Exceptional families that build lasting legacies and successful enterprises share a common trait: a well-defined strategy grounded in core values and continuous improvement. We are in the process of creating a Family Office strategising tool, the Family Council Canvas, which aims to align on fundamental aspects, from values to advisor effectiveness. This article explores how these families craft their strategies by addressing essential questions within the Council Cards categories, showcasing best practices in each area.
Values as the Foundation of Success
Values serve as the moral and ethical foundation for family businesses, influencing their vision and mission. Incorporating values into everyday operations and decision-making processes helps maintain a cohesive and resilient organisational culture. Studies have shown that transparent communication and formalising core values in the company’s mission statement are effective strategies for reinforcing these values. (Miller & Le Breton-Miller, 2005; Gómez-Mejía et al., 2007; Ward, 2011; Heritage Trust Company, 2020).
Exceptional families start by clearly defining and upholding their core values. These values serve as guiding principles in every decision and action, providing a moral compass and a sense of purpose. Research indicates that family businesses with strong core values outperform their counterparts, maintain greater stability across generations, and adapt more effectively to changing market dynamics. Key values such as integrity, long-term vision, and respect for employees are particularly influential in shaping a positive organisational culture and driving sustainable growth (Miller & Le Breton-Miller, 2005; Gómez-Mejía et al., 2007).
The challenge lies not in adopting a pre-packaged set of “tried and tested” family values that lack a unique connection to the family. This process should allow ample time for open discussions within the family to establish their own distinct set of values. By investing in these discussions, the family can create a value system that truly reflects their unique identity and strengthens their bond.
Upon conducting a quick internet search, the following commonly held “standard” family values emerge:
- Respect: Treating each family member with kindness, understanding, and consideration.
- Honesty: Prioritizing truthfulness and transparency in both communication and actions.
- Love: Demonstrating affection, care, and support for one another.
- Responsibility: Taking ownership of one’s actions and fulfilling obligations.
- Unity: Collaborating as a team and supporting each other through challenges.
While these values are not inherently wrong or harmful, they should not be rigidly adhered to without considering the unique needs and communication style of each family. It is essential to reword and adapt these values to truly resonate with the dynamics and preferences of the family.
It can be beneficial to discuss family values with a trusted advisor who can provide an objective perspective while simultaneously possessing a deep understanding of the family dynamics. Such an advisor can offer valuable insights and guidance based on their outsider’s viewpoint.
Defining and Upholding Core Values
By identifying and consistently reinforcing a set of family values, exceptional families ensure their business operations and interpersonal relationships align with their foundational beliefs. This alignment is crucial for long-term success and cohesion. Questions like, “What are the advantages of having family values?” and “What is one value you cannot live without?” encourage families to reflect on how these values foster unity, trust, and resilience.
Reinvigorating Values
Keeping family values relevant and impactful is a hallmark of successful families. They regularly evaluate and reinforce their values through family meetings, workshops, and integrating values into everyday activities. Questions like, “How do you reinvigorate your values and keep them purposeful?” and “What are your current set of family values?” prompt ongoing reflection and adaptation. Exceptional families understand that values need to evolve with changing circumstances and actively engage all members in this process to maintain a strong sense of identity and purpose.
The Family Council Canvas is designed to keep a detailed record of reflections and discussions to ensure continuity and reference for future planning. This structured approach allows you to revisit your Values periodically to assess their relevance and your level of alignment with them. Regular reviews help maintain alignment with your family’s goals and values, ensuring that the strategy remains relevant and effective.
Conclusion
By reflecting on essential questions regarding family values families can create a strong foundation based on shared values, fostering unity and resilience that support both personal fulfillment and business success. If you would like to explore the crucial role values play in family business strategy read our previous article titled “Adapting to Trends: Where Family Offices Miss the Mark“.
References:
Gómez-Mejía, L.R., Haynes, K.T., Núñez-Nickel, M., Jacobson, K.J.L. and Moyano-Fuentes, J., (2007). Socioemotional Wealth and Business Risks in Family-controlled Firms: Evidence from Spanish Olive Oil Mills. Administrative Science Quarterly, 52(1), pp.106-137.
Heritage Trust Company, (2020). The Importance of Clarifying Values, Vision, and Mission for Business Families. [online] Available at: https://heritagetrustcompany.ca/articles/importance-of-clarifying-values-vision-and-mission-for-business-families/ [Accessed 4 Aug. 2024].
Miller, D. and Le Breton-Miller, I., (2005). Managing for the Long Run: Lessons in Competitive Advantage from Great Family Businesses. Boston: Harvard Business School Press.
Ward, J.L., (2011). Keeping the Family Business Healthy: How to Plan for Continuing Growth, Profitability, and Family Leadership. New York: Palgrave Macmillan.
