How to maintain a family’s business legacy.
Marcelo Marini, typing from southern Brazil.
In the last two Fridays we covered Family Business & Family Wealth; Today, we’ll finally cover Family Legacy.
We are in the Family Business for little more than 15 years… The more we research, experience, and try to connect the dots, the more dots are missing.
To paraphrase Michelangelo’s “I’m still learning”…
It’s quite an interesting fact that by doing our research we found out that this quote may come from Ralph Waldo Emerson, but it seems its creator was Seneca; We finally assumed that they were all still learning!
We don’t know what we don’t know…
That’s why we keep an open mind as we are still learning.
We’ve learned it from our father… he’s the best in the field. After reading a variety of books we someday figured that he may never have read a book (at least never told us) so we think that maybe books are reading him…
The missing point.
As for art, invention, and business…we don’t know who is the creator… sometimes the creator is just someone inspired by the creator, and on and on…. the more we research the less we know…
What’s behind the mind that created a family business? What were their values and ethics?
In today’s world, it’s challenging, and you got to be relentless for truth, facts, and the understanding of the tipping point. Because civilization has its time we respect its wisdom and never try to drive in the wrong way… it pushes us to obey certain orders. So every Family legacy has too.
Wise and old Family business owners that read this page will comprehend it best.
We need to connect companies’ values, origins, founder’s values, ethics, pictures, and stories to connect the missing point… then find its mechanics, the way it works, how it works, and how it generates growth, profit results.
To develop a Family Business Legacy you have to listen to the legends and walls. With time it gets clear. Every business has its facts and by being a corporate finance specialist I can defend our view. Why?
Corporate Finance professionals are focused on facts, the why and how – it’s a kind of micro or macro truth. They read the numbers, listen to the walls and get to know precisely – sometimes better than the directors (not saying that it’s my case) – what are the very few things that make that particular business legendary…
So we can connect the old and the new (just a way of looking at the facts – not new projects necessarily)…kind of forget the second and third generation views for a time… focus on what’s important first, and sometimes it can be all we do, maintain wealth and give the opportunity to it flourish without vices or lies, without morbidness, keeping its momentum.
Because we cannot go freely to the future without connecting dots with the past… we need to conquer the future by present actions (right actions)as we should not assume the decision-making processes of a family business to just our thoughts… we need to get to the facts, to math, to its calculations… modeling, projecting, simulating and sum up the knowledge that we have and build solid pillars to its future.
Each individual is important and peculiar, all can be integrated.
But they have to listen to the legends and stories to better understand its culture. Learn to be grateful for it, constantly.
We are talking about companies that have at least 10 years old… so you can have a get better know-how of what’s behind the math and figures. That’s what we have learned and implemented. Having an Eagle-Eye View can be very helpful…get to the facts…understand the business legacy and its strengths… keep a long-term perspective, standards, and high quality… and be customer-focused, because he has the want that needs your product to solve something he wants/needs.
Six years ago we hired a team of corporate finance advisors team, they took only two-three months to know our business better than most of us… they weren’t trendy delusional persons, they were traditional hard-workers… so we took it from there to begin to build our family business legacy.
With facts, we know our core moat, so we can do the right thing for our customers in the long term.
Sometimes we are right, sometimes not, but we have to keep on trying.
Here are some dots we already connected:
We don’t want to get involved with stock market financial professionals, they don’t know anything about corporate finance.
We don’t dream about IPO, selling shares, and looking for partners, it’s not how Family businesses get into the Legacy Hall.
We don’t get advice from financial experts focused on short-term results and quarterly earnings…
We try to not waste money on futile things… our father has taught us by example how to live a frugal life.
A sure thing: we need to learn constantly how to be a keeper of its sacred and keep on working, never surrender.
It can vary but it is something we have learned…as we are still computing its results…