Crafting a legacy is an important part of building a successful multigenerational family business. Why does this family business exist and what are its goals? At FINH we have a globally proven tool, “The Pulse”, which helps our clients crystallize their vision, mission and values. Managing those sensitive, but essential conversations to uncover the “why” is what FINH specialize in. David Harland – Family Business Advisor
When you meet someone new, how do you describe your business? If you’re like most people, you might talk about what you do or how you do it. Maybe you’ll mention how you do it better than your competitors. However, do you talk about the “why” of your business? Can you answer the question: What is the purpose behind my business?
While the concept of a purpose-driven business is certainly not new, I recently came across a TEDx Talk from U.S.-based author and speaker Simon Sinek that put an interesting twist on the idea. The video is called “How Great Leaders Inspire Action” and it’s well worth the eighteen minutes out of your day to watch. Sinek’s basic premise is that leaders who “Start With Why” (incidentally, the title of his book,) have better personal, professional, and business outcomes.
Why? Understanding why your organization exists and being able to communicate that purpose to others creates a much more compelling story. Most firms simply focus on the “what” and the “how” of what they do, missing the opportunity to show off the purpose behind the business.
There’s a solid business case for starting from why: it differentiates your business from your competitors by showcasing what makes you unique. It helps employees, partners, and customers understand why you do what you do. It focuses your attention on the activities that truly create value and move your business forward. By integrating your purpose into your mission statement and marketing materials, you are able to make a better case for why customers should do business with you.
In his talk, Sinek points to Apple as a company that has seen enormous success by putting “why” at the core of its message. Apple isn’t just another company that produces technology products. Their purpose is to change the world through simple, functional, beautiful design. You have only to look at Apple’s share price over time to see the effect this powerful message and brilliant execution have on the company’s bottom line.
I think that this is a phenomenally important idea for family businesses because we serve multiple purposes: our organizations exist to help our customers and to create a better future for our families. In order to successfully integrate these dual mandates, family business leaders have to understand the core purpose behind everything they do.
Take a moment to think about why you get up every day and go to work. Look past the need to earn a living or turn a profit and go back to the beginning. What’s the ground truth behind your business? Who do you serve and why do you do it better than anyone else? If you’re having trouble visualising your core purpose, think about the problems your company solves for your customers and why they choose to do business with you.
It’s also helpful to consider the story behind the founding of your company. Why was your company founded? Your unique history is one of the biggest differentiators between you and corporate competitors and it’s important to integrate that into the way you describe your business to employees, clients, and other key stakeholders.
I think that it’s also essential to apply this concept to your personal life. Ask yourself: What drives you as a person? How do you want to be remembered when you’re gone? These are not always easy questions to answer, particularly when you’re caught up in the daily grind of running a company. However, knowing these answers can help you avoid burnout by keeping your focus on the things that matter most in your life.
As family business advisors, one of the things we stress to our clients is the importance of a developing a long-term vision for your family. That vision should be centred on a purpose for the human, intellectual, and financial capital of your family. Our experience shows, and research supports, that multi-generational families that develop shared values and a purpose for their capital are more likely to thrive during key family business transitions.
It’s a sad reality that many generational transitions fail. Whether it’s lack of planning, unprepared heirs, or disputes between members of the next generation, many families fail to successfully pass their wealth on to their children. I strongly believe that sitting down together and exploring the “why” behind your family is one of the best ways to ensure a successful long-term legacy.
Looking to create your family business legacy? Contact FINH on 07 3229 7333