The Power of Purpose

  • Miles Davies, Director |

3 min read

As 2020 has thrown more challenge at those leading businesses than in my lifetime, those running the companies on which so many depend for jobs, goods and services are being required to make significant decisions on a very regular basis. In such circumstances, having a clear sense of purpose is essential.

Throughout the last few months COVID-19 has accelerated the pace of change. For example, the exponential rise of remote working which nine months ago was something preserved for the few, and is now enjoyed (to some extent) by the many.

And, linked to this, people are now routinely discussing mental health and it is regularly explored in the nation’s press.  Of course, it’s a shame that the discussion is necessary, but this feels like a hugely positive change in our society’s values.

Organisations have had to rethink how they operate, some are fundamentally shifting their supply chains, and many have repositioned or changed the products or services they offer, as the markets they serve are altered in a way not seen before.

All of these are consistent themes, from a family business to a FTSE100, but there are four areas which we are finding that family businesses are particularly interested in: 

Innovation and diversification

How can a family adapt their business interests so that they have a more resilient portfolio, as a way of protecting the family’s wealth for future generations?

People & talent

With some people really shining through this crisis, owners and management are asking about what they can do to keep and nurture the talent in their organisation. They are also thinking about recruiting nonfamily talent – not just execs but also non-executive directors and family advisors – to shore up their business interests and build resilience. 

The power of good governance and succession planning

Unfortunately, the pace of change and uncertainty has added a huge amount of pressure to families and their businesses, and families are keen to learn from the last six months. There is renewed attention on using governance as a tool to bring both unity and effective decision making. It has also bought the role of the next generation into focus, and in my view accelerated many family’s plans on succession. 

ESG

Families are exploring, more than ever, their societal impact. A subject that is particularly important to the next generation. How can business be a force for good?

All of these issues require family businesses to be really clear on their shared purpose.

Now more than ever the question ‘Why do we want to be owners of this business and what is important to us’ is front of mind for many. Families consider wealth on bases much broader than simply the bottom line, factoring in:

 

  • Communities; providing social mobility, giving back – perhaps through philanthropy, or being involved in local voluntary initiatives or sports clubs
  • Relationships; with suppliers and customers
  • Encouraging entrepreneurship; in the family, the business or the community
  • The business family; supporting and developing people, beyond their remuneration

One of my clients has spent a great deal of time over the last couple of years bringing the family on a journey – defining their purpose, then, importantly, conveying that purpose across the entire organisation.

Another regularly surveys family members to ensure every opinion is considered everyone is aligned.  

Such initiatives help to continually consider and revisit the family and organisation’s purpose. 

It’s more than just good practice. There are certainly commercial benefits to understanding your purpose:

 

  • It gives people a decision framework which supports the creation of high performing teams  
  • It helps convey what’s important to both existing and prospective employees – aiding the   recruitment and retention of the best talent
  • It brings family unity as multiple generations can connect across common goals

And, it is of course a point of differentiation for family businesses now and in the future.

So, if you can’t immediately state your family firm’s purpose, now may be a good time to revisit the business’s vision and goals to seek the benefits of aligning behind a shared purpose.

Interesting