Developing family purpose can fire next gens’ imaginations, rally seniors, and unite all family members around fresh ideas
How important is purpose in a family business?
The notion of purpose – its usefulness and function in family-owned businesses – has come to the fore in recent years. In fact, purpose is often cited as a unifying power in business families.
When we set out to develop Family Learning Discovery, an analytical family enterprise tool, we devoted an entire section of the six-part survey to this intriguing concept.
Meaning in life
This applies as much to a young family operating a small business as it does to diversified business clans, even to wealthy groups in the throes of multigenerational wealth transfers.
Harnessing purpose as a kind of “virtual engine” can be remarkably effective in helping enterprising families transmit their values from generation to generation, sustain their entrepreneurial spirit, even diversify their enterprises over time.
But just what is family purpose? We define it as “an enduring commitment, shared by multiple family members, to actively engage in making a meaningful difference in some aspect of the world beyond the family.”
Powerful words. Yet what do they mean when a family finds itself at a crossroads? Say, when facing a liquidity event that touches family, ownership and the business in a significant way.
“Purpose is the glue that binds an entrepreneurial family together,” says Family Enterprise Foundation President and CEO Bill Brushett. “It can commit a family to learn together, resolve problems together, and move forward in unity, where Next Gens are valued for their fresh ideas and seniors for their guiding presence.”
Ultimately, having a shared purpose should mean the family is all on the same page – operationally, emotionally, and ready to move in the same direction. If a family’s purpose is strong, scope for conflict should be low, right?
A commitment to make a difference beyond family
Richard Joynt, a family office executive at Ocorian, notes that while formal mechanisms, such as family constitutions and charters, can help clarify purpose, families who articulate their “values” relative to the outside world, may have an edge over those that don’t.
“The hope is that if the family have all their values aligned, they will understand the reasons for financial decisions and will have a greater sense of unity and purpose,” he says
The value of values
When we think about family business best practices, we tend to hear a lot about transmitting financial assets down generational lines and less about transmitting values and purpose, which in itself has intangible value.
Transmitting purpose does not mean the matriarch or patriarch simply hands off the torch to progeny so they can slavishly carry on the business in the same manner and vision. It means thinking about (and rethinking) purpose with family members on an ongoing basis.
Decide whether your family is all about running a great business or, alternatively, about making a big impact on the economy. Maybe your family purpose is about providing a customer experience that reflects your family values?
Defining and transmitting purpose is every enterprising family’s golden opportunity to engage and inspire the rising generation – so they too can shape the family’s future - while at the same time reassuring and reinvigorating the generation in charge.
In his book Enterprising Families, Antoine Mayaud makes a convincing case for purpose as both a creator of value and unifying force in family businesses.
He relates the story of France’s Mulliez family, who control one of the world’s biggest retail conglomerates and whose 800-plus family shareholders ask themselves every seven years the following probing question: “Why, for what and for whom do we want to stay together in the 20 years to come?”
NextGen lynchpins
This question is as fascinating as it is provocative because, while it puts the onus on all generations to think and act, it is a clarion call for next gens to move into the driver’s seat with a deepened sense of shared goals and encouragement from their elders.
When we sought to define family purpose, we grappled with a definition that was neither overly narrow, so as to exclude certain families’ sensibilities, nor overly broad, so as to dilute its meaning.
The “commitment” and “engaging” components are key because isn’t that what defines a healthy, loving family – a unit that remains self-devoted and actively works at it for the betterment of all?
Again, purpose in a family business is what your family makes it. It could be a focus on attaching great importance to building a sustainable business. It might be about running a business that creates fantastic jobs. Or anchoring the business in philanthropic initiatives.
Family learning is a powerful basis to discover, develop and invigorate family purpose, which in turn can help sustain an enterprise over many generations through its unifying properties. We will be exploring this intriguing topic in-depth at Families Summit of Minds, November 12-13 in Montreal – join us!
What’s your family’s purpose? Discover it here.
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About Family Enterprise Foundation
We are associated with Family Enterprise Canada, the national community for family business in Canada. Our goal is to ensure the long-term success and continuity of enterprising families and their family enterprises, across generations! Family Enterprise Canada empowers business families and Family Enterprise Advisors to thrive by providing a dynamic peer community, family-focused learning, relevant insights, a family enterprise specific designation and - together with our Foundation - a voice for all. Learn more at familyenterprise.ca