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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