Family in the Family Business

Family businesses have many competitive advantages: strength of relationships, cultural fit of family members, shared faith and values, strong commitment of those involved, strong work ethic of family members, patient capital, shared visions, and flexibility in hard times.

Family businesses tend to grow differently than their competitors on Wall Street. A longer time horizon focuses not only on profitability but the sustainability of a legacy for the rising generations. This allows the family business to apply the concept of patient capital to projects that may not be fully realized till the next generation assumes the mantel of leadership.

However, family businesses also carry tension and baggage: tension between various levels of shareholders or baggage of the family relationships. Yet, in spite of the tensions or baggage, family businesses typically have a commitment of both family members and employees to the family and the business that non-family owned companies don’t have.

Some families live out their values more closely than others, but each family has a set of values. Every family has values.  They may be spoken or unspoken. Though the world is ever changing, a family’s core values influence attitudes, drive behavior and action.  It is who a business family is. Values are energizing, motivating, and inspiring. When people care passionately about something—in other words, value it—they can spur themselves to great achievements. The core values really are conscious motivators! Articulating these core values will influence a business family’s worldviews; competitiveness; beliefs about wealth and philanthropy; and how major decisions are made.

The family’s vision is the shared image of the family’s definition of success and what the family wants the business to be.  Having a vision is critical for the journey to realize the goals and dreams of the family. The vision provides a future orientation to answers questions like: How do we want to utilize our resources and care about those who are important to us? Following the vision requires commitment. Commitment is best considered in the framework of the family, the business, and the ownership of the business. This means results are best achieved with not just a single event or item, but by working over time to develop the capability of the family to manage governance and decision-making. With commitment to a “visioning” process, there is built in accountability to keep everyone focused and on track.

Keeping family in the family business is not easy and does not happen by chance. It requires hard work, commitment, and accountability. Assistance from an impartial third party can be invaluable to work through the tough times.

Keeping family in the family business can be fun and rewarding.

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