by Dennis T. Jaffe, Ph.D.
As a family crosses generations, new adults and married-in family members are faced with being partners in family enterprises that they respect and benefit from, but know very little about. They are a family, but the question that faces them is “Why should we remain as business partners for the next generation?”
The dangers facing a family business as it enters a new generation are many. Family members may drift apart or lack the motivation or energy to dedicate to the business. The business may be neglected as family members scramble to “harvest” what they feel are their just rewards for their success and forget to invest in the future of the business. The business may be focused on maintaining the status quo, while competition begins to eat at margins, eventually threatening the whole.
Mission, Meaning and Alignment:
To overcome these challenges, the family must commit to working together to renew the business. There are many actions they must take, but the first is to define why they are together, why they are in business and what this means to them. This begins by redefining what they are doing together, in such a way that the next generation is motivated, even inspired, to reconnect with each other. Also, the formulation of a mission is a means to get everyone into alignment and agreement with what is being done. Each new generation has to make their own commitment to shared family activities and the business.
The family mission is a statement of what the family, and the family business, stands for, values and why they are in business together. It represents the outcome, of a sustained, collaborative, cross-generational process of engagement by the family. The mission should be revisited and refined at least once every generation, and also when there are major changes in the family or the business environment.
It is not cast in stone, but rather, building on the legacy of the founders, it defines the commitment of the next generation to work together as partners. While it builds on the original legacy, vision and values of the founders, each generation must recast the mission in order to decide whether and how to remain together as partners.
What does a mission do for a family business?
Why do you need a mission? The quick answer is because in the family, and the business, there are many new people—in the family those who grow up and who marry in—and in the business new employees. They need to know something about what they are doing and why they are doing it.
A mission inspires, aligns and guides people in making choices about what to do and not to do. They are broader and more flexible than rules, and they differ in that they work by inspiring and motivating people to action.
What are the elements of a mission:
The mission is a two or three paragraph statement which answer the following questions, briefly and in an uplifting manner:
Who we are as a family (and as a family business)…
What we do together…
Why we do it…
To achieve that end or goal…
How we do this, what values we share.
Example of a family mission statement:
We are a family committed to our members and descendants being responsible, productive, well-educated citizens who practice the work ethic and make constructive contributions in the local community and the world at large. Each member is encouraged to develop and use self-supporting, marketable skills that contribute to the enhancement of their own self-esteem and independence. We urge family members to adopt lifestyles that are healthy, personally satisfying and at such a profile as to preserve the maximum level of family privacy, given the public nature of our business. We urge the continuation of the orientation of prudent, careful investing with a long-term view of outcomes so all our descendants may enjoy the benefits of the foundation they built.
How is it created:
A mission statement is not created by a single person, such as the family business leader or founder. Rather, it is built jointly by a representative group of family members, representing both generations. It should not be thought of as a product, but rather, a process of defining the nature of their shared enterprise, and family connection.
If a family is small, moving from first to second generation, everyone should participate in creating the mission. This process will begin with the founder/family leaders sharing their values and guiding purpose, but it will then be developed by the succeeding family members to fit their own values and desires for the future. If the family is larger, containing several households and maybe entering a third generation, it may be that one or two small groups work as agents for the family, sharing their drafts as they develop.
A family may have one mission statement that covers the family mission and the business mission, or it may have two. They are different, but they exist in parallel and often share overall values and a social mission that is expressed in both the business and how they work as a family.