Owners are the defining factor for the future of the business.
No progress can happen without the ownership being prepared, willed and skilled for change.
Mighty businesses have fallen because the ownership did not want to leave their comfort zone in time and acknowledge the changes. Usually, this results in not taking the changes head-on.
The practicalities of misalignment
When we are asked by our family business clients as to why ownership alignment is important. We often tell them a story of three brothers who are third-generation business owners.
For one brother, the purpose of owning the business is to create maximum profits. For example, if the company has the opportunity to go global resulting in downsizing the local workforce, the opportunity makes sense for him because his measure of success is financial.
For the second brother, he sees them as stewards of the family business and their identity – as family and business is the pillar in the community. Going global at the cost of local workforce is a trade-off which he doesn’t see as success. He believes there are better ways to thrive while capturing the same opportunity.
For the third brother, he is left in the middle of this tug-of-war and is unsure of what he really wants.
This story helps our clients to remind and calculate in their own lives how misalignment can cause serious loss of time, loss of morale and loss of confidence altogether. The most important loss of all is of the happiness and the charm necessary to grow any successful business.
Family businesses are unique, with their own business advantages, and at the centre lies an important dynamic that connects the family, the business and the ownership.
Ownership alignment – where does it begin?
As a family business, you owe to your past and future generations to create a well-defined, structured, and timeless guide of what ownership itself means for your family business. Usually, it is a comprehensive guideline in your constitution that you design most usefully when the business is in its second generation.
Our approach to Ownership
Having worked with family businesses for nearly 25 years, we understand that working on ownership and working with the ownership can invite some resistance at first. We often tell our clients: If you want to go long, you start slow but sure – Always begin with working on and with the ownership first.
Like for any long-term goal, building an ownership that delivers generational results require a systematic developmental approach. Our approach begins with first creating the Ownership Personal and Institutional Map that acts as a roadmap for all the family business change initiatives required to deliver the success definition that matters for the ownership.
The structural aspects of ownership such as legal, financial, power, decisions and even rights – They ought to be worked out under the overarching influence of the Family Business as a whole.
Easy choices. Hard life. (or) Hard choices. Easy life.
Focusing on the ownership is about the latter. It begins with a few hard choices only to ensure that you can create for yourself and your family an easier, fulfilling and happy life where both harmony & prosperity can grow leaps and bounds.
Instant gratification (easy choice) usually brings a powerful logic, almost undeniable, on the ownership table. However, the legendary owners know that it is a trap with a lot of financial attraction and comfort. They detach themselves from this trap by focusing on the long-term value that they want to create for their family business. This is a hard choice.