Is there value in taking the time to develop core values for a family business? Research consistently supports the benefit in having a set of core values that provides a “true north” for a business to make decisions and reinforce the behaviours that are required to make the family and the family business successful.
Conflict is the Norm
Conflict in families is the rule, not the exception. By aligning to a common set of values and a unifying vision for the family and business, conflict can be minimized. The more clearly understood and compelling the values, the stronger the foundation of the business and the family. When business owning families purposefully develop and live their core values, both the family and the business gain a competitive advantage allowing them to prosper for generations to come.
Within the family context, values originate with and reflect the beliefs and behaviours of the business founder. As the family expands, the challenge and opportunity are to use these values to engage family members in a renewal and recommitment process from one generation to the next. It is also an opportunity to proactively define and drive your values as opposed to letting things develop organically.
What are Values?
Values reflect shared beliefs, experiences and goals. They impact every decision, action and interaction. They help to clarify why the family should stay together as a family and as business owners and establish standards of behaviour which help family members understand what to expect from each other, including how family members will contribute to the business.
An Example of How a Value Can Minimize Conflict – Stewardship
Let’s take a look at how the value of stewardship can be uniquely defined and guide the family and the business.
The core premise of stewardship is that each successive generation will leave the family business in a stronger position than the previous generation – shifting the focus from the ‘here and now’ to the longer term and from “what can I get?” to “what can I do?” – resulting in increased accountability. In other words, the value of stewardship can minimize conflict by aligning family members to a long-term family and business vision, clarifying roles and responsibilities and confirming commitment and has been shown to be a key success factor for business continuity.
Family harmony will be negatively impacted, however, if a family that says that stewardship is a core family value, does not taken the time to define it and describe the behaviours that reflect it in practice.
Without this clarity and alignment, the Founder may believe the best way to make the business successful is to ensure a meritocracy when hiring and promoting family members. For the Founder this may mean – having a university degree and external work experience as a prerequisite for employment consideration. The Founder may expect that family members start in positions which are commensurate to their skill and experience levels and that promotions be merit based. On the other hand, some family members may believe that stewardship means that family members should receive preferential consideration for roles and promotions as a mechanism to support business and family continuity, regardless of skill or performance.
Unless the family works through a process to define what stewardship means to them, a mismatch can result between values and behaviours leading to reduced trust, resentment, disappointment and disengagement.
As evidenced in the above example, conflict can arise when standards of behaviour are not established or clearly understood. Everyone will have a different view of what family values mean and, as such, the process of developing values should not be rushed, but used as an opportunity for family members learn to listen and understand different perspectives – creating a critical foundation of trust and strengthening family harmony.
Watch for our upcoming blog on “Five Practical Practices to Defining Family Business Values” that details practical suggestions for developing meaningful values.
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