Business families face many challenges, the most critical result from the combination of keeping a family unified and securing control over the family business for generations.
Long-term planning and succession strategies, as well as robust governance, are essential. However, there's an often-overlooked secret sauce to keep the family and the business together: a strong narrative.
Today we talk to Carlos Agustín and Mike Sergeant, two storytelling and governance experts who capture business families' stories to enhance their governance and long-term resilience, continuity, and success.
Thanks, Carlos and Mike, for taking the time to have a chat with Centro LAW. What is your field of expertise, and can you tell us more about storytelling in a family business context?
As a former BBC TV news correspondent and a former family business CEO, we are passionate about the importance of storytelling as the foundation for building a healthy and thriving culture in any family, company, or enterprise.
Storytelling is of profound importance for individuals and organizations. Since the beginning of history, stories unify, persuade and inspire. Every civilization, company, nation, and movement has for centuries been developed and sustained with storytelling. Without a coherent and powerful narrative, it's impossible to build a thriving culture or achieve a lasting legacy.
Over the past decade, storytelling has been used much more proactively by corporations. Neuroscientists have been able to demonstrate evidence that stories trigger chemical responses in the brain.
Understanding the power of stories to excite and motivate, business leaders have become more interested in discovering (or re-discovering) this ancient craft.
Having a clear and meaningful story that captures an organization's purpose and values has become central to 21st-century business strategy design.
How can storytelling support business families towards unity and continuity over generations?
Families that are successful across many generations all have a powerful narrative. The central story typically goes beyond 'what we do' and touches more profound, emotional questions of purpose, culture, and values.
It is a golden thread that runs through time, linking past, present and future. As humans, we look at the main characters in any story and ask: can we see our reflection in them?
For example, if the original story of the patriarch's success is an enduring source of cohesion and unity, then the family business may endure. If the next gens can't see the family story's relevance, they will drift away, and the enterprise may disintegrate.
Each individual will have their story. The question is whether the individual stories align with the broader narrative of the enterprise. If not, then the family business can fall apart.
Look at leading family businesses around the world. Miele in Germany. Roche in Switzerland. Hoare in the UK. They all have a clear sense of story derived from deeply held values. The current generation can adapt the narrative and change direction, but there is still continuity linking history to future vision.
Each new generation will test the story. Is it still relevant? Are people always drawn to it? Does the past bring us together or act as 'baggage' pulling us apart?
No wealthy family can guarantee their continued success in the future. And paradoxically, by only focusing on financial planning and investment returns, their future may be more uncertain.
But a story can elevate their desires with some deeper, more profound, and yet more rewarding impulses. A good story should carry the answer to the big WHY questions. Why have we been successful in the past? Why might we be successful in the future? Why does it matter? Why should I care?
A strong narrative won't be a silver bullet. It won't cure every issue in a family enterprise. But we believe that it is a vital element of risk mitigation, particularly for those families with most to lose.
Can you outline the process to develop a strong family narrative?
The process starts with capturing the stories of the individual family members. The focus is often initially on the patriarch or matriarch.
But other key members also feed into the story-gathering process. Interviews are recorded on video and edited. Then, at a whole-family retreat, the stories are shared and discussed around a real or virtual 'campfire.' Which elements are most influential? What are the most important lessons to come out of the stories?
Coaches will lead this process to assemble the story fragments into a complete narrative. This document captures legacy, purpose, values, and vision.
Anecdotes illustrating these aspects are written up in separate boxes, together with key quotes from the story interviews. This narrative should capture the truth about the family as revealed in their own words.
The process itself is valuable for families. Starting with individual stories, then assembling a narrative for the broader family enterprise will be far more effective than merely trying to define 'values' or 'purpose' by putting random words on a flipchart.
This family narrative can then be signed off and used as a central reference point, as a coaching tool for new or existing family members, as a guide for external communication, or as the preface to a broader governance document, such as a family charter or constitution.
It is imperative not to think of a story as a 'product' – such as a nicely printed book, album, or beautifully edited video. Those all could be the ultimate outputs of the work.
But narrative development should ideally be viewed as a journey that aligns and unites a family. At its best, it might be called a Narrative Governance process.
We would certainly argue that all effective governance frameworks should have a strong narrative element connected with the business family culture. Because, for business families, the story they write today will ultimately determine their future success.
What are the links between culture and family narrative?
In our work with business families, we believe that there are two ways to address culture:
In most family-owned businesses, culture is created from how the business and family dynamics are run over time (reactive approach). In some family-owned companies, culture is considered a strategic pillar of the family. In these business families, culture is designed, developed, and measured (proactive approach).
For those business families that make conscious decisions about their culture's proactive management approach, the family narrative becomes the most efficient asset for bringing culture and values to life, getting lasting success, and family engagement.
At Centro LAW, we believe that wealth and succession planning's human element deserves the most attention. However, conversations can be uncomfortable and reveal vulnerability and tension. How do you encourage dialog and overcome challenges?
We completely agree. Human capital ultimately determines the security of financial capital. Humans are emotional creatures.
For us, stories are vital. Without stories to motivate us and teach us, we drift and often fail. However, true stories don't usually read like a marketing brochure.
Life has its ups and downs. Compelling stories always have vulnerability and tension. Storytelling is an excellent way to process these elements. We are not seeking to mine deliberately for conflict. But to explore meaning in the interplay of characters.
By acting as 'journalist coaches,' we can approach these things through the non-judgmental observer's lens.
There is no magic template to overcome these challenges. Still, in our experience, we have found setting up a shared-values platform to allow family members to address the most critical conversations to be very effective.
If family members share the same values, discussing the most critical challenges will be more comfortable and more effective. The starting point of this shared-values platform is to get awareness about mindsets and beliefs.
In general, what advice would you have for business families to develop their family narrative?
Ask whether the story you are currently presenting to the world or internally is real? Does it have emotional resonance for family members? Is it meaningful? Are people drawn towards it and motivated by it? If not, then it's time to challenge your current framework.
Perhaps your governance system is too legalistic or financial and is missing the human element? Maybe the narrative also feels like a PR exercise and isn't truthful or meaningful? If so, there is the opportunity for a fresh start.
Look at the family enterprises you admire and perhaps seek to emulate. Consider what aspects of their story framework might suit your family structure. Is the most important thing having a clear narrative for the family? Or the family business? Or perhaps a combination of the two.
Story sharing can be fascinating, cathartic, and therapeutic. Whether you are 8 or 80 years old, everyone enjoys a good tale!
About Mike Sergeant and Carlos Agustín
Mike Sergeant
Before setting up his independent business in London, Mike was an international journalist for 18 years and a London PR agency director. He is the author of PR for Humans: how business leaders tell powerful stories – nominated for Business Book Awards 2020 in Sales & Marketing. Mike's career started at CNN in London after he graduated in Economics at Pembroke College Cambridge. He loves outdoor pursuits and is a passionate believer that communication can be a positive tool to help leaders and organizations shape a better future for our world.
Carlos Agustín
Based in Spain, as the Chief Engagement Officer at a global culture transformation advisor, Carlos helps organizations align business strategy with corporate culture. He is a founding member of Family Hippocampus, a peer-group-driven think & do tank focusing on business family dynamics. Carlos held managing director and chief executive officer positions at family enterprises and prompted a family enterprise association. He studied engineering and graduated in systems management. Further studies include sociology and business administration. In his spare time, he enjoys his family, friends, traveling, and sports.
24-02-2021