“Long-term values.” At first I didn’t hear the “s.” For years, I had witnessed many investors and executives talk about creating long-term value to distinguish from short-term, unsustainable gains. I had also frequently used the term myself. As we’ve noted in this magazine and discussed at our conferences, family businesses’ focus on creating long-term value enables them to better balance purpose with profit, support multiple stakeholders and develop strong cultures.
But then Easter Maynard said it again. Easter is the chair of Golden Corral Corporation and director of community investment of Investors Management Corporation, the parent company of Golden Corral and other companies. She was a keynote speaker at our Family Business Legacy conference in September.
“Long-term values.” Such a simple but powerful concept. These aren’t values that change from year to year or even decade to decade. They are deeply ingrained in the family and are core convictions etched into the company’s DNA, inspiring its societal commitments, environmental responsibilities and moral consciousness. They are the north star that guides successive generations.
As baby boomers retire, we are in the midst of the largest-ever generational transition of leadership and intergenerational transfer of wealth. While these transitions provide an opportunity to rejuvenate the family enterprise, they can also reopen old wounds and reignite old conflicts. A well-thought-out succession plan, created years before the actual event, is key to avoiding pitfalls. However, though necessary, it is not sufficient. Communicating the family’s long-term values is vital.
As Scott Clemons, chief investment strategist at Brown Brothers Harriman, underscores in this issue, helping the next generation distinguish between values and preferences is critical. Preferences are the ways different generations express their core values. To illustrate the point, Clemons gives the example of a business founded on values around corporate philanthropy coupled with strong faith-based messaging. While the next generation may not feel as strongly about that messaging, he explains, they can still uphold the family’s core values by continuing its philanthropic efforts.
Ultimately, it is up to the senior generation to communicate these values, which can be observed by younger family members in how the business is run and how the family cares for its stakeholders. These stakeholders frequently include the community, service to which is often a central tenet of the family’s beliefs.
However, unless the next generation members are intimately involved in the company, it can be challenging for these values to be absorbed through osmosis. Proactive steps such as planning family retreats where the values are discussed and observed or — as my family does — penning letters from one generation to the next can help. With the goal of helping families communicate long-term values, we are excited to announce that Family Business Magazine and Greenleaf Book Group have partnered to create Family Business Press to share the experiences and guidance of family business leaders and owners regarding all aspects of building, growing and sustaining a successful family business. Additionally, Family Business Press will help families tell the story of their company’s history and family’s legacy with a beautifully crafted book that can be shared with family members, friends, employees and clients. We hope this will help families achieve the added value of long-term values.