By: Alexandra Sharpe
As a consultant to family businesses and wealthy families around the world, my mission is to help families make the most of their assets, both their business assets and their human or "family assets." The starting point for this is often posing the question "what is your family mission?" And I would challenge all families to think in this way and ask themselves the same question.
Whilst wealthy families may have more financial resources, all families have a wealth of non-financial assets: relationships, trust and accumulated wisdom for example. And much of what I have learnt about family businesses can be applied by ordinary families everywhere to enrich their lives.
Interestingly, because of the overlap between family and business dimensions, a wealthy family's mission is often focused as much on non-commercial drivers as on achieving good returns. Family businesses tend to have an inbuilt "social purpose" because they support a family and its activities. And of course a family is often about relationships, education and support more than anything else, the perfect ingredients for pioneering positive change in the world. A family's mission may include objectives about business, their own relationships with each other but also about changes they want to affect in their community or society at large.
In fact, most families I come across with business interests above a certain size consider their impact on their community and some take this further and make the most amazing commitments to making a difference in the world. You just need to look at Bill and Melinda Gates for a very high profile example of this.
There is a tendency however for families to be blind to the possibility of taking a more purposeful path in this respect and defining exactly what they want to achieve as a family, what difference they want to make. Family dynamics can be so tricky or the risk of damaging a relationship can seem so severe that taking a strategic approach to these sorts of matters is avoided, especially when commercial priorities seem so urgent and pressing.
In fact, from my experience, the potential within a family business system is enormous yet very often their unique resources are left untapped. They may leave important questions unanswered because they seem too difficult, too different from the tone of their typical interactions. Questions like "why have we decided to be bound together in business as well as in family"? "What opportunities does being together in business afford us, not available to other families and other businesses?" and "who do we want to be as a family?"
Business families have the potential to make collective decisions in the name of a common goal, backed up with financial resources around what difference they want to make in the world, what legacy they want to leave. An extraordinary proposition. However, it is precisely the family or personal dimension that both creates this hugely exciting possibility and at the same time holds them back. A pattern I see time and time again is that families allow "difficult conversations" to stand in the way.
Those families who do elect to harness their resources to the greatest affect tend to have the following two features in common:
- They recognise the special opportunities and challenges created by a system made up of both a family and business or financial assets; and
- They deal with these opportunities and challenges in a proactive and intentional way, including by having what may at first feel like uncomfortable conversations
Recognizing the special challenges can mean acknowledging that family businesses can be difficult systems to be a part of - boardroom discussions may be reflections of arguments in the nursery, dads can be "dad" one moment, "boss" the next and of course you can't fire your family! However recognizing the special opportunities means acknowledging that family commitment and accumulated wisdom passed through the generations can engender trust and loyalty and a unique culture within which remarkable things can be achieved.
It is with this backdrop that I ask families in business, linked by blood as well as finances, to define their purpose: what is their family mission? For some families it really is purely a financial measure and that's fine- how can we create the most commercial success from a bottom line perspective? For others it is about honor and heritage -- how can we ensure our family reputation is upheld in society?
For others it is about impact -- how can we use our privileged position to make a difference in the world? To eradicate poverty? To contribute to the arts? For most it is a mixture of things which take time to identify, articulate and then action. However, exploring and being open to the possibilities is the first step. And as I said, these principles apply to all families everywhere no matter their size or background. So, when you get home today, why not start an unusual conversation around the dinner table: "What is our family mission?"
About Alexandra Sharpe
Alexandra Sharpe is a Partner at Peter Leach & Partners LLP, a boutique advisory firm that supports and advises business and financial families. Working with some of the most influential families around the world, Alex supports and advises them through generational transitions and on family governance issues.
With a degree in Philosophy, her professional qualification as a Chartered Accountant and a Masters in Organisational and Social Psychology from the London School of Economics, Alex is highly skilled at addressing the complex relationship and business challenges faced by entrepreneurial families. In particular, Alex's strength is in designing inclusive processes that allow families to define their goals and in working alongside her client families to establish the structures, processes and relationships that will advance their efforts to achieve success.
Alex is especially experienced in working with international families and recent assignments include projects throughout Europe, the Middle East and India. Clients particularly value her warmth, sensitivity and determination that enable her to navigate and resolve the difficulties that can arise when family relationships and business priorities have to be integrated.