Family businesses are recognised for taking a long-term view and planning for generations to come. Values are an important differentiator for family firms and help to create a unique culture within the business, often driven by the founder and their vision and embedded into the business over time. They can also be an integral part of the long term sustainability and success of the business too.
Despite the challenges posed by the pandemic and now the prevailing economic climate and the need for more shorter term plans to respond to the challenges being faced, it is clear that values have been ingrained into the fabric of a family business have not only helped them survive but also thrive. In the Family Business United survey two years ago it was identified that 94% of respondents across the UK felt that their values played an important part in defining their family business strategy with 86% believing that their values helped in the day-to-day running of the business too. Add to the mix that 66% believe that values can help to increase revenues and profitability as well as driving growth, it is easy to see why it is more important than ever that values continue to have a prominent focus within family owned firms.
As defined by Sorensen in 2014, a characteristic of a strong culture is having a strong set of values and family firms with a strong culture tend to be built around a set of strong core values with succeeding generations reinforcing and further developing the values that were established by the founders when the business was created. It is often the case that defined and shared values combined with an aligned and shared purpose and goals promotes unity and cohesion as well as entrepreneurship and innovation.
Family firms by their very nature are rooted with purpose and core values such as integrity, quality, trust, passion, fairness and respect. These values can be extremely productive for the business when considered, documented and communicated throughout the organisation, and family business leaders themselves fully believe that clearly shared and communicated values can reduce the potential for conflicts to occur too.
As part of the 2022 Family Business Survey, we asked family businesses to share the values that they felt were present within their organisations.
The core family business values in the UK were ranked in terms of their importance as follows:
1 – Integrity (81%)
2 – Quality (72%)
3 – Trust (71%)
4 – Passion (63%)
5 – Fairness (56%)
6 – Respect (52%)
7 – Social Responsibility (49%)
8 – Excellence (46%)
9 – Authenticity (45%)
10 – Innovation (44%)
11 – Long Term Perspective (44%)
12 – Forward Thinking (43%)
13 – Pride (42%)
14 – Entrepreneurship (40%)
15 – Community Involvement (34%)
Values are important. They help define the very essence of each and every business. However, far from simply being a list of words, they become a powerful representation of the very essence of a family business when they are ‘lived and breathed’ within an organisation. Successful family firms embed their values within the business and share them widely to ensure that they are evident and permeate the business at all levels.
They help differentiate family firms from their non-family counterparts too as they are personal, mean something special to each business and as they are anchored in the founders have a real and lasting legacy too. Of course family businesses evolve over time, as do the values and the influence of subsequent generations but they have foundations in the family, those that have shaped and continue to shape the business as it evolves and should never be underestimated either.
They help define each and every family business and help drive sustainability and long term success.
Family firms may be living through uncertain times but a clear set of values can help guide them on their way.