Your values: Purpose and context
Fiscal, legal and financial questions often arise hand in hand with the very personal aims and values of family members. Shared values, adopted by successive generations to preserve the family legacy, are fundamental to the success of multigenerational family enterprises.
Management routine in a family enterprise can be affected by conflict between family members over the way money and power are distributed. Differing goals from one generation to the next are another common source of conflict.
Families in which all members agree on common values greatly benefit from the consistency between the goals set for the business and the family’s core principles.
Purpose is the glue that binds the family enterprise together. It builds on family history and stories to engage future generations, whether in the business or in other family activities such as philanthropy, the family office and investment management.
Purpose plays a key role in managing expectations and setting out the principles that guide family members in how they interact with each other, both inside and outside of the family enterprise.
Family enterprises, with their focus on the long term, are particularly well suited to giving back to the community. They take care of their employees through fair wages, a commitment to safety, worker training and scholarships. They encourage their executives to serve on nonprofit boards. This is part of the family legacy and the founder’s value system.
Leading families have a supporting governance framework, including a family charter to define a common purpose and shared values, to support family unity and preserve the family legacy.
Effective family governance often requires organizational redesign. This means reshaping the structure of the business and the roles of its management and employees so that they are aligned with the family’s purpose and long-term vision. The challenge is to make these fundamental organizational changes without upsetting family members.
Successful families have a common purpose and shared values that help them decide what matters to the family and the business. They create roadmaps that can guide their decision-making, and they rely on strong governance frameworks to help family members manage their differences in a way that preserves cohesion and does not jeopardize the enterprise’s future.
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