Our Co-Founder Christian Ihre provides his perspective on why family-owned companies, in spite of being inherently purpose-driven, can benefit from a structured approach to corporate purpose.
Family-owned businesses
The power of purpose
Family-owned businesses inherently embody many of the advantages that corporate purpose brings, such as clear core values. But sometimes, with expansion or with generational shifts, things get lost in transition.
By defining a purpose for a family-owned business or conglomerate, it can be deployed to drive change internally, identify business opportunities, or catalyze growth.
My best reasons why purpose works so well at family-owned businesses and conglomerates are:
01
One of the reasons family-owned companies often outperform their peers, is their ability to think and act with a long-term view.
A clearly defined purpose statement explains not what the company does but why it does it. It becomes a powerful tool in long-term business strategy.
02
Another hallmark and competitive advantage of family-owned businesses is their strong set of core values and distinct company culture.
A well-defined purpose will provide motivating values, mirror the family’s beliefs, and cut through complex business structures. Especially for large family-owned conglomerates, this is a way reap the important benefits of being family-owned.
03
Family-owned businesses, more often than other companies, think beyond profit. They support and enrich the communities that sustain them, which fosters stable business environments, bolsters credibility with partners and legislators, as well as cultivates employee loyalty.
A corporate purpose effectively embodies this stewardship mindset and also provides ways to engage the organization in community initiatives.
The purpose is very often the verbalization of why an organization exists. It doesn’t necessarily have to include a vision but rather a reason – it’s existential reason.
Defining purpose
A purposeful company is best described as a company that has an honest intention to lead positive change. This means that the company defines its contribution beyond maximizing shareholder return, to also integrate an intention to contribute to societal advancement.
Proven benefits
The top three organizational benefits of a clear purpose are:
01
How it helps companies stay on course and be true to their long-term reason for being.
02
How it motivates employees in all parts and at all levels of the organization.
03
How it creates superior efficiency in the collaboration with partners, as everyone is drawn to work with those that stand for something greater than their business operation.
—What is striking is how it not only engages and motivates the organization. Done right, it is a surprisingly powerful catalyst for business growth.
How we can help
At Lynxeye, we assist family-owned businesses in reconnecting with its inherent purpose. We find it, define it and deploying it where needed in the organization.
Our expertise also extends into helping owner families capitalize on purpose by transforming foundational values into business ideas that resonate with customers and the market at large. It is a powerful catalyst for business growth.
Written by
Christian Ihre
Let’s talk about how we can help your family-owned business.
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