Family Business Mission Statements

A mission statement describes in detail the family’s commitment to the family and the business. It explains why the family is committed to perpetuating the business and outlines the family’s central values. It might include a summary of family priorities, a list of strengths the family can contribute to the business, and an outline of what the business needs from the family. It is a unified expression of the family’s common purpose, and should be as clear and useful as possible as a guide in decision making. It should be able to serve as the family’s credo, and answer four basic questions: 

1. Who we are?
2.  What do we stand for?
3.  What do we want to do?
4.  What will we do to accomplish those things?

The Mission Statement will reflect a basic philosophy about what comes first: the family or the business. “Business first” families support what is best for the company, its customers, employees and shareholders. They select sound business principles to govern hiring, compensation, and titles. They reason that such principles are fair and constitute excellent criteria by which to make tough decisions that will affect the entire family, and are willing to abide by these principles even if they lead to unequal treatment of family members or to selling the business.

“Family first” families believe that the family’s happiness and sense of togetherness should come before everything else. Their decisions will favor family equality and unity even at the expense of the business. Differences in the quality and degree of family members’ contributions to the business will not be recognized. Everyone will be allowed to enter the business and will be compensated equally.

A third approach seeks a balance between “business first” and “family first.” This philosophy holds that any decision must provide for both the satisfaction of the family and the economic health of the business, and that only a good compromise will win the enthusiasm of the family and support for the business. It implies a long-term commitment to the future of the business and the family and requires the family to creatively resolve conflicts between the two interests.

Balancing family and business goals requires compromise, extra effort, planning and communication. But it may preserve the integrity of the business and serve the individual needs and interests of the family’s members.

The following is a sample mission statement: We seek to achieve growth and prosperity, extending beyond the present generation, through our business. We are committed to providing opportunities for descendants of Richard C. and Iris C. and their families to 

1. obtain a firsthand understanding of the risks and rewards of American business ownership,
2. gain insight into the value of Christian principles in business,
3. experience the sacrifices and rewards of family members closely working together toward common objectives, and
4. maximize the quality of life for their families and future generations. To encourage all descendants of the founders and their family members to develop and apply their specialized talents to the business and to compensate them according to their contribution.
5. To provide an ownership opportunity to all direct descendants of the founders while they are full-time participants in the business.
6. To foster a spirit of belonging as “extended family” to non family employees as well, by sharing appreciation, rewards, and benefits that will maximize a mutually prosperous and enriching long-term relationship.

Can you tell whether the family that wrote this family mission statement is business or family first, or a hybrid of the two?

Family missions statements can be developed at a series of family meetings or through a Family Council (which we describe earlier in this chapter). Many families have a family business advisor lead this process; other families have experienced family business managers or a family member, perhaps one who has experience in management consulting or industrial psychology, in or out of the family business, to oversee development of the mission statement.

A family mission statement should not be filed away and forgotten. It can be extremely useful, guiding the family through difficult decisions, dilemmas and conflicts. When facing such critical times, the family may find it helpful to ask themselves, “which choices before us support the family’s mission statement?” In many cases, this can help unify individuals and clarify which options align with the family’s agreed-on mission.

Business Mission Statement Family businesses that have evolved over generations may have a separate mission statement for the business and for the family. Often businesses that are in stage III, or the cousin generation develop a unique mission statement for the family to help keep extended family together as a group of owners and as family members.

A business mission statement is different than a family mission, in that it focuses on the broad goals for the business, and how the business will achieve those goals. Organizations of all types – churches, schools, civic groups, foundations, and businesses– have a mission, a purpose, and a reason for being. Developing a Mission Statement and Values for the family business are the first steps to being more systematic about ensuring that the future direction of the business is consistent with that of the family’s interest.

Your mission statement differentiates your family and business from others. In a few words the mission statement is what your family stands for and why you do it! A mission statement makes it easier for the family to work toward a shared set of goals and provide a touchstone when there is conflict and confusion.

A mission statement is meant to be a living document. Does your family business have a written mission statement and values? When was the last time the family reviewed it? Are your goals the same today as they were twenty years ago? Mission statements are most meaningful when they are revisited every couple of years and refined.

When explaining the function of mission statements, we sometimes hear clients comment, “That sounds good, but we don’t have time to go through all that” or “We are going to skip that part and just develop a business plan because we have to get product out the door” and “We all know what our mission is. It is to stay in business another year.” Our response is that you can omit it, but if you do not have a mission statement, it will be more difficult to resolve future conflict, make decisions confidently, and generally manage your family’s future successfully.

For the family, a family business mission statement and guiding values are a like a lighthouse beacon to help align the family and their decision-making. It is also a means to communicate to employees, customers, investors, and the community what the family stands for and what they are trying to achieve. A business mission state is based on the same four questions as the family mission statement, but from the perspective of the business: 

1. Who we are?
2. What do we stand for?
3. What do we want to do (goals)?
4. What will we do to accomplish those things?

The process of developing a business mission statement is also similar to the family mission statement process described above, except that the participants in this process will include family business leaders and perhaps the Board of Directors. The company’s strategic plan should be guided by the goals set forth in the business mission statement. And as challenges, problems, and ethical dilemma confront the business, the business mission statement can guide its leaders and help narrow down the choices.

A family business mission statement can take many different forms. The statement captures the essence and energy of the group. We have included some examples of other families’ mission statements in this module. The sample statements are meant to be inspirational, informative, and a stimulus to generate ideas for your statement. Mission statements are as individual as each family is and cannot be copied.

In general mission statements are about one hundred words long. When read they often cause a tear or a shiver because of their passion and commitment. We coach our clients to develop their mission statements in a family business meeting off-site and away from distraction. It is important for the family to meet, listen to each other and genuinely exchange ideas about what is really important to them as individuals and as members of the family. It is from this dialogue that the family will create their mission statement.

The mission statement explains why the family is in the business and the relationship of the family to the business. It also addresses what the family and the business should stand for. Most contain a statement about the philosophy of management the family wants the business to have, as well as some ideas about the relationship of the family and the business to the community and society.

Making the mission statement and values available to your vendors, customers, and the community is good for the family because it lets others know what you stand for and how you work. Some companies post their family mission statement and values on the home page of their website or on an About Us page. Research also shows that when employees understand the ownership’s mission and that the employees’ jobs are a concern of the family, they are typically more engaged in their work, feel a greater sense of pride and loyalty, and are more productive.

A mission statement can also influence the governance structure of a family business. The family’s mission statement and guiding values will influence the criteria for the Board of Directors or of the members of an Advisory Board.

Also impacted will be the description of the roles and responsibilities and how decisions are made. A family business mission statement is not an objective with a timeline, but rather it is the overall goal that is accomplished over the years as objectives are achieved that are aligned with the mission.

Sample Mission Statement

We are a family committed to our members and descendants being responsible, productive, well educated citizens who practice the work ethic and make constructive contributions in the local community and the world at large. Each member is encouraged to develop and use self supporting, marketable skills that contribute to the enhancement of their own self-esteem and independence.

We urge family members to adopt life styles that are healthy, personally satisfying and as such a profile as to preserve the maximum level of family privacy, given the public nature of our business.

We urge the continuation of the orientation of prudent, careful investigating with a long-term view of outcomes so all descendants of ________________ may enjoy the benefits of the foundation they built.

We believe clear, constructive communications are at the core of our long-term success as a family.

We encourage all efforts to further harmony, develop humor and perspective on life, balance long-term concerns while enjoying the present; and to enhance communications, caring and amicable relationships among family members.

Code of Conduct

Our lives are shaped by the commitments we make. Marriage, parenthood, ownership, military service and employment are examples of these defining commitments. Some commitments are legally binding; others are morally binding. The legally binding commitments are contractual, while the morally binding commitments are sometimes known as covenants.

The sample Code of Conduct below was reached by three siblings who are third-generation owners of a family business. In the course of a weekend retreat they worked very hard to put these ideas and feelings into words instead to prevent them from making assumptions about what one another thought. They made this effort because they realized that the long-term stability of their family and their business was, and would increasingly be, based on the quality of their relationships. Here are the promises they made.

Code of Conduct Covenants

In recognition of the challenges of leading a family in business across generations and out of our desire to enrich and pass on the legacy of our parents we promise:

• To deal with one another with honesty, trust, integrity, love, respect and maturity.
• To treat one another as we want to be treated.
• To share power and authority responsibly by listening to each other, respecting our respective opinions, showing humility, looking at all sides of an issue before making a decision, being open minded, supporting one another in public once decisions have been made, welcome constructive disagreement among us, but be united in public.
• To disagree skillfully with civility and without hostility or anger.
• To develop the skills necessary to diffuse hostile misunderstandings or disagreements.
• To recognize the unique nature of our relationships with one another and place a priority on clear and skillful communication.
• To stay positively connected by meeting regularly as a family, as owners and as managers so that each of these parts of our lives gets the attention it needs.
• To encourage the development of the next generation as stewards of their shared assets, and possibly as leaders of the company.

Moral commitments are often made without being spoken or written. Sometimes they are made verbally and sealed with a handshake. However, there are points in relationships when it’s necessary to commit these commitments into writing, to make them even more powerful and binding. There is power in the thought and conversation that must happen to reach agreement on complicated issues.

The discussion required to put these ideas and feelings into words that everyone accepts brings greater clarity and minimizes the chances that they will make incorrect assumptions. Here are a few ideas that may help if you think that your family needs it own covenants: 

• Set aside an extended period of time, such as a weekend.
• Pick a relaxing setting where you will not be distracted by telephones (and require everyone to turn off mobile devices during sessions).
• Set aside at least two breaks from discussions during the day to have time alone with your thoughts.
• Resolve to be open to outcomes without being overly attached to a specific outcome that you had thought of earlier.
• Create an environment that encourages mutual understanding and dialogue rather than debate.
• If you are comfortable with technology, use a laptop computer connected to an LCD projector when the time comes to collectively draft the language of your covenants. You may find that it is a much more engaging media than using flipcharts.
• Expect to be frustrated at times during the process. When you feel stuck, probe to understand each of your underlying values that may not be aligned.
• Consider using a professional facilitator so that no family member will be burdened with responsibility of leading the process at the expense of being able to be an equal participant with others.

 No document—neither a contract nor a covenant—can control the emotional dynamics or politics of some family businesses. But an early commitment to values and principles can prevent some conflicts from ever developing. The actual process of reaching these agreements as a group and committing them to writing will reduce your chances of misunderstandings, hostility, hurt feelings or even litigation.