Shared Purpose: The Secret Ingredient in a Successful Family Business

15 Aug Shared Purpose: The Secret Ingredient in a Successful Family Business

In today’s crowded marketplace, purpose is a great way to get noticed. It differentiates you from your competitors. It communicates your values. And it creates meaning.

But when it comes to a family business, the purpose is only valuable if it’s a shared purpose.

• Why do you want to be in business together?
• How can you help your family through your business?
• What are your goals for your family and your business, and how do they intersect?

Shared Purpose: The Why

In short, shared purpose is a voluntary commitment by the family members to be in business together. It’s the set of goals, objectives and outcomes that the family is trying to achieve through being in business together.

Of course, some of these goals are financial. But many of them are unrelated to financial outcomes. Some of the most common goals include:

• Taking care of family assets and passing the business down through the generations
• Looking after the interests of all the stakeholders, including employees
• Keeping family members connected to each other
• Maintaining family harmony
• Providing career opportunities for family members
• Being involved in a business that the family feels passionately about
• Giving back to the local community by creating jobs or social engagement
• Maintaining a positive image of the family and the family business

Shared Purpose: The How

Articulating a shared purpose can be a challenge. Keep these considerations in mind as you develop your shared purpose:

1. Owner-driven or stakeholder-driven: In some organizations, the generation in charge defines and articulates the shared purpose. In others, everyone gets a chance to weigh in. There are benefits and drawbacks for each model. For example, it can be difficult to reach agreement when so many stakeholders are involved. On the other hand, when the younger generation doesn’t participate in the process, it may be challenging to engage that generation in the business when they’re ready.
2. Regular reevaluation: Circumstances change. People grow and have new experiences all the time. It’s important to reconsider your shared purpose regularly to ensure everyone buys in to each iteration. Whatever the reason, the priorities you had at the last juncture may no longer be relevant. If you can get everyone on board, you’ll ensure ongoing engagement among the stakeholders.
3. Good enough: As with anything, perfection is impossible to achieve. It’s important to strike a balance between the stakeholders’ personal aspirations and their loyalty to the business and family harmony. The trick is to articulate a purpose that everyone can live with, at least for the moment. It needs to be strong enough to drive engagement and loyalty, meaningful enough for everyone to support it and feel passionate about it.

The shared purpose should bring the family together. If your family business is struggling to articulate its shared purpose, an outside advisor can be invaluable to this process. Through asking questions to learn about the business and the family, the right advisor can help bring this shared purpose to life.

To learn more about succession planning for your family business, contact us.

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.