Make it your business to develop a family mission statement
So what are you in business for anyway? Why are you putting all of this blood, sweat and tears, not to mention the long hours, into something that may not survive your children’s meddling? Most family business owners don’t have very good answers to these questions.
In this article, we’ll look at creating profitable business meetings and a mission statement so everyone is clear where your business is headed.
If you ask the heirs what they are doing to plan for succession, they usually say, “Well, it’s really none of my business.” If you talk to Dad and ask him about transitioning leadership, he’ll say, “Well, when the kids show me they are ready.”
So the parent is waiting for the kids to show leadership and the kids are waiting for the parent to show leadership. It only means they’ll all go down together because they have been too focused on their rights.
Family meetings can help move the focus from personal issues to the longer-term goals of the business. And part of that long-term thinking is to ask and answer the difficult questions that family business owners find difficult to face.
The place to start is at the end. What’s the purpose of the business? What’s the purpose of the asset? Why are we doing this?
If you want to help your family business, think about what the business will look like two generations out, not just today. If siblings are willing to think about their children and their grandchildren, they are less likely to take a hard-line stance on their own personal rights.
Here are a few hints on how to hold a successful family business meeting. Try to find three or four hours at a nice resort and spend the weekend with a trusted advisor. Walk through the best practices documents and answer these questions:
- What steps have you taken to ensure the continued success of your business?
- What plans have you made for your estate and the tax payable on the business?
- Who is going to carry on the business when you leave?
- What changes will be made in the current operations of your business in the next year?
Leon A. Danco, Ph.D. of the Center for Family Business in Cleveland, Ohio, has created the 12 Commandments for business owners. His ideas provide good direction in thinking about the future of your family business:
- Thou Shalt Share They Dream With Thy Family.
- Thou Shalt Inform Thy Managers and Employees, “This Company Will Continue Forever.”
- Thou Shalt Develop a Workable Organization and Make It Visible on a Chart.
- Thou Shalt Continue to Improve Thy Management Knowledge, That of Thy Managers and That of Thy Family.
- Thou Shalt Institute an Orthodox Accounting System and Make Available the Data Therefrom to Thy Managers, Advisors and Directors.
- Thou Shalt Develop a Council of Competent Advisors.
- Thou Shalt Submit Thyself to the Review of a Board of Competent Outside Directors.
- Thou Shalt Choose Thy Successor(s).
- Thou Shalt Be Responsible That Thy Successor(s) Be Well Taught.
- Thou Shalt Retire and Install Thy Successor(s) With Thy Powers Within Thy Lifetime.
- Thou Canst Not Take It With Thee – So Settle Thy Estate Plans – Now.
- Thou Shalt Apportion Thy Time to See That These Commandments Be Kept.
Finding the answers to the tough questions about the future of your business often begins inside. If you make the decision to become responsible, to take initiative, to be creative, then the most primary decision facing you is what is your life about? As author Steven Covey has said, “Begin with the end in mind.” That means creating your family mission statement.
A mission statement doesn’t have to become a complex, formal document. It can be said in words or a phrase or something entirely creative or even a symbol. A mission statement is not a to-do list, it’s meant to be a literal constitution for your family life. Write down all the things that are important to you as a family and then boil them down into a statement.
“The Seven Habits of Highly Effective Families” by Stephen Covey is a tremendous resource for developing a family mission statement for your family business.
By taking time to develop a proper succession plan, a best practices document, an outside board of directors, profitable family meetings and a mission statement, you can help ensure the successful transition of your family business to your heirs. If you take these simple steps, you, your family and your family business will be a success, now and well into the future.
