The Family Without The Business
When a multi-generational family owns a business together, its members are inevitably connected. With ownership spread across family units and generations, everybody shares a responsibility - whether they like it or not. There is a relationship of dependency, from business to family, from family to business and from family member to family member. Besides interdependence, responsibility and the administrative burden, being part of a business family offers returns beyond the dividends. At Trusted Family, we often refer to ‘non-financial assets’; The trove of strengths and opportunities available to every family member by the mere merit of birth. Consider, for instance, the networks that are available. The shared reputation, offering access to valuable contacts and events. Or what to think of the knowledge that was built up and contained within the generations? All of it, just one email away.
But what if the business is sold? Do you lose everything? Yes, if you don’t act. I believe these strengths remain worth nurturing. The value of family and its non-financial assets can stand on their own to become the foundation of new successes. In this white paper, I will lay out some thoughts on keeping your family together without an active, operating business.
Find a common purpose
You will recognize that to a family, a business is much more than its assets. It’s a joint narrative. You aren’t just a Heineken, you are beer brewing royalty. Pride and the ownership of something special offer family shareholders a sense of purpose money will never replace. When the operating business is sold and the so-called ‘liquidity-event’ follows, the family community is left with lots of cash, but without a beating heart.
“When the operating business is sold and the so-called ‘liquidity-event’ follows, the family community is left with lots of cash, but without a beating heart.”
My first piece of advice would be to find a new one. A project, investment, organization or common goal your family members can unite around and work towards. It doesn’t need the size or success of the former business, but it needs a common denominator; Something your family members can get behind.
Amongst our clients, we’ve seen various examples. From a family start-up fund to a philanthropic foundation. From an impact investment initiative to a family estate in the countryside. Whatever your goal, whatever your family’s interest: build something they can feel a part of.
Over a decade ago, my own family decided to put a part of the proceeds from the sale of our business into a fund that would give back to a world we felt we owed. Entrepreneurship being a key characteristic in our legacy, we decided to help entrepreneurs in Eastern Africa by providing growth capital for their proven-business model ventures. Not only were we awarded with the reward of fulfilment, the fund is turning a healthy profit too!
Engage your members around this purpose
Initiatives like these are often carried by a smaller group of dedicated family members. This is only logical and keeps things manageable. It is important, however, to make sure everybody has the opportunity to feel a part of the work. Some family members will be eager to actively participate. Others will just want to be informed. Try to get a sense of your families’ appetite for these different levels of involvement and strategize accordingly. You have three key tools that can help you bring the joint endeavor into your family’s hearts and minds:
‘Family success’ is a narrative. Too often, wealthy business families are ridden with conflict. Measuring a family’s success by their net worth is a flawed concept. Success could be defined by the impact the family has on the world they live in. The successful businesses it helped launch, the number of elephants it saved from being poached, students following their dreams or patients returning to health in a hospital wing: your impact will be the foundation of your narrative for family success. You just have to show it. Package your stories in attractive content formats. Create videos, newsletters, interviews and photo-series to capture your community’s imagination. Be patient, consistent and on-topic. Soon you will speak to a sense of purpose and activate new enthusiasm for the family beyond the money.
“Soon you will speak to a sense of purpose and activate new enthusiasm for the family beyond the money.”
Content ends where experiences begin. However compelling a good interview can be, nothing compares to real-life experience. Take your family out into the field. Show the work, make them think and give them responsibility. In my family, many of the next generation members were asked for ‘observer’ positions within the organization’s various boards and advisory councils. A powerful tool to educate them on the one hand and bring a family perspective into the organization on the other.
Last but not least, find a central place where all your family members, content and stories can come together in between physical meetings. With increasingly geographically dispersed families and busier schedules every year, take the family to where its members are: on their phones, tablets and computers. Trusted Family offers such a platform. It’s secure and includes all the functionality you need to run your initiatives and collaborate online.
Take the family to where its members are: on their phones, tablets and computers.
Create opportunity for your next generation
Whatever you do, bear in mind it has to deliver. What’s in it for your family members? This can vary from family to family, but it does bring be back to the non-financial assets. Is it money? Access to capital? Network? The ability to start a business in the slipstream of a great reputation?
Build something that can carry family members forward, accelerate their progress and bring them closer to realizing their dreams. You have the luxury to start all over. Take the chance, make a difference and grow a legacy beyond your bank account.