What is your why?
Knowing your “Why” means understanding why you do the things you do. It's the reason you do the things you do. Everyone has a WHY — it is the purpose, cause or belief that drives every one of us. The effects of your why trickle down into every area of life. In families and businesses, it is critical that the “why?” is discovered early into a venture. Whether its at the starting stages or if its a business taken over whilst operating. For many people, their why comes from necessity. They have to pay the bills and support their family. It comes from a sense of obligation to do what needs to be done without regard for their own wants and desires. This is where many of us get lost from time to time.
Let’s focus on business and how one can get lost if they don’t define their why in this space.
Here are four ways which one may find themselves in, in a business:
You have a great idea and believe you can solve a problem, and so because of this, you decide to start a business.
There is a business idea that you come across with a friend or family member and you decide to venture together.
Your spouse is in business and s/he suggest that you join them to “help out”.
You are a child that was born into a family business but initially decide on a career path. A few years down the line you are enticed into joining the family business.
This list is but a summarised list from the various possible reasons. As we can see from the examples given, the ways a business can start can be varied and how someone joins the business can also be very varied and interesting.
In my experience as a consultant, I have found that in the beginning, all parties are excited about the venture and the opportunities that it may hold. However, as time moves forward and the business gets a bit complex, the nature of the relationship between the business and its owners and partners or family members can be conflicted.
Some family members or partners may encourage the owner to sell the business and at times threaten to quit whilst demanding what they believe is their fair share of the money they worked for. Whilst some individuals may want to stick it out and push the business to grow whilst weathering the bad storms.
These situations mostly arise when there is no clarity on the roles of each member of the family in the business and if there is no clarity on the values of the individuals collectively or individually. Going with our example, when the business is flailing, and there is no clear picture on how to save it. You may find that the stakeholders advocating for the sale may have, from the beginning of the business, not been interested in it as a long term investment but more of a quick cash cow. The moment more money or effort is needed to grow the business is necessary, their interest is lost and they are more willing to cut their losses and leave the flailing entity to be someone else’s problem.
On the other hand, other stakeholders may have invested in the entity as a lifetime commitment and the thought of selling is not their first priority.
Faced with this impasse the family must turn to their values or a family constitution if one is in place. What would have been best is if the stakeholders had gotten together from the beginning and discussed clearly what are the values of the family and the business and the parameters of both family and business and how matters are solved would now be set to the value document to now clarify and assist resolve conflict.
Similarly so in the case of an elderly family business owner who grows a massive company empire with the assistance of his daughter. His son decided on a different career path and has no interest in the family business. However, father’s will states clearly that he is the inheritor of the estate and business as he is the firstborn son. When he dies this alienates the one person willing and able to run the family business successfully, who has worked with the father throughout the development and growth.
Again it is clear that the family constitution would have outlines the governance issues including the values and succession. This would help this business transition smoothly and give the company a chance to survive under a stronger team of Next Generation leaders.
As a family business, it is critical that you establish your why? and therefore answer this why within your family constitution. You should then again, regularly, with the help of a professional advisor, be willing to delve into the question of “why?” As a business and as individuals in the business. When each one of the important players has identified why and made it clear, it makes it easier to understand their decisions and ultimately be best placed to help them. in a way that does not conflict with the business and the various family members and or shareholders.