A family, a family business and a nonfamily business are permeated by the view of reality of parents, founders and leaders. This article will focus on some specific actions that strengthen a family, a family in business and wealth transition and a nonfamily business.
Principles, values and virtues emerge from assumed answers to the origin of life, who we are, what is meaningful and how we can add value to our families, our business, our wealth, our community and society. Every family, every business reflects the culture of values established by its leaders; that culture is reflected in the conduct of those who are members.
Vision is a realistic, credible, attractive future for your organization based on principles, values and virtues. Actively defining and documenting the vision forces leaders to think systematically about the future based on their understanding of reality.
The founders or senior generation can cultivate these values and guiding principles among the multiple platforms of family, business, wealth, ownership and community involvement. Family businesses benefit from access to family narrative, history and experience in a variety of settings. The multigenerational view of family businesses produces long timeframes and significant efforts to facilitate rich knowledge transfers, allowing the giving of trust to challenge assumptions and values.
One challenge for families in business is when the family business provides the sole identity for family members.
Once family members allocate that identity to the family business, they struggle with the temptation to falsely or defensively react to “knowledge processes” designed for improvement because they fear the loss of the personal lifeline. Family members should be encouraged to assess their identities and current marketability in corporate America and take the steps necessary to strengthen that resume.
A pertinent question for younger-generation members is “Who would you be and what would you be doing if the family business system were not here?” This concept, rather than promoting an individual family member over the common good of the family business system, strengthens the family business system. It brings needed and improved skills to the table while simultaneously giving each family member an individuality that allows him to gain perspective on his future.
The same is true for founders/senior-generation members losing their identity and refusing to plan for succession.
Preventing family and family members from placing impossible demands on the family business or foundation is a major goal. Family members who are not operating from a plausible structure of values and virtues transfer may claim entitlement while shunning accountability. Founders or senior-generation members must systematically examine their vision, allowing them to exit without losing identity. Many times, they fear exiting the family business because they have no other identity.
If younger-generation members are not led through this process, the family business becomes the only identity. This line of thinking perpetuates the dynamic in younger generations who battle the fear that they cannot survive in the general marketplace. Nonfamily organizations face the same challenge when the chairman or CEO acts as if the organization exists as his identity. The results can be equally destructive.
One priority for families in business is careful attention to the legitimate perspectives of all family members, including spouses. Frequently, not every family member participates as an employee or owner of the family business.
Sometimes this is by choice, sometimes by limitations enunciated in corporate documents and sometimes by failure to comply with the requirements to participate. In any event, the family has the first right of refusal to assist each and every family member (including spouses) in pursuit of individual goals.
Succession issues in family businesses typically focus on founder to offspring while ignoring the potential succession of founder to spouse. Social capital takes time to develop, and all relationships (family, nonfamily associates and spouses) should be valued and respected in order to build communication and trust.
Families who operate from the strength of principled behavior, values and virtues are compassionate and serious about the future of each family member whether her future lies in the family business or not. Without the empowering umbrella of senior management who truly care about the future of each associate, territorial battles can occur. Aligning family values and virtues creates a pursuit of the common good for family members, nonfamily associates and the organization.
Grant Goodvin is founder and owner of Family Legacy Consultant Group, a family business consulting firm in Wichita. Reach him at firstname.lastname@example.org, 316-650-6736 or www.efamilylegacy.com.