Who will lead your family? The dynamics of a family in business and/or with a foundation or wealth transition take this question to a deeper level. On a family level, the senior generation occupies the natural position of leaders and mentors. However, add a business, foundation or wealth transition element to the equation and the relationships are subject to forces that seem insurmountable. While I’m focusing on families in business, the same advice may be employed for families with foundations and those considering wealth transition.
Are you as a senior family member hesitant to talk about the future of family and business for fear of conflict? You are not alone. You can benefit from knowing that other families have encountered the same fear and mentored younger generations with the result of a stronger family and business.
On a family level, the senior generation occupies a natural position of leaders and mentors. However, add a business, foundation, or wealth transition element to the equation and the relationships are subject to forces that seem insurmountable.
The culture today speaks to individual fulfillment. Such statements as “You can be anything you want to be,” or “Your individual happiness is the most important element in your life” ignore an obvious question that must be answered: What is your purpose in life? Failing to define purpose results in a discussion of individual success or happiness in a vacuum, producing little value.
Have you, as the senior generation, documented your purpose in life? Have you had family discussions about what really matters in life? A Christian approach deals with what values and purposes truly matter. Scriptures talk about glory. Glory is a term that defines what matters. Non-Christians talk about glory without understanding its true meaning. Everyone makes decisions every day about what matters, what purpose or value is applied in a variety of situations.
A family business that has a murky view of the purpose of wealth, business and family will struggle in planning for the future. My first advice to senior generations is to go through the challenging process of documenting what matters to them. This process can serve as a basis for a family mission statement. Non-family businesses deal with this issue also. In my experience as an attorney helping establish new corporations, there was a line on every state corporation filing asking for the corporation’s purpose. I have never seen, in all of the filings I participated in or viewed, the purpose statement of “making as much money as possible.” Making money is part of what a corporation does, but that production flows from the corporation’s meeting some need — by producing products or providing services that customers view as valuable and needed. That is the corporate purpose.
Families in business weave into the business values the family desires to perpetuate. The values need to last forever to really matter. A belief in the God of Scripture inherently places values in the realm of lasting beyond death, especially death of the senior generation. It is not the value that is important; it is the source of the value.
Bringing a third party in to help with these family discussions is usually invaluable. I always challenge families in business that are reluctant to hire an adviser for family meetings to try it once. They will immediately see the dynamics of the meeting change. This mediation is often very positive if the family has had difficulty moving beyond the emotional baggage of family into concrete, substantive discussions about issues that can strengthen the family and business.
The senior generation can strengthen the family and family business by outlining for younger generations skill sets and educational objectives for specific positions in the business. This process prevents younger generations from thinking that, having made no preparations, they automatically have a job in the family business. Another benefit is that the process allows the senior generation to start meaningful conversations with the younger generations about the future. The goal is to direct the conversation toward specific educational needs and preparation. If the younger generation is not willing or able to meet the requirements of work in the family business, the situation should be addressed sooner rather than later. The worst scenario is for the younger generations to think they deserve positions in the family business by simply being family. The ramifications of such a scenario negatively impact all members of the family and the success of the business.
In summary, here are some important steps for you as the senior generation to take:
- What is your purpose? What is the mission of the family? What is the purpose of wealth? What is the purpose of the family business?
- Establish educational objectives for positions in the family business.
- Begin thinking about transition, succession of the business and how it will be developed and communicated. A closed plan that is not communicated allowing time for you to mentor the younger generation has a high likelihood of causing irreparable fracturing of your family.
Grant Goodvin is a friend of the Waldron Center who founded Family Legacy Consultant Group in Wichita, KS.