Motivation in the Family Firm

13 Apr 1992

As published in Providence Business News

All too often the motivational aspects of family members in the business are ignored or disregarded. Children often enter the business for a variety of reasons, including to help dad, to save money for the business, to make money for themselves or because finding other employment is difficult.

Regardless of how the family members begin, if they are to develop into top-notch performers, the entrepreneur, the management team and the family will have to work with their unique situation of being family members and employees and later, owners with deep understanding of their special circumstance.

Motivation is an enormously complex process. Two important motivating factors for family employees, are differentiating the family from the business system and a shared sense of purpose in the business.

In the family, hopefully, love and caring is foremost. One’s membership does not rest on competence or productivity. Competence and success in the world is encouraged but not at the expense of one’s membership in the family. Ideally, love is unconditional, and the goals of the family include the development of each person’s self-esteem and the family as a safe and caring haven in the world.

In the business, competence is foremost with incompetence a reason for dismissal. The purpose of the business is the creation of profit and equity, usually in a competitive and turbulent environment. One’s membership in the business in conditional, tied to performance criteria and market considerations. The particular distinction everyone in the family needs to make is that in the family love, caring and membership are unconditional; in the business, membership is conditional on work performance
Assuming that the business is reasonably successful and that the family members active in the business have proven their competence and dedication over time –what will motivate them toward peak performance?

Part of the answer lies in the development of a Family Business Mission Statement and in share decision-making in the business decisions. The Family Business Mission Statement should grow out of a series of family meetings where the family discusses the reasons for the business’ success, as well as the underlying goals and purpose of the business with particular attention to the values and cultural norms of the family business.

The following excerpts from “Smith” Family Business Mission Statement give an example:

• We wish to continue the family business for at least one more generation and provide opportunities for future generations.
• We resolve to talk through our differences, respect each other’s rights to disagree and strive to come up with solutions that are satisfactory to all. If unable to do so we will pick and outsider and agree to abide by his/her decision.
• We will reach out to each other as family members, regardless of conflicts or animosity that develop in our business relationships.
• We will promote the values of honesty, integrity, competence and compassion in our dealings with each other in the business and the family.
• We will encourage each member to strive to his highest level of competence, honestly appraise each other’s performance, and support continued development for each individual.
• We will utilize non-family members to promote objectivity and help us see the forest from the trees.

The development of a Family Business Mission Statement created jointly by all family business members not only clarifies goals, purpose, values and cultural norms underlying the business, but also motivates the family employees in their work performance.

Marc A. Silverman has been consulting to family businesses in New England for over 10 years and has offices in Providence and in Plaistow, NH.