Lack of a shared vision is one of the most significant threats to the sustainability of a family business through multiple generations of family ownership. Professor Steve Miller’s research has found that in addition to being a critical success factor, having a shared vision is strongly predictive of the presence of effective next-generation family business leaders.
If shared vision is so critical to family business continuity, how does a business-owning family create it? Miller’s research demonstrates that open and transparent communication in the family is one of the keys, as it strongly predicted the presence of a shared vision for the business. On the other hand, a senior generation that exercises unquestioned authority and makes all the rules was even more strongly predictive of the lack of a shared vision. That kind of autocratic leadership style can shut down the open communication that is so necessary to the development of a shared vision for the future of the family firm.
The Family Enterprise Center’s third Annual Family Business Forum helped families increase communication and start the process of creating a shared vision for their family enterprises. Participants began the day by filling out a vision survey – before discussing it with other family members – to determine where there was agreement and where there were different ideas about the future of the business.
The families then took time to reflect together. If they identified a shared vision, they evaluated the progress made toward making that vision a reality. What had enhanced or hindered progress? Did anything need to be done differently to achieve the vision? If there was not a clearly articulated vision, families openly discussed their hopes for the future of the company and assessed market changes and business opportunities that might influence their vision.
All families were encouraged to discuss why they choose to be in business together as a family. Staying in business together from generation to generation is not a given, and it is important for families to assess their ongoing commitment to each other as they craft a vision for the future of the family enterprise.
Each family made specific plans and established timelines to continue working on a shared vision after the Forum, to include identifying family members, company employees and other key constituents who need to be involved in the process.
Miller shared these tips developing a vision and strategy:
By Cooper Biersach (BA ’91, MBA/JD ’96), co-founder and director of the Family Enterprise Center