12 Feb START THE CONVERSATION
by: Mike Schmitt
Aligning Family Goals with Business Goals for Long-Term Growth
Subject: Strengthening Your Family Enterprise: Aligning Family and Business Goals
As the next generation comes of age, many families find themselves grappling with how to integrate personal aspirations with business objectives. For a family enterprise to thrive across generations, alignment between family goals and business goals is crucial. Without this, tensions can arise, and the long-term success of both the business and the family legacy can be put at risk.
In this newsletter, we explore practical strategies for fostering open conversations, developing a shared vision, and ensuring that family values drive business success.
1. Understanding the Importance of Alignment
Family enterprises are unique because they intertwine personal relationships with professional responsibilities. Harvard Business School’s Three-Circle Model of Family Business illustrates this well, showing the overlapping interests of:
- Family (relationships, values, and legacy)
- Business (growth, profitability, and operations)
- Ownership (decision-making, governance, and financial equity)
Balancing these three areas requires intentional dialogue and strategic planning. When family members feel heard and included, they are more likely to stay engaged, reducing the risk of misalignment and potential conflict.
2. Starting the Conversation: How to Talk About the Future
For many families, the hardest part is knowing how to begin the conversation. Here are some ways to start:
* Host a Family Meeting: Create a structured yet informal setting where each member, including the younger generation, can share their personal and professional aspirations.
* Use an Outside Facilitator: Bringing in a neutral third party, such as a business advisor or family governance expert, can help ensure productive discussions.
* Focus on Shared Values: Instead of diving straight into business planning, start by identifying the core values that unite your family. What impact do you want to have as a family and as a business?
* Ask Open-Ended Questions: Encourage family members to express their thoughts with questions like:
- “What does success look like for our family and business in 10 years?”
- “How do you see yourself contributing to the family enterprise?”
- “What concerns or hopes do you have for the future of the business?”
* Create a 100-Year Vision Statement: This exercise, inspired by strategic business planning, encourages families to think long-term about their enterprise’s legacy.
Be Open to Contrary Ideas: What if some family members do not want to participate in the Family Business? What if none of them do? What if they all want to participate in the business? These questions are all legitimate and should be allowed to be explored. In all the years that we have been assisting families we have found that there is almost never a meeting like this that came out exactly like we thought it might beforehand. I would advise you not to discount the talent and creativity that might be quietly sitting in your family room.
Healthy conversation around these difficult topics often stimulates ideas and processes that had not been previously considered. We have found that most families handle these conversations with a level of grace that is truly inspiring.
3. Aligning Personal and Business Aspirations
Each family member’s personal career ambitions may not always align perfectly with business needs. However, finding ways to incorporate individual strengths and interests into the enterprise can lead to greater commitment and innovation.
Steps to Align Aspirations:
* Map Family and Business Goals: Identify overlap between family members’ skills and business opportunities.
* Provide Flexible Roles: Encourage the next generation to gain external experience before joining the business to bring fresh perspectives.
* Formalize Governance Structures: Establish clear roles, responsibilities, and decision-making processes to ensure both fairness and efficiency.
4. From Discussion to Action: The Family-Business Balanced Scorecard
A practical tool to ensure alignment is a Family-Business Balanced Scorecard, which helps track progress in four key areas:
Financial Goals – Ensuring business profitability while providing for family needs.
Growth & Innovation – Expanding the enterprise in ways that align with family expertise and interests.
Family Governance – Strengthening communication, succession planning, and ownership structure.
Legacy & Impact – Supporting philanthropy, sustainability, and family values.
Each quarter, families can review progress together, making necessary adjustments.
5. Exercise: Draft a Family Business Mission Statement
A mission statement clarifies your purpose and serves as a guiding principle. Gather as a family and complete the following sentence:
“We are a [family identity] who provide [products/services] for [customer/market] so that [legacy/impact].”
Example:
“We are a multi-generational family of innovative farmers who provide premium, sustainably-grown produce to nourish communities and honor our land, ensuring a legacy of stewardship for future generations.”
Once completed, display this mission statement in your business and revisit it regularly to maintain alignment.
Final Thoughts
Alignment between family and business goals doesn’t happen overnight—it’s an ongoing process that requires open communication, trust, and shared purpose. By taking small, deliberate steps, your family enterprise can create a thriving business that preserves your values for generations to come.
Would you like assistance facilitating these conversations within your family business? Reply to this email, and we’d be happy to support your journey.
If you would like to read our recent book “Family Fortune”, you can access it here: https://a.co/d/3ElVkOn
If you would like to have a conversation with Mike Schmitt, please feel free to schedule a meeting with him here: https://meetings.hubspot.com/mike2616
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