underlying beliefs. Good narratives evoke emotions and are contagious (thanks to the MNS), so that an increasing number of people believe in it until the trend reverses, and the majority believe in a different, competing and more compelling narrative. Thus, the old narrative has lost relevance and its effect on (social) decision-making!

A lasting narrative must be kept relevant for all family members, so it can be integrated in the current mental model of the world and in the epigenetically malleable gene pool of the family. We can compare Hermeneutic with epigenetics on an intellectual level. Looking at different parts of information of a story (the gene), changing the expression and adapt it to what the environment requires (epigenetically modified gene).

Hermeneutics – The art of making and understanding meaning

Nothing in our world has ‘meaning’ by itself. Hermeneutics derives from hermeneuein = ‘to interpret’ in Greek language. The interpretative sociologists Anthony Gidden and Juergen Habermas stated, that people’s behaviour is shaped by their interpretation of the environment. Thus, hermeneutic insights are highly relevant to the working of the social world because people attribute meaning to their surroundings by interpretation and act accordingly[51]. The interpretation is driven by the individual mental models of the world that are recursively changing in social processes through communication which makes social systems autopoietic.

A ‘sender’ conveys messages originating from her subjective neural map and mental model of the world with conscious and unconscious intention in a subjectively interpreted context and social environment. The ‘receiver’ will interpret the information, context and environment based on his subjective neural map and mental model of the world. In his response, he becomes a ‘sender’ of information of which she becomes the receiver and a new iteration of information and interpretation to make meaning starts. Communication is a recursive process with feedback loops that never stops because we ‘cannot not communicate – every behaviour is communication’ to quote the Austro-American psychologist Paul Watzlawick[52]. To exist means to interact and because like every cell, we fight for our existence and survival, we seek to perpetually interact and form social systems that are defined by an exchange of information in communication. To evaluate the communication process, we attribute ‘meaning’, the currency of communication.

Thus, hermeneutics is fundamental to the link between cognitive and social dimensions as our inner world is of concepts, ideas, images, and symbols is a critical dimension of social reality. Social scientists have often referred to hermeneutic dimensions to express the view that the human language, being symbolic in nature, centrally involves the communication of meaning, and that human action flows from meaning that we attribute to stimuli. Humans are unique in the sense that we can neurally form abstract mental images that require interpretation.

Social systems are characterized by the classical 3 dimensions: on a macroscopic level there are patterns of organisation (form), on a microscopic level there are material structures (matter) and they interact in social processes. Meaning adds the fourth dimension. It represents the inner world of reflective consciousness. The understanding of a social phenomenon must include all 4 dimensions[53].

Family businesses and business families are evolutionary systems, and they typically feature metastable equilibriums[54], so equilibria states don’t last forever because of perturbation with impacts of significant magnitudes that elicit system changes. In this way, evolutionary systems have more than one equilibrium state (metastable equilibriums), loosely defined as ‘attractor states’. As described in the first section, social systems are evolutionary in nature and this needs to be accounted for in narratives. Narrative and interpretative patterns should not be static or purely cumulative. They need to be shuffled and reshuffled in search for new understandings and for new meanings to emerge. This repatterning involves the origination of new understanding which must go through a codification and diffusion process to replace the preceding ‘normality’[55].

Through hermeneutic analysis, historians allow for an iterative process between the data and the historical context in which it was produced. Hermeneutic analysis stands for interpretation that is close to the stories’ specificities and environment and highlights the differences and similarities between meanings conveyed by successive or various versions[56]. Thus, the discipline of Hermeneutics is instrumental to initiate change and to adapt to change. Through structured meta cognitions and meta emotions, reflecting on what we are thinking and how we are feeling followed by the reflection on how we reflect on those neurological processes makes repatterning possible which has implications for our behaviour. If one part of the brain can generate a new pattern (seed-pattern) different from the conditioned brain, it can begin to spread through the brain-system. Seed patterns spark the process of displacing previously dominant patterns of thinking and feeling[57] and enables humans to cope with change or initiate phase transitions by action, following the repatterning in the brain. Language is at the core of forming abstract concepts and metaphors for coordination. Most of our cognitions are occurring in metaphors[58], so together with language, they an important aspect of socially constructed reality and its dynamics.

Effective neural coupling between to brains depends on a successful processing of incoming signal patterns so that both brains can extract information (common code), i.e. language and metaphors both entities can relate to, so that both entities can extract information[59]. The brain-to-brain coupling substantially diminishes without common language. The same is true when a recipient receives signals h/she cannot relate to. With the help of language and hermeneutics we improve the effectiveness of communication (language & meaning) and thus, foster the all-important brain-to brain coupling.

The same event can be described and interpreted in different ways, giving rise to different ways of perceiving, and understanding it. Narratives will influence the recipient’s subjective mental model of the world in different ways. Processing information from narratives, which requires the hermeneutic capacity to configure signals into meaningful patterns[60], is based on a recursive relationship of reception, perception, and storing, based on previous experiences stored and the perception of the current context– the personal story (the initial condition). The personal story is stored neurally, somatically and genetically as described above. Thus, interpretation is intrinsic to all human knowing and judgment, as it is not reducible to the knowledge of material conditions.

In short, hermeneutics is the art of understanding, making sense of the world[61] through interpretation and meaning. It is the about the integration of information into a meaningful whole, motivated by personal interests, concerns and desires that are influenced by culture and paradigms. This integration leads to the social construct we call reality, and it happens on a conscious as well as on an unconscious level. To understand reality, we need to understand the context which influences how we understand a particular part. Ultimately, we are all connected through a path-dependent history. Thus, it is illusory to believe, that self-thinking in isolation as a possibility. Inevitably, all thinking, and perception is influenced respectively shaped by context, culture, and prevailing story, be it implicitly or explicitly. So is the illusion of knowledge: the knowledge human mankind is distributed in various minds and stories[62]. As finite human beings, we only have partial access to knowledge, thus, knowledge is a collective, not one individual alone has got the knowledge. The question is, how can we access the knowledge of others. Stories are a viable mean, but they are cut-off from living speech and must relate meaning differently. Meaning comes from teleological interpretation, so all meaning making requires choice and results in a hypothesis.

Mentalizing, ordering and integrating the fragments of knowledge into a coherent representation that makes sense to us and gives meaning on an ongoing basis is the challenge at hand. The exegesis of narratives, i.e. the analyses and reconstruction of stories and patterns must take into account the historical and current context and leaves a lot of room for choices (freedom degrees). Either one adopts a positivistic approach and constricts meaning or focuses on intuitionism and re-constructs the story the way the reader purposefully wants to understand the story. This gives even more room for choice of course. Even if the text is the same, the meaning changes with the personal, motivational perception of the reader. The construction of meaning requires an artful integration of fragmented details into a coherent whole through acts of imagination based on personal experience, which is held in the personal mental model of the world as discussed above. Panta Rhei, every story needs to evolve. For example, “second-generation entrepreneur stories are less about overcoming disadvantage than they are about overcoming advantage”[63]. So, we need to integrate something unfamiliar into our familiar way of seeing things, seeing similarities in differences and enlarge our perspective by making new connections and meaning. Over the life cycle, family business narratives need to be transformed to different extents to ensure the validity and effectiveness. And it is a much needed, although difficult, endeavour for the family to avert being stuck in a certain frame, which could be linked to the identity of its founder, for example. Transforming a narrative means to go beyond the existing identity or identities by the affirmation of differences. Going beyond the stalemated status of cultural involution requires intervention by outsiders that help disintegrating and fragmenting past narratives and reworking them on re-signifying and repurposing the existing cultural heritage[64].

Thus, every story must be redacted, starting by traditions to make new connections, which requires imagination and dialogue. It is about the accumulation, configuration, and re-configuration of patterns in a way that gives much expression to interconnections of patterns. A single act of pattern recognition is inherently static, where patterns are treated as having a fixed meaning, usually summarized in a conclusive statement.

The dynamic movement from one pattern to another i.e. evolution and transformation is a fact of life and our existence, so we need to combine the known with the unknown bidirectionally, the determined and the emergent in multiple acts of recognition and interpretation. The absence eliminates freedom degrees, makes social systems rigid and ultimately leads to fundamentalism or ‘Familyisms’[65], memes that are no longer useful but clung on.

The organizational imprinting hypothesis describes how certain behaviours are reinforced within organisations. At the beginning i.e., in the sensitive period (the formative years), organsational practices are established and partly self-organise into structures. Due to subsequent inertia to change, these (multi-layered) imprints are defined as values and rules of business conduct and personal interaction and are imposed on an individual or the collective and can persist, even if the world has changed[66] and thus, may be limiting and no longer be useful.

Familyisms correspond to the notion of traditions: beliefs, customs and practices that are consciously (and unconsciously i.e., tacit traditions) transmitted to the next generation and how family businesses build socioemotional wealth. Traditions describe the uniqueness of innovation or the lack hereof in family businesses. recently, most research suggested that family businesses tend to be less innovative than nonfamily firms because of the deference to tradition and the need to maintain a consistent identity[67].

Family businesses struggle with the tension between the need to maintain a continuous and coherent identity (internal world) and the need to adapt to the changing demands of the present or the future (external world – the environment). While all firms struggle with this tension, it is felt more acutely in family businesses because of the (interpreted) overarching need to honour the values, beliefs, and vision of the founder (family). As a result, family businesses tend to privilege continuity over change—despite their (dormant) ability to follow through on innovation projects—a phenomenon referred to as the “innovation paradox”[68]  But holding on to continuity is illusory, since change is the only constant in life, be it social organisations or social organisms or even individuals. Reinterpretations would help the case.

Apparently, there is growing body of research that reinforces the awareness of the foundational role that traditions play in family business identity and decision making[69]. But traditions must be interpreted and re-interpreted in an ever moving present if they are not to dampen human agency. By reinterpreting old traditions in new ways, current generations can express their agency and legitimacy in the present, by adapting rather than adopting the voice of the past[70]. Other suggests that family businesses can be quite innovative but are constrained in how innovation might be expressed by their deference to tradition. To add to the conflicting results, a recent meta-analysis concludes that family businesses have little constraint on innovation output but, relative to their nonfamily peers, simply invest less in innovation in the first place A rhetorical history lens, by contrast, focuses on the tradere, or the construction of meaning that occurs by the process or act of transmission across generations[71]

So, it is evident and essential for any kind of agency and innovation, that families have a story they can relate to and identify with dynamically by analogical reasoning (i.e., allowing a static document drafted generations ago to be reinterpreted in the context of present circumstances) and integrating new information. The family needs to create and keep the meaning of the story during the situational dynamics that occur in their specific spatiotemporal existence. A narrative of quality is persistent, it functions as a meme and provides an anchor, a common social attractor that fosters the cohesion of the social system, thus, it becomes and remains the social glue of the family because it is dynamic. But this is easier said than done. Narratives must be created in a way that everyone can connect to it through a co-creative process.

This process can be facilitated by Narrative Governance, which is an iterative creation and meaning making process.

Narrative Governance

There are two interdependent, recursive processes in narrative governance. The diverse fragments of a narrative must be identified, interpreted and brought together in a comprehensive and coherent representation of the narrative in the gestalt of an epistolary novel[72] , that allows the mentalization of the past and conveys the experience of e.g. the founder of the business as he built it. It should be in a way that it elicits empathy and projective identification of recipients are real enmeshment in his or her story. Historical events are not easy to reconstruct. Incomplete information must be artfully inferred, augmented and completed by the author as well as by the recipient by making inferences, modelling the unknown by the known based on as many facts as possible.

Narrative fragment inventory [NFI]

It is the first stage of participative repatterning, identifying individual stories – the raw material that provides the basis for a comprehensive systems analysis and finally, a uniting story. It is a data collection and data interpretation exercise, not just a fact-finding mission!

Patterns of thoughts and feelings about the past and present need to be articulated with the help of progressive elicitation, so that tacit knowledge becomes explicit knowledge that can be shifted into new configurations. Members of the system need to be interviews about the history of the current situation and should be engaged in own analysis and interpretation of facts to surface their mental models of the world.

Narrative fragments have various degrees of fluidity across generations (laterally) but also with generations (vertically). They can be stable, abstracted, reframed, generalized, distorted and deleted from conscious memory.

The various narrative fragments can convey multiple meanings to various stakeholder groups depending on the degree of emotional and spatial separation between individuals who experienced the actual events and those simply retelling or hearing them.

The interviewer should permit the interviewees to select topics according to the relevance they assign to avoid any biases introduced by the interviewer listen out for interdependencies, contradictions, curiosities, contradictions between answers and accounts of events and for different interpretations which are to be reconciled, especially in the co-creation process of the Family Narrative. It is not only learning what people think and feel, but also about WHY they exhibit these patterns in various contexts.

Narrative fragments are (like all stories) subject to multi-layered interpretations and perceptions and meta interpretations and perceptions (see section on Hermeneutics) and consequently convey various meanings leading to a variety of outcomes.

How we create the future is influenced by the past and present, i.e. it is path dependent. Families need to have sufficient information about the sequences and bifurcations that happened in the past embedded in historical context, as it informs the presence and the future, that is, the choices they will make for creating their future.

All family members know bits and pieces of the family narrative, from the past and from the present. Some fragments are in their conscious awareness, many are not, some are talked about, other fragments are kept as an open secret under the lid of social norms. Narrative fragments are often held unconscious, buried deep inside the memory and hence, must be extracted. Yet, regardless of the awareness status, all narrative fragments influence the family system and even if narrative fragments are unconscious, they can disrupt the dynamics of a family system in perilous ways. Thus, it is essential to bring all narrative fragments to the surface and edit them with conscious awareness. Hence, the first step of narrative governance should be a detailed ‘narrative capture’ and content creation in a coaching process that facilitates the creation of a narrative – fragment inventory of all family members in conjunction with context dependent interpretations of these narrative fragments on an individual level.

Co-creation of the family narrative

After all family members have contributed to the NFI, the fragments need to be brought together in order to create a catalytic understanding of the systems’ current state and to form a coherent and accepted, representation of the family narrative that is rewarding to read because it is more than the sum of its parts with sensory rich language, evoking emotions and rich imagery. Effective, participative repatterning requires systemic coaching practices and facilitations to integrate and embed the various fragments and interpretations to one narrative that family members accept and happily own. Based on this narrative draft, a qualified author formulates a script in a language the family can relate to. The family history unfolds seamlessly from beginning to end, a temporal moment which is accepted as the presence. It leaves the reader with the perception of an integrated story, highlighting cause and effects of actions that influences their perception of the system and system dynamic.

The result should clarify all complex interdependencies of the system unambiguously (system awareness). However, the capacity to play with the temporality of the narrative is a defining characteristic of narratives[73] . It should raise the attention, get the working memory and conscious awareness going. The narrative structure plays with the decentralized, asynchronous processing of the brain that is constantly seeking to synchronize and integrate information. Thus, the artful telling composes temporally disjunct subunits of events, episodes and conflicts created through situations, expectations, opinions, knowledge, values and beliefs to create patterns of equilibrium and disequilibrium.

Reading the family history should entail the alternation between theme and horizon that actively involves the reader in the process of synthesizing an assembly of constantly shifting viewpoints, observation made from moving positions. The author should manipulate the perceived chronology to provoke curiosity, suspense or surprise through temporal disjunctions that play with the tension between concord and discord patterns[74]. Temporal patterns of segmentation and integration create some entertainment value with historical content and within historical context. The recipients should be able to associate with the actions, the persistence in the face of risk and danger, the ability to recover and learn from adversity, calamity and failure i.e. to imagine and simulate thoughts, actions and feelings. Simulation is the reenactment of perceptual, motor, and introspective states acquired during experience with the world, body, and mind[75]. Brain regions responsible for the action have found to be stimulated by virtual imitation which is possible via the mirror neuron system [MNS] in our brains as discussed above. Felt emotions are accompanied by and are intertwined with thoughts, that give emotions shape and meaning. This way the family narrative should become an embodied cognition through experience.

Embodied cognition is a holistic, complex process involving body, brain and the environment. Human reason is structurally shaped by our bodily (phenomenological) experiences, brains = minds in conjunction with the social environment, as a living system couples to its environment structurally through recurrent interaction, each of which triggers structural change in the interacting system in response and through which it learns – i.e., the human being[76]. Even if we cannot change the system per-se, we can perturb it through embodied cognitions and trigger changes, which manifest in self-re-organization of embodied cognitions. In other words, people feel and think differently about things.

Francesco Babera et. al., observe that retelling the family story can create a common language (pivotal for shared and effective communication and thus, the synchronization of interbrain activities as discussed above), that enhances the stability of the legacy story with detail abstracted into a more succinct or usable message[77], which can be used as the basis for affirmations to foster inter-brain synchronization.

Consequently, it stands to reason that reading or listening to a narrative that imitates an action (and provoke emotions and embodied cognitions) would have practical effects on the brains and bodies of the recipients and on their capacity for acting in the world[78].

After the whole family ratifies the document, it can be bound in a book format, allowing for re-editing and re-interpretation respectively the continuation of the narrative. As discussed above, it is paramount to keep the narrative relevant and useful for everyone individually and for the system. It is important to update and refresh narratives and keep family members connected to the narrative they have co-created. Current or recent events that are deemed significant by the family, must be interpreted, agreed upon and integrated. Historical events must be interpreted not only in historic context but in current context, so that future generations can relate to the family narrative just as the generation that wrote it.

When narratives evoke emotional responses, they are not only becoming more memorable (emotional markers based on multi-modal, sensory rich language), but they intertwine us with each other by coordinating the temporal processes of through which our experience of the narrative unfolds. The social power (glue) of narrative emotions derives from their ability to intertwine our experience of time and this subjective phenomenon is intersubjectively shared[79].

Family Narrative or Family Constitution?

Narratives help to mentalize and connect to the history of the system and its current state, they inform the present and expectations about the future and coordinate neural activities of people. They have strong adhesive properties in social systems as long as all members of the system think and feel the narrative and memes are relevant to them. Narratives are overarching principals, meta-frameworks that influence decisions and behaviours. It has been shown that people who have a shared goal and shared purpose are more likely to reduce their ego dominance which increases the propensity to cooperate. Ideally, the narrative constitutes such a shared purpose that motivates family members to unite and to cooperate in various contexts. Narratives that work don’t simply fix a problem on the surface – they heal a system as they go very deep in a neurological sense and work on the root causes – the WHY – as they work on the bottom of the iceberg emersed in water invisible to the eye of the beholder.

Narratives create system awareness and a shared context within context, they are about understanding patterns of relationships and their transformative changes in multiple, spatiotemporal spaces.

Previous studies showed coupled and synchronized brain responses to shared external input -be it visual information or auditory information, suggesting that verbal information is just as powerful when it evokes images. Furthermore, verbal information enables us to directly convey information across brains. Thanks to brain-to-rain coupling, this information can be spatially- and temporally remote in the absence of stimuli other than language[80].

Narratives are metaphors that linguistically create images in our minds enable multiple, coupled neural response patterns. Thus, narratives are highly accessible as they are mostly stored in the semantic memory section and help to imagine the future, whereby they engage the default mode network [DMN] in our brains. It is instrumental in the integration of internal and external experiences and stimuli and is active when the brain is at rest, i.e., when it is not engaged in a specific attentive activity and where dreams are processed. It entails remembering and reflecting on the past and imagining the future, conceiving the viewpoint of others and spatial navigation. These interactions between remembering (reflecting) and imagining suggests, that narrative construction (and reconstruction) is processed in the DMN in the brain[81] . It processes information effortlessly, mostly in the right hemisphere in conjunction with pictures and creativity. The DMN can process information in parallel and is engaged in daydreaming, e.g. in self-referential reflections about beliefs, interpretations of experiences, sense and meaning making , simulations of the future self, respectively social and moral cognitions by the way of ruminating about mental states and emotions of others (narratives of others), i.e. internalizing subjective interpretations of other peoples’ actions in relation to own beliefs, goals and experiences derived from social processes[82].

Processing the family constitution is a different matter. Dry verbal language in family constitutions is limited and restricted to logical processes and often focus on the ‘WHAT and HOW’ of fixing a problem and optimize parts of the system in isolated from other parts – they only target the tip of the iceberg, i.e. the symptoms but not the causes.

Family constitutions are inspired by a technological culture reinforced by cultural and academic conditioning and world view propaganda that fixes problems mostly out of context and thereby risking many unintended consequences and dependencies.

Another point is how we process the content of family constitutions. A family constitution is about understanding and applying the principles, rules and regulations laid out in a (quasi) legal document. Information related to family constitutions tend to be stored in the episodic section of the memory and processed in the cognitive control network (CCN) in our brains which is responsible for the executive functions involving the pre-frontal cortex (dlPFC). Processing content from a family constitution is an attention and task- focused brain activity is effortful, a sequential process that requires way more energy and time than the DMN would use.

Finally, narratives processed in the DMN allow for more degrees of freedom than the CCN processed information of a family constitution. The combination of both is a winning strategy because, family narratives and family constitutions are complementary. Like in the iceberg example, we need to take a holistic view and work on the symptoms (tip of the iceberg) that a rarely spatiotemporarily coincide with their root causes (invisible lower part of the iceberg). Thus, Narratives are a great basis for family constitutions, which are more specific and operational about organizational principles of a business family and thus, have less freedom degrees.

A combined family governance that allows for a holistic solution and a balanced blend of ‘freedom degrees’ makes the family system resilient and even anti-fragile. Thus, the system manages shocks very well, learns and emerges as a system which is even more resilient.


Narratives are a pivotal system-intervention, important for the existing family system to manage unfolding change processes in line with a family-defined trajectory, but also variations of existing dimensions and relationships within the family, which tip the system into new configuration of relationships (e.g. succession) but also in evolutionary change processes, where new dimensions or new features are added e.g. through transitional events at the family level (birth, death, marriage, divorce) or external level (e.g. introduction of an external CEO) where new system emerge and sustain.

Narratives are essential for family-system resilience, which is especially important in a world of VUCA and turbulent changes. The degree of success in dealing with exogenous shocks to family systems is a function of how quickly the family system can react and adapt (adaption capacity). When the family system is prone to endogenous shocks it is fragile and consequently, it cannot be resilient. Even worse, exogenous shocks can provoke endogenous shocks and ruin what previous generations have built in a short period of time. The loss of socio-emotional and financial wealth of business families through system shocks is often observed in the 3rd generation: the 1st generation builds the wealth, the 2nd generation is not really invested in but they carry on regardless, trying to figure out how things work based on the information they snapped up and take over. The following 3rd generation is mentally distanced, financially comfortable but do not really understand what it entailed to generate their physical well-being because no one took the time to tell and connect them to the family story. Nonetheless, the family story drives many behavioural and relational patterns, mainly outside our conscious awareness though. The 3rd generation may find it difficult to behave responsible and accountable with respect to the family history because they don’t have any to go by. Instead, they compensate the void that they are left with, which can result in overspending, entitled behaviour and jeopardize the good reputation of the family. A common family narrative allows the family system to heal as it mentally connects the past and the current generations. It contributes significantly to the resilience of the family system and thus, it is a vital investment for generations to come. All other family governance activities, such as the process of creating family constitutions should be smoother when it is firmly embedded in a co-created family narrative.


We have established that social systems are dynamic and change frequently, how narratives are created and influence the dynamics of a social system and system elements and increase the adaption capacity, how they are represented in our mind and that it is necessary to engage in a mindful process of narrative co-creation which must result in people associating with the story through mirroring, imitation and simulation as well as identification to foster the desired co-intentionality and prosocial behaviours. Furthermore, we have established, that it is paramount to engage in a perpetual co-creating process of ‘narrative meaning’ and retelling it, to keep the narrative represented in the collective mind and relevant for everyone. Only then can the narrative unfold maximum effect for current and future generations and create collective psychological ownership. We highlighted the fact, that narratives have a meta-status and other typical family governance activities like the creation of family constitutions are guided by the principles provided by the narrative (narrative embedded family governance). In contrast to family constitutions that are mostly treating symptoms, narratives are targeting the causal structure of the system and they are remembered and retrieved effortlessly. Narratives have more degrees of freedom and engage brain regions, that are active when we relax. Thus, it is not about creating a family constitution or a family history. Both are vital instruments to organize, regulate and future proof the social system we call ‘business family’.


I like to thank Mike Sergeant, media trainer (London) for asking the question if business families could be interested in narratives services and Zita Nikoletta Verbenyi, founder of The Legacy Atelier (London), for highlighting the importance of interpretation and Hermeneutics in this context.


[1] The Socio-psychological Challenges of Succession in Family Firms: The Implications of Collective Psychological Ownership, Noora Heino, Pasi Tuominen, Terhi Tuominen, and Iiro Jussila in “The Palgrave Handbook of Heterogeneity among Family Firms”, Palgrave McMillan

[2] Illusions of Human Thinking, Gabriel Vacariu, Springer

[3] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson, HHS Author Manuscripts, 2012

[4] System Thinking for a Turbulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[5] Creating a Purpose-Driven Organization, How to get employees to bring their smarts and energy to work , Robert E. Quinn, Anjan V. Thakor, rom the Harvard Business Review Magazine (July–August 2018)

[6] Based on an example in Embracing Complexity, Strategic Perspectives for an Age of Turbulences, Jean G. Boulten et. al., Oxford University Press

[7] The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[8] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press


[10] The Social Neuroscience of Attachment, Pascal Vrticka in ‘Neuroscience and Social Science, Springer

[11] Narrative Economics, Robert J. Shiller, Princeton University Press

[12] The Relational Lens, John Ashcroft, Roy Childs, Cambridge University Press

[13] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[14] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[15] Thinking in Complexity, Klaus Mainzer, Springer

[16] Organizational Epistemology, CH5, Kasara Seirafi, Springer

[17] Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilin Rao, Hongming Zheng in Neuroeconomics, Springer

[18] Thinking Fast and Slow, Daniel Kahneman, Penguin

[19] Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilli Rao, Hongming Zheng in Neuro Economics, Springer

[20] Consumer Neuroscience and Neuromarketing, Bernd Weber in Neuroeconomics, Springer

[21] Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilli Rao, Hongming Zheng in Neuro Economics, Springer

[22] System Thinking for a Turbulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[23]Professor Steven Strogatz, researches complexity and chaos theory and looks at various instances of spontaneous synchronisation and self-organisation is his book “Sync: the emerging science of spontaneous order (penguin press science)” 

[24] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson, HHS Author Manuscripts, 2012

[25] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[26] The Student’s Guide to Social Neuroscience, 2nd Edition, Jamie Ward, Routledge

[27] Neurobiological Approaches to Interpersonal Coordination: Achievements and Pitfalls, Carlos Coprnejo, Zamara Cuadros, Ricardo Morales in Neuroscience and Social Science, Springer

[28] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[29] The Student’s Guide to Social Neuroscience, 2nd Edition, Jamie Ward, Routledge

[30] Compare Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson, HHS Author Manuscripts, 2012

[31] Coupled Neural Systems Underlie the Production and Comprehension of Naturalistic Speech, Proceedings of National Academy Of Science

[32] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson, HHS Author Manuscripts, 2012

[33] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson, HHS Author Manuscripts, 2012

[34] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson, HHS Author Manuscripts, 2012

[35] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[36] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[37] Antonio Damasio

[38] Wired to Grow, Britt Andreatta, 7th Mind Publishing

[39] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[40] Molecular Genetics, Martin Reuter, Andrea Felten, Christian Montag in Neuroeconomics, Springer

[41]The Student’s Guide to Cognitive Neuroscience, 4th Edition, Jamie Ward, Routledge

[42] Epigenetics, Frank Brown, Amazon

[43]The Student’s Guide to Cognitive Neuroscience, 4th Edition, Jamie Ward, Routledge

[44]Epigenetics, Frank Brown, Amazon

[45]The Student’s Guide to Cognitive Neuroscience, 4th Edition, Jamie Ward, Routledge

[46] CDH13

[47] A brief history of everyone who ever lived, the stories in our genes, Adam Rutherford, Weidenfeld & Nicholson

[48] Synch, the emerging science of spontaneous order, Steven Strogatz, Penguin

[49] Sync, the Emerging Science of Spontaneous Order, Steven Strogatz, Penguin

[50] Narrative Economics, Robert J. Shiller, Princeton University Press

[51] The Systems View, Luigi Luisi, Cambridge University Press


[53] The Systems View, Luigi Luisi, Cambridge University Press

[54] Introduction to the Theory of Complex Systems, Stefan Turner Oxford

[55]System Thinking for a Trubulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[55] The strategic use of historical narratives in the family business, Rania Labaki, Ludovic Cailluet, 2018,

[57] System Thinking for a Trubulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[58] The Systems View, Luigi Luisi, Cambridge University Press

[59] Speaker-listener neural coupling underlies successful communication, Greg. J. Stephens, Proc Nati Acad Sci 2010

[60] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[61] Hermeneutics, A Very Short Introduction, Jens Zimmermann, Oxford

[62] The Knowledge Illusion, the myth of individual thought and the power of collective wisdom, Steven Sloman & Philip Fernbach, Pan MacMillian

[63] The strategic use of historical narratives in the family business, Rania Labaki, Ludovic Cailluet, 2018,

[64] Based on R. Labaki et. Al., in The Palgrave Handbook of Heterogeneity Among Family Firms, Esra Memili, Clay Dibrell, Palgrave McMillan

[65] Pers. Comm. Zita Nikoletta Verbenyi (2019)

[66] Compare with: The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[67] Compare with: The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[68] Managing Traditions: A Critical Capability for Business Success, Roy Suddaby, Peter Jaskiewicz, Family Business Review

[69] Managing Traditions: A Critical Capability for Business Success, Roy Suddaby, Peter Jaskiewicz, Family Business Review

[70] Managing Traditions: A Critical Capability for Business Success, Roy Suddaby, Peter Jaskiewicz, Family Business Review

[71] Compare The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[72] Like Goethe’s ‘Sorrows of Young Werther (1775) or the satiric counter-version by Friedrichs Nicolai, ‘The Joy of Young Werther’ in the same year

[73] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[74] Stories and of Life, Fritjof Capra the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[75] Perceptual Symbol Systems, Lawrence W., 1999, Behavioural and Brain Science 22:577-660

[76] The Systems View, Luigi Luisi, Cambridge University Press

[77] The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[78] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[79] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[80] Compare: Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson, HHS Author Manuscripts, 2012

[81] Memories of Sleep and Dreams: The Construction of Meaning’, 2011) in Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[82] Rest Is Not Idleness: Implication of the Brain’s Default Mode for Human Development and Education (2) in Emotions, Learning, and the Brain, Immordino-Yang, Norton

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