How do you measure the success of a written constitution?

By SOCH Business Mentors LLP Posted March 28, 2023 in Family business

How do you measure the success of a written constitution?

Recently, we were invited to some of the multigenerational family discussions. In one of them, a family member had asked a serious and great question. Before this question that I can share with you, I believe it will only be respectful towards you all for me to share beforehand what all understandings the family hold before they arrive at this question. 

The family began understanding from basic levels to detailed builds via workshops and the advanced stages of understanding in the last six months.

They understood the following as a background for you all to find the importance of the question that, after all this, they asked: 

  • The constitution is not simply a document of written values, beliefs, principles, or policies for ownership & business. It is not the written part of the document that matters – they understood.
  • They understood that like journey counts and not the destination as much – the process counts that helps them all create the destination of the written constitution. 
  • They realised that building a constitution successfully is impossible without family business experts. The experts can be their bedrock of strength, guidance, and support when the family decide to make the constitution. 
  • They understood that all kinds of expertise would be required – not only process experts but subject matter experts for everything related to family wealth, emotions, spirituality, relationship dynamics, psychology, and various knowledge experts such as taxation and inheritance. They admired beyond their original mindset that wasn’t assessing its core importance for the constitution’s success. 
  • They also understood that it would not serve hope for continuity unless the family lived in their decisions and daily chores. 
  • …and other learnings crucial for confidence while investing their hopes for the future of a united, loved, and continuously prospering family name and identity. 

The question they asked now, with all this understanding, was as follows: 

“How will our family be able to measure the success of the constitution?” This is an entirely new thing for us, and to be frank, we have hesitations about its success, and hence it will be a great help if you can explain how we will measure its success.

Our take on this is as below: 

First, we acknowledge that it is far more important to learn the difference between unsuccessful and successful attempts at constitutional development. 

Before this, let us connect with the goals of the constitution. It holds three of them:

  1. It helps raise the development of your business to its full potential. 
  2. It fosters ownership, unity, and commitment. 
  3. It strengthens the harmony in the family. 

So the first obvious indicator of unsuccessful constitutional development is to complete it. Yes, completing the constitution is key, and families must develop a resolve for the same. Taking help continuously from advice and recommendations of experts in the process. Once complete in writing, the completion cannot be yet declared unless there is a signature by all parties involved or at least key major people. 

Having a signed constitution, however, does not ensure its success. 

Second, a completed document might feature inappropriate content, potentially dangerous to the family and business. 

Therefore, a second indicator is the quality of the content. Successful constitutions contain “believed in action” value statements, principles, and policies, which respect family business unique long-term best practices, are internally consistent and are faithful to the constitution’s purpose. 

However, success is still not ensured even if the document has perfect content.

Now the third and most decisive indicator is whether the agreement impacts behaviour, makes a difference and acts as a catalyst for change. Does the constitution serve when challenged or when circumstances require amendments? You must see that the family constitution is much more than sheets of paper. They are ‘paper in action’ catalysing innovation in the family business system. Hence, it is truly successful when one lives with earnest strive daily. 

Changes sparked by the family constitution can be specific and structural. New family structures like the family council, assembly, foundation, and family offices are developed, all aiding the family in systematic decision-making and living every day full of faith and integrity with health, wealth, and happiness. Changes in management systems and the family enterprise’s entire go-to model get maximum leverage and inspiration from the same. 

Leadership succession in various areas of business and philanthropy can be catalysed. New family policies for the welfare of all and family name can be created regarding owners’ training, liquidity, unity, philanthropy, or any other relevant topics close to the family’s identity and head, heart and soul. 

Once the success of all three points shared above is measured, the real manifestation of the family’s unknown giant potential is unlocked in systematic, continuous, and stronger ways. 

I hope this has added a few more perspectives to all of you, whom I thank from the bottom of my heart for perusing and writing back and inspiring us here to serve your beautiful intentions by bending backwards.