By Daisy Medici
At its core, a mission statement is a compass. It directs and aligns people toward true north. A mission statement crafted by the family can be referenced for guidance when decisions must be made, conflicts resolved or questions answered as family members journey toward success.
However, if the mission statement is not aligned with the family's beliefs, it will not resonate with family members, nor will it double as a compass should there come a time when the path or the journey grows unclear. In other words, the mission statement must be based on a family's shared values.
So what are values? How do you define them?
Values are inherent in us. As we go through life, we are being driven by a set of values that influences our choices and decisions. Anytime a discussion prompts a question of what is more important, values enter the picture.
Values confer meaning; they are the motivation behind behaviors. Although many people may find it hard to list specific values, they intuitively recognize the significance once their own values are clearly defined.
Values underlie all life choices. They motivate the search for and development of skills, and the creation and pursuit of a vision.
People use values to establish relationships with others. Values help tie individuals to a group, a team, a family, an organization, an institution and society in general. Values lie at the heart of all human relationships.
Communicating the family values
When family members become aware of their own values and those they share with their relatives, the family begins to realize higher levels of cohesion, unity and communication.
The power of this is in the numbers.
Research shows that most wealth transfer failures are caused by the breakdown of communication and trust within the family unit (R.O. Williams and V. Preisser, Preparing Heirs: Five Steps to a Successful Transitions of Family Wealth and Values, Robert D. Reed Publishers, 2003).
We have seen how improving communication skills helps bring a family closer together even if they are experiencing unresolved conflict. And we've seen how better communication can help prevent future conflict among family members. The fact is that open, honest and healthy communication between family members creates trust—and trust goes a long way toward preventing conflict. We have also observed that family cohesiveness is greatly improved in families that openly and explicitly discuss their shared values.
"Family cohesiveness" is a term that refers to a family's common bonds and desire to work and play together. It is important that family members continually build and strengthen familial bonds so that money and legal structures are not the only ties that bind them together.
The process of determining the family values might begin with a survey of the family, to identify each family member's personal values as well as the values that all family members share.
The survey results can serve as a guide for facilitated family discussions during which everyone shares experiences of living his or her values and gains an understanding of what other family members value. This allows the family to bond around their shared values and find alignment that will support and expedite their work together. The process clarifies what is important to each family member (personal values) and what is important to the family as a whole (shared values).
Individual family members gain a deeper self-awareness, while familial bonds strengthen. The process also helps clarify individual and family belief systems. Identifying values helps family members understand what energizes them, what drives their behaviors and motivates them to action.
This work becomes even more crucial in families where opposing views—such as differing political stances or religious beliefs—create tension.
Family members have different opinions and perspectives based on their life experiences. Some members may be on opposite sides of the political spectrum; others may not share the same religious beliefs or may feel differently about adhering to religious practices. But families who are joined through shared ownership of assets must work to celebrate their individual differences and values, as well as to identify the values they have in common.
This can be very difficult for families with unresolved conflict. Family members who are not talking run the risk of forever fighting over money, sometimes with the help of the courts. There must be a strong commitment and a wish to steward the family legacy by aligning the family around a common vision and allowing the shared values and mission statement to act as a guide.
It is hard work. But for any family that wishes to gather successfully around their family enterprise and plan strategically for the future of that enterprise, it is the most important work.
A family mission statement
In our experience, simply having family members sit down to discuss their shared values results in improved family cohesiveness. The next step is to create a values-based family mission statement, which offers guidelines in making family decisions.
"To successfully preserve its wealth, a family must form a social compact among its members reflecting its shared values, and each successive generation must reaffirm and readopt that social compact," James E. (Jay) Hughes Jr. wrote in Family Wealth: Keeping It in the Family (Bloomberg Press, 2004).
A mission statement conveys the family's purpose. "A family mission statement is a combined, unified expression from all family members of what your family is all about and the principles you choose to govern your family life," Hughes explained in Family Wealth.
The emotional and physical health of each individual family member must be nurtured in order for the family to remain a cohesive group. Families must make it a priority to "stress each family member's individual pursuit of happiness," noted Charles W. Collier in Wealth in Families (Harvard University, 2002).
Families who place greater importance on the family's money than on family members' well-being will inevitably fracture. We believe that a family's financial capital should sit in service to the continued development of the human and intellectual capital of the family.
Once family members gather to explore their values and engage in the process of developing a mission statement, they begin to see the need to implement family governance. The rich and thoughtful discussion about who they are as a family and what they want their wealth to do for them is essential to the process. Active and enthusiastic participation is key to a family's ability to achieve its goals.
Consider the example of the Genson family, whose second generation was preparing to join the family foundation.
The values and mission process in action
Patty and Lou Genson, entrepreneurs who created the wealth, had four children. Three of the children were married; there were seven grandchildren, ranging in age from 8 to 22.
Historically, the Gensons had been very philanthropic. The family foundation had been led by the founders, Patty and Lou. The four members of the second generation were all excited to be involved in the family foundation but were unclear how to begin.
All six members of G1 and G2, along with the two adult members of G3, participated in discussions with advisers. They were very serious about their foundation and identifying its mission. In their discussions, they drilled down to make certain they were capturing not only the values that were important to each of them, but also the values they shared as a family. While there were differing interests across the family, each member felt strongly about supporting early elementary education and research on Alzheimer's disease, which had affected their family in the past.
Once the family's shared values were determined, it was relatively easy to draft a Genson Family Foundation Mission Statement. Over the course of two meetings and one phone call, they all agreed to a final draft and memorialized the statement with a framed, signed copy. The copy was hung in Patty and Lou's kitchen, the symbolic center of the family home.
As time went on, the members of G1 and G2 who served on the foundation board referred to the mission statement when making any philanthropic decisions. At its annual retreat, the entire family—including the seven grandchildren—referenced the mission statement when each generation selected a place to donate money in memory of one of their loved ones. Time was spent talking about the family's values and the specifics of the mission statement. Each generation used these reference points to determine what special gift might properly align with the family's values and mission. Members of both G2 and G3 were enormously successful at collectively identifying where they wanted to make their donations. It was a very positive and rewarding experience for all involved.
A compass to guide the family
Families who adopt these strategies for identifying shared values and then use those values to create a mission statement will end up with more than just a piece of paper. They will have a compass that guides them to their goals. It will be meaningful to each member of the family because each member participated in its creation.
Daisy Medici is managing director of governance and education at GenSpring Family Offices (www.genspring.com).
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