What are Family Business Mission Statements?

What is a Mission Statement

Interview with Jay Hughes and Barbara Hauser:

A Mission Statement is a declaration of what the family’s goals are and what they want to achieve. Many families assume they must begin their governance work by having a Mission Statement. The Family Office Association recently interviewed Jay Hughes and Barbara Hauser about their views on Mission Statements.

How common are Mission Statements?

James (Jay) Hughes: These days, Mission Statements are fairly common. People have been applying them for long enough in the field. Consultants who come from corporate America coaching like to try to bring ideas that work in the for-profit sector to business families. There are many, many consultants who produce these approaches, who would like family business clients.

They develop tools like Mission Statements for organisations that have a common purpose — profit — and try to carry that over to families. But families do not have a common purpose. Families are groups of individuals — by choice or origin — who have individual purposes, and who may be able to find a common purpose.

Barbara R. Hauser: I agree. I’ve always had a problem with the whole idea because the craze of Mission Statements came out of the corporate environment. In the corporate context, those were voluntarily put together by teams of unrelated people for the company — in a family setting, you don’t have a voluntary collection of unrelated people, so why do you even have the idea of needing a mission for a group that is, by definition, already formed? Why should they need a Mission Statement? It never made much sense to me.

Corporations are charged with achieving a specific corporate goal, such as becoming the number-one seller in widgets. But companies are voluntary groups of people; they are not related. No one imposes a goal on a family group. What I find interesting is to help the family verbalise what it wants to achieve and why and help them get there.

Yet the “best practices” type families try to have a Mission Statement. In my own view, they could even do the family harm. If the family is checking it off their list and if it wasn’t done through an organic process coming out of the family members themselves, then it wouldn’t have value at all. The negative would be that the family felt it had taken care of one of the blocks of the governance process and not look at it again. Jay and I agree on the importance of families learning to make good decisions together.

However, I think that there is a role for a type of Mission Statement. When I work with a group of family business owners, I will ask them, what do you all want to achieve? What choices could there be to keep the business in the family for multiple generations, or to get the business ready for sale or for a public offering? Those are the kinds of decisions to get ready for the family group to consider. I ask them, “What’s your own goal?” “Why are you bringing me in?” I’d work from there. So if that’s the family’s goal, if that’s where they need to end up, I guess you could call that its mission.