One of the most important challenges family businesses face is the need to create a shared vision and set of goals that align with the interests of all family members. This process can be more complex than in non-family businesses due to emotional factors. Still, it is critical for creating transgenerational value and preventing the fragmentation of wealth. In this article, we explore the importance of setting family goals and how to achieve them effectively based on family business research insights.
The Importance of Family Goals
A family’s vision or shared set of goals provides the foundation for a strong family entity. A shared vision answers the “Why?” question and helps build non-financial utility, such as emotional attachment to assets (Astrachan & Jaskiewicz, 2008).
Even in families without shared business interests, a unifying vision can be the glue that holds them together (De Groot, Mihalache & Elfring, 2022). In family businesses, this vision helps allocate resources and ensures alignment between family and business goals (Chrisman, Chua & Zahra, 2003; Kammerlander et al., 2015).
Goal-setting also aligns family logic with business logic. If misaligned, criticism and internal conflict can emerge. The process is inherently more complex in family settings due to emotional dynamics (Kotlar & De Massis, 2013).
A shared set of goals reinforces a transgenerational orientation and reduces the risk of individual family members pursuing self-interested objectives (Suess-Reyes, 2017). However, as ownership widens across generations, goal diversity tends to increase, which can lead to incompatible visions (Kotlar & De Massis, 2013).
Takeaway for Families:
- Start with a shared conversation about what truly matters to each family member.
- Developing a family vision early can help unify diverse interests and create an emotional investment in long-term goals.
- Use this shared purpose to anchor decision-making and maintain cohesion, even as the family grows.
The Process of Setting Family Goals
Goal-setting should not be a one-off activity. It must be revisited regularly so that families become proficient in the process (Levesque & Subramanian, 2022). Experienced outside advisors can help facilitate discussions and address emotional issues (Cabrera-Suárez et al., 2001).
All family members should be involved in the process, ideally facilitated by the dominant coalition (Chua, Chrisman & Sharma, 1999). The goals should be clearly defined, measurable, and aligned with the family’s available resources and capabilities (Habbershon, Nordqvist & Zellweger, 2010). Synchronisation between family goals and business strategy is essential (Lambrecht & Uhlaner, 2005).
Once defined, a governance structure should support the achievement of those goals. It should be minimally intrusive yet effective. Participation in governance should be voluntary (De Groot, Mihalache & Elfring, 2022).
Takeaway for Families:
- Make goal-setting a recurring, inclusive process—ideally led by a core leadership group but shaped by input from all.
- Involve advisors who can facilitate conversations and ensure objectives are realistic, measurable, and supported by the right resources.
- Revisit and adjust goals regularly to stay aligned with changing circumstances.
Managing Diverging Goals
A key challenge in family goal-setting is dealing with diverging or incompatible visions. If unmanaged, these differences can lead to goal-driven fragmentation (Kotlar & De Massis, 2013).
Social interaction plays a crucial role in resolving these differences, as compromise is needed, without falling into groupthink or avoiding necessary conflict (Bettinelli et al., 2022).
When compromise is not possible or goal divergence becomes entrenched, families may face deadlock. In such cases, governance participation should remain voluntary (De Groot, Mihalache & Elfring, 2022). In rare situations, an exit from the family structure may need to be considered (Jaffe & Lane, 2004). To reduce resistance, governance frameworks must strike a balance between accountability and flexibility (Vazquez & Rocha, 2018).
Takeaway for Families:
- Create an open, structured dialogue to surface and address differences in perspective early.
- Use neutral facilitators to guide these conversations when needed. If compromise is not possible, ensure there are clear and respectful exit options.
- Keep governance flexible enough to allow for disagreement without derailing progress.
Governance: Aligning Resources and Capabilities
Governance structures align the goal-planning process with execution. These structures must balance clarity and adaptability—too rigid, and they hinder decision-making; too loose, and they lack accountability (Kammerlander et al., 2015).
Effective governance connects goals with available family resources. Without the proper mobilisation of capabilities, families risk falling short of expectations, resulting in frustration or disengagement (Kammerlander et al., 2015). A realistic assessment of resources is a necessary step before setting goals.
Family governance also strengthens transgenerational continuity and promotes open communication. However, governance frameworks can be undermined by agency issues or perceived inequity, which may lead to internal politicking and diluted focus (Lambrecht & Uhlaner, 2005; Kidwell et al., 2012).
Takeaway for Families:
- Before setting goals, assess your family’s collective capabilities and resource availability.
- Design governance structures that support collaboration while keeping things streamlined.
- Regularly review whether these structures are helping or hindering your goals, and be open to adjusting them as the family and business evolve.
Conclusion
Setting family goals is essential for building a strong family entity and ensuring transgenerational value. The process should involve all family members, be supported by experienced advisors, and be facilitated by the family’s leadership. Once goals are clearly defined, appropriate governance structures should be implemented to ensure they are achieved.
A well-structured, inclusive approach to goal-setting helps families align their values, avoid internal fragmentation, and sustain shared wealth and purpose across generations.
References:
Astrachan, J.H. and Jaskiewicz, P., (2008). Emotional returns and emotional costs in privately held family businesses: Advancing traditional business valuation. Family Business Review, 21(2), pp.139–149. Available at:
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