Insight 8: Work Together to Build a Better World

The philanthropic spirit is the key component of the whole thing to make sure that we never forget where we came from and that giving back is a key thing in the puzzle, and that’s not only an opportunity to a certain degree — it’s a family obligation.A key question preoccupying generative families is, when you have great wealth, what is it to be used for? The whole family is concerned about the impact of their wealth on the world and how their business and resources make a difference in the world. Rising generation family members, particularly, are often less interested in the family enterprise unless they can work together in service of a larger social impact. The generative family sees social impact not just as philanthropic activities, but in the values they espouse for their investments, and the environmental, social and governance responsibilities of their businesses.

This spirit takes several forms in business families:

• Philanthropic efforts, including creating charitable foundations, as a family and with the business
• Defining social responsibility and affirming values for family enterprises
• Impact of investment and aligning values and profitability

While these seem discrete and different, a generative family sees them as connected and finds ways to have social impact in all of them.

By the third generation, the family focus often shifts to social values and activities done by the family as:

• A visible way to give back and create a sustainable future for their grandchildren;
• Shared passion that draws new family members together; and
• A setting for next generational learning and development.

These activities align the public and private family; the personal commitment of family members gives the family meaning and identity, and this identity becomes a public statement of who the family is and their social commitment, as these two accounts illustrate:

You have to decide what and how we’re going to create added value for humanity, for people. Then we come back to responsibility — if the family decides you have to maximize making money, that’s easy and then you can do anything. My grandmother always told me: never do it for money because you will never be successful or have enough. You create added value for the people around you. If you do that well and better than anybody else, then you will make money.

Money is a consequence; it cannot be a target — maximizing shareholders’ value to me, the whole free market economy. Our company should be part of the solution of the world problems, not part of the problem. And I hate the rules of Wall Street and our attitudes to always make more money. This is not business; this is a casino. It goes back to being in there for the long term. We’re best placed to be the champion of sustainability, and I’m sure that others will follow. We’re still under the radar. But eventually with the new balance of power, those who really add value to the world will be appreciated — well, that’s the belief, the faith. But it’s also a necessity to keep our free market economy alive. If I listen to my grandchildren — that they are also balancing between having a good life and having fun and doing that in a sustainable manner. I think the next generation will be a partner in that effort, that ambition.

The family’s values can be expressed through philanthropy, corporate social responsibility and impact investing. These activities offer pathways for the family to work together across generations while serving others; they can even furnish career options for young family members.

A common theme among our generative families was gratitude and responsibility to give back. A family philanthropist notes, “The first question I always ask is, tell me why you’re doing this? It all starts with a sense of gratitude. They feel there have been blessings and gifts they’ve received. They’re grateful for those gifts, they’re grateful for those who made them possible, and they want to give back.”  One family leader echoes the sentiments of many in expressing the naturalness of this attitude, “Earlier generations made a lot of money and gave back a lot of money. So, this is a family value that has endured — we’ve always had a foundation and always contributed to the community. We reinforce this by having a community service project.”

The visible and tangible expression of values in the community has a deep impact on the family as well. The giving focus offers a way for the family to contribute to projects that make a difference by working together. They are a pathway for involvement that offers opportunity for family members who are not part of the business, and a way for the family to build positive connection and express who they are. Family philanthropy and social purpose are held as the core reasons that a family is able to sustain unity and commitment across generations.

Generative families extend their definition of family to include nonfamily advisors, employees and community members. “We offer a decent job to more than 1,000 employees on our farm and help their families put food on the table. To make our surrounding community healthier and more secure, we are constantly looking for innovative ideas to give back and help decrease unemployment.”

Working together as a family to do good, particularly in one’s community, becomes a powerful win-win, benefiting not only those to whom the service is directed but also the family as a whole. It deepens family relationships and brings families the joy of making a positive difference in the world. This is particularly impactful for the rising generation, giving them a sense of their ability to effect positive change in the world.

Some families tend to go on service vacations, offering help in community projects. One family recalls a trip to China with some as young as preteens. They saw the social challenges facing China in the early stages of its development. It was a trip that became a learning touchstone for the family, helping them define a global focus for their philanthropy.

Our research found that successful families who survive beyond their third generation attend to the care and development of their family and their business. They consider this internal investment one of the most important ways to use their wealth. While business savvy and adaptability are important, they view the foundation of future success lying within their extended family and nonfinancial capital — including the development of the character, capability and commitment of each new generation.

Learnings from long-lasting global business families

Model giving and service early.

The family demonstrates commitment to service in their community by doing projects together, by sharing projects and commitments by the family, and by talking about what is needed in the world.

They teach their children to contribute financially and personally.

Define values outside of business, focusing on the world we want to see.

Families talk about the challenges, inequality and pain they see in the world, and their own role as people with advantages to make a difference. They talk about the responsibility and expectations they experience, and what a responsible person can do to make the world a better place. They encourage each person to define their own values and take steps to make them real.

Create projects that have meaning for the family together.

The families expressed their shared values by taking on specific projects, where they contribute resources, time and energy to make an impact. They align over several shared goals and enjoy working together to contribute. This provides an opportunity for generations to work together.

Tie business to social goals and values.

Their values are not disconnected from their business and financial behavior. They want the values and behavior expressed in their economic activities to be aligned with their values. They look at the social impact of their investments, their business behavior, and actively seek ways to increase their positive impact on the world.

Introduction: 8 Insights From Long-Lasting Global Business Families

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