Values that families bring to the businesses they own is a frequent topic in The Family Business Advisor. We believe that the family’s values and culture,inculcated in the business by executives steeped in their family’s ethos, can be a tremendous competitive advantage. And family owners, while they may not be employed in the business, can be more enthusiastic and committed to their family’s living asset if they see it as representative of and guided by their cherished values. Ownership care and commitment are among family businesses’ great competitive advantages.
Thomas A. Stewart wrote in Fortune (July 8, 1996) about Company Values That Add Value and makes some points worth pondering in the context of family business. Stewart’s points (in quotation marks) are followed by our commentary.
Human beings want to pledge allegiance to something. The desire to belong is a foundation value, underlying all others. Family businesses, especially for family members but for others as well, can provide a powerful opportunity to fulfill human desires to belong and commit — and can produce tenaciously motivated team members.
The real locus of learning, in corporations and in life, is a community of practice — an informal group of people who have a shared interest in a subject. By overlapping the boundaries of corporate, familial, financial, professional and other communities, family businesses can stimulate more profound, focused, applied, meaningful learning and its implementation. Once again, the building and sharing of knowledge through a community of practice defined in part by one’s family business can provide a powerful competitive advantage.
You hang your hat at Citicorp, McKinsey or Whirlpool. But where is your heart? Stewart suggests that today, deepest loyalty is to one’s profession, not one’s company. In family businesses, employees’ and owners’ hats and hearts are more likely to be in the same place.
The only way to lead a flat, empowered organization is through values. True enough in business, but even truer in second, third or fourth generation families who own businesses. With little hierarchy (siblings or cousins are equal) and great empowerment, common values as a basis of shared vision are crucial to the leadership of the family.
Values must help me make decisions every day, wherever I am. As a business owning family grows and spreads out, family members disperse both geographically and philosophically. Keeping them on the same page requires not only that good information be communicated in a timely fashion, but also that it is perceived and evaluated from a consistent perspective afforded only by shared values.
Stewart’s thoughts were directed toward businesses in general, but have special application and importance for family businesses.