The Ninth Commandment Of Family Business Succession: Pass On Your Values
Recently, I was involved with a few family businesses of which the founders were values-driven, not money-driven. They gave back to their communities, even when they didn’t have much to share. They were ethical, honest, upstanding citizens, yet their businesses descended into the abyss of deceit and bitter inter-familial, dysfunctional relationships.
Did the founders not believe that family values and business ethics were important? Of course they did!
So what happened?
Family members tossed those values out the window, disregarding the important messages they were to have learned and integrated into their lives and into the business.
I believe that there are some key lessons to be learned here. I will share with you a story that happened many years ago. Though there are some minor changes, the lesson is quite apparent.
In the late 1800s or early 1900s, a peddler immigrated to the USA from Eastern Europe and was able to start a small pushcart business. It eventually became a store that eventually became a very large and successful chain.
The founder was of the Jewish faith and built his business with faith-based values. The "10 Commandments" were sacrosanct. Family values were holy.
One of the unique customs that the founder committed to was keeping his stores closed for the Sabbath and Jewish holidays. If you think back to the early 1900s, this was quite an accomplishment, but it showed his employees, Jewish and non-Jewish alike, that faith was non-negotiable and a core value.
The founder, getting older in age, decided to incorporate this into the charter of the company. He knew it was a given that the Sabbath was a day of rest and that stores were to be closed, but Jewish holidays were not. So he put it into the charter of the company: On Jewish holidays, stores are to be closed.
Years went by, and the descendants of the founder eventually weren’t as committed as the founder. As the company's charter was to be closed on the holidays, nobody dared to change the founder’s wish. Ironically, they decided that the Sabbath was a very important business day, and as the founder never explicitly included the Sabbath in the charter, they decided to keep stores open on the Sabbath.
What I learned from this story is that the family neglected to focus on the founder's basic beliefs that family values were holy and the day of rest was a day of rest — a time for prayer and family. The founder thought that this was a given. But as someone once said, it’s common sense, but not common practice.
My very dear friend (Paul Silberberg) shared with me his grandmother’s ethical will. The power of the will was that it spelled out everything that she believed was important to her and to her next of kin. I believe the success of their family lies in this ethical will, as it imparts