How to get value out of your values as a Family Business?

As we approach the end of the calendar year, we are encouraged to appreciate the value of family. Many people around the globe will be taking the opportunity to reflect on the year that has passed and what lies ahead. For some it will be a special time for celebration and reflection; for others it will represent continuity and progression. For those in family business, it is often both.

The role of family values was a central theme of the 9th Global Family Business Survey launched last month. We spoke to nearly three thousand senior executives across 53 territories and found a robust optimism about business prospects. Levels of reported growth are at their highest since 2007, with 84% expecting revenues to continue to increase.  

Confidence about the value of being a family business is also strong. Nearly 75% felt that having a clear set of values gave them a competitive advantage over non-family rivals. The survey supports that sentiment: of those reporting double-digit growth, 53% could point towards a codified set of values that guides their business strategy.

Adopting an active stance towards company values generates practices that pay off in real terms. A commitment to a clearly defined set of values can act as an ‘inner compass’ for a family business as it navigates the challenges of technological and competitive disruption.

Yet what the survey also highlights is that family business values are not the same as family values. It is about how these values are integrated into a wider strategy for growth. Business values should be clearly defined and articulated, but also strongly embedded in the business culture and the day-to-day decision-making regularly reviewed.

The case studies we interviewed for the survey from ten of the world’s most prestigious family businesses, speak powerfully about the unique sense of purpose and responsibility that comes from ensuring these are lived values across the organisation.

For instance Reinhard Zinkann, executive director of Miele, likens their values to the ‘genetic code’ that have to be translated and understandable across the business. A similar sentiment is expressed by Simone Begel-Trah of Henkel who explains that ‘It’s much easier to identify with a set of values and act on them when they are clearly laid out and are relevant to employees in their daily work.’

That is why, drawing on my experience and insights from the survey, I have put together five principles for getting value out of your values (which you can also see me set out in a video here: https://www.dhirubhai.net/feed/update/activity:6471133242203336704/):

1. Be specific about your values: codify them, write them down and act on them. Do this with the full involvement of family members. This will strengthen not only your family cohesion but help you make better decisions for the family business.

2. Communicate your values internally and externally to activate your family business advantage. Many family businesses have values but don’t always bring them to others’ attention. You can’t get value from your values if you don’t communicate them.

3. Develop business principles and a code of conduct that brings your values to life. This helps build trust and credibility internally and externally and open doors for new business partners.

4. Put values at the forefront of your recruitment efforts and embed them into your workplace, as you seek to bring the best talent to your business. Displaying your values is a good way to attract and retain the best talent for your business.

5. Focus on value creation along the entire value chain, such as ensuring that you work according to shared ethical standards. Your values have a mutually reinforcing impact beyond your own business.

Ensuring that values can be communicated across generations, and woven into the fabric of the business, is of course one of the most powerful motivations of family business owners. As Victoria Mars of Mars Inc says, ‘the real connector between the family and the company are (our) five principles of how we do business. It’s the glue that holds us together.’

This sense of legacy and long-term thinking is unique to family business. As we launch the survey across many of PwC’s territories over the coming months I am looking forward to exploring some of the challenges and opportunities facing family business owners in more depth here.

I welcome your feedback and look forward to continuing the discussions into 2019.

All the best

Peter