Mission statements for families of wealth: identify the values and reap the rewards

Center for Family Legacy

The term “mission statement” is generally associated with organizations or businesses and is used to articulate why a business or an organization exists. At its core, a mission statement serves these groups as a compass, continually steering them to their goals.

At Truist Wealth’s Center for Family Legacy, we believe a mission statement can also serve families of wealth, providing a similar, essential navigational tool. A mission statement crafted by the family, for the family, can provide guidance when questions seem unanswerable, tough decisions arise or contentious conflicts need resolution.

To be successful, however, the mission statement must resonate and mean something to everyone in the family. The process of establishing a mission statement should ideally begin with a look inward to identify each family member’s personal values and then continue to take a broader look at identifying the values the family members all share.

Although few people wear their values on their sleeve, we all depend on them – whether consciously or subconsciously. Values drive our decisions and influence our choices. Values, inherent in all of us, motivate behavior throughout our lives, establish our fundamental belief systems and lie at the heart of all human relationships. Whether you’re establishing friendships, looking for a job or choosing a significant other, values guide each one of us. When family members become aware of their own values and those they share with their relatives, the family begins to realize higher levels of cohesion, unity and communication. In turn, this open and honest communication between family members leads to greater trust, which helps prevent conflict.

Numbers back up research

So why are identifying values, whether your own or shared, and creating a mission statement so important? The proof is in the numbers. Did you know the odds of sustaining wealth across generations are as low as 30%? (R.O. Williams and V. Preisser, Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values, Robert D. Reed Publisher, 2003).

There are several factors that typically cause this:

  • Breakdown in family communication
  • Breakdown in trust among family members
  • Unprepared heirs
  • Lack of a mission
  • Lack of a family governance system
  • Lack of a strategic plan regarding the family’s wealth

James Hughes, a preeminent thought leader in the field of family wealth, says: “To successfully preserve its wealth, a family must form a social compact among its members reflecting its shared values, and each successive generation must reaffirm and readopt that social compact.” (James Hughes, Keeping it in the Family: How Family Members and their Advisors Preserve Human, Intellectual and Financial Assets for Generations, Bloomberg Press, 2004).

Hughes’ beliefs weren’t always in play. In years past, families with shared ownership in assets were often encouraged to think less of their own personal needs, wants, and goals, and think more about the greater good of the whole family. At first blush, that makes sense. But over time, professionals who work with these families changed their thinking and their advice. They began to highlight the importance of the wellbeing of each family member and the critical role that plays for the family’s overall success.

Family Psychologists we have worked with often say, “A family can only be as happy and healthy as their unhappiest and unhealthiest family member.” Time has taught us the relevance of that statement within the field of family enterprise. Each family member’s personal values and what’s important to them must be identified, considered, and supported in order to maintain a healthy equilibrium in the family. It’s the acceptance, appreciation, and celebration of each person’s individual values that makes their contribution to the family’s shared values so extraordinary. It is through this values work that each family member can see themselves as an important part of the overall potion for success.

How does this all work? 

At Truist Wealth, we truly believe that the process is the solution. Our process engages each family member in a survey, which helps each participant understand their view of the world through a values lens. This allows all family members to become familiar with their values and the values language.

Assessing the responses from each values survey allows us to identify values that are common across the family.

The facilitated discussion that follows leads to stories that describe the behavior associated with the values. This helps the family gain a better understanding of each other, and their family’s shared values.

When family members participate in the process, they gain an elevated level of clarity and understanding of one another and the family as a whole. We have observed that family cohesiveness is greatly improved in families who openly and explicitly discuss their individual values as well as their shared values.

We understand that the process can be hard work – especially in families who juggle opposing views, whether they are religious beliefs, political positions, or other differing opinions.

But it is crucial that families who are joined through shared ownership of assets work to celebrate their individual differences and values, as well as to identify the values they have in common.

“The process of defining mission and values is deeply collaborative and involves negotiation across generations,” says Dennis Jaffe, a leading architect in the field of family enterprise, about the organic and on-going process around a family mission statement. (Dennis T. Jaffe, Borrowed From Your Grandchildren, The Evolution of 100-Year Family Enterprises, John Wiley & Sons Publishers, 2020).

Ultimately, these shared values become the foundation for the family’s mission statement.

The mission statement conveys a family’s purpose and provides family members with representation in and ownership of the family’s direction. Families who take the time to create a values-based family mission statement -- and judiciously employ it -- continually realize benefits throughout their interactions.

The process of drafting a mission statement can be a valuable one, even for a family whose holdings are not very complicated and are in the beginning of their wealth journey.

In summary

  • The mission statement process:
  • Helps individual family members gain a deeper self- awareness.
  • Clarifies individual and family belief systems.
  • Helps the family understand what energizes them, what drives behaviors, and what sparks action.
  • Brings meaning to their wealth, creates alignment, and establishes guidelines and a plan for the future.

In the end, families will be rewarded with far more than a piece of paper. Families who undertake the process to identify their individual values and establish shared values then use them

to create a mission statement will have a powerful compass to keep them on track to their goals. Perhaps more importantly, the mission statement will be meaningful to each member of the family because each member took part in its creation.

Talk to a Truist Wealth advisor or reach out to Truist Wealth’s Center for Family Legacy for more information.