“Because that’s how we’ve always done it!”
I can’t tell you how many times I’ve heard struggling CEOs fall back on that statement to try to settle an argument about the company’s direction.
But in a family-run business, the tension between preserving the past and building a future can be far more complicated. When these companies reach major turning points, their CEOs often feel like both their business and their heritage are on the line. Lose touch with what made you special and successful in the first place, and you risk becoming generic. Cling too tightly to mom and dad’s way of doing things, and you risk getting stuck in the past while the competition blows right past you.
The best family-run businesses follow their values as they bridge this divide. Here are 4 tips for helping your family preserve its legacy while working towards a BIG tomorrow.
1. Understand what values are … and aren’t.
The mix of personal and professional dynamics in a family-run business often obscures the real purpose of values.
When we’re talking values, we’re not talking about where you want the company to be in five years (Vision). We’re also not talking about why you want the company to get to that peak (Mission). The reason we set those important topics aside is that in all but the most acrimonious situations, stakeholders usually agree on these big picture points. Everyone wants to hit the BIG five-year growth target. Everyone wants their product or service to make life a little easier for customers.
But the “How?” That’s where things can get touchy, especially when it comes to really tough decisions like discontinuing an underperforming legacy product or upgrading underperforming talent. That’s when opinions and tempers can start piling up in the conference room.
And that’s what values are for: answering “How?” How do we treat our customers? How do we expect our employees to interact with each other? How do we want to impact our community? How might grandpa have tackled this decision if he were making it 50 years ago?
The stronger your family’s values are intertwined with how you do business, the easier it will be to navigate turning points in ways that are consistent with your family’s history.
2. Tell your family’s story.
If your family-run business doesn’t have a clearly defined values statement, it’s time to put pen to paper. This document won’t just help key stakeholders stay aligned with what matters most to the company, it will also help non-family members at every level of the organization understand the legacy that they’re carrying on every single day in everything that they do.
Solicit input from all family stakeholders as you’re preparing to draft this document. Listening to what’s important to other members of your family can broaden your own perspective on what your company is and what you all hope it can achieve.
Perhaps you can filter your values into an easy-to-remember acronym. At CEO Coaching International, ours is PICNIC: we want to be Passionate about our work, Impact on our clients’ businesses and lives; show Courage when clients need to hear uncomfortable truths, work with No Drama and Integrity, and show Compassion for our clients.
Another strategy: one of our most culture-positive clients, TaskUs, created a list of seven core values that most of its 8,000 employees can recite by heart.
However, CEOs at family-run businesses should also consider the power of storytelling. Your family’s history is one of your business’ most valuable assets. Connecting the decades-long journey to a pivotal business moment can help your family members understand the thought process that you as CEO will use to plot a course forward.
3. Embrace healthy debate.
Most families can’t get through a holiday dinner without snapping at each other. If you’re expecting to manage the day-to-day pressures of running a family business — let alone make a major pivot — without ticking off your sister or butting heads with your uncle, forget it.
In both family and business, internal conflict isn’t just normal, it’s healthy. And a CEO who doesn’t consider conflicting information before making a decision isn’t putting himself in a position to make the best decision.
So have at it! As long as the debate remains respectful and the CEO can keep the conversation pointed in a productive direction, there’s nothing wrong with letting a little family passion into your conference room. Approach the problem from every possible angle. Let everyone who’s involved in this decision have a voice. Consider how following one family value might be leading you down a path that contradicts others. The more open and vigorous this debate is, the more commitment you’re going to get from family members once you make a decision.
And make no mistake about it: whether you’re overruling your older brother or killing your mom’s pet project, the ultimate decision in a family-run business is still the CEO’s. Not everyone will be happy with your choice. But you can be sure your family will respect you and your choices more if they feel heard.
4. Enjoy the process.
Seeing your values in action every day is one of the joys that makes the challenge of being a CEO worthwhile. When your values are inseparable from how your business operates, you feel more connected to your customers, to your employees, and to your long-term vision for what you want your company to be.
At a family-run business, that joy can take on an entirely different dimension. As an entrepreneur coach, I’ve seen the pride in a CEO’s face when the company surpasses a milestone that her parents only dreamed about. I’ve seen second and third-generation talent commit to carrying on the family’s legacy and work their way up through the ranks, embodying values they’ve inherited.
And, sure, I’ve seen plenty of devastating arguments as well. When you work with family, your family history is always in the room with you, the good and the bad, past glories and present struggles, the hopes and concerns for the future.
Remember: Amazon didn’t just keep selling books. Netflix didn’t just keep mailing DVDs. Zoom wasn’t content to be a niche business platform. And in 2019, your sales team did more business by racking up frequent flier miles and shaking hands than by making video calls and participating in webinars.
Strong companies, like strong families, keep changing and growing. Follow the values that unite your family and you’ll all keep making BIG happen together.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average revenue CAGR of 31% (2.6X the U.S. average) and an average EBITDA CAGR of 52.3% (more than 5X the U.S. average).
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