Article originally hosted and shared with permission by The Christian Economic Forum, a global network of leaders who join together to collaborate and introduce strategic ideas for the spread of God’s economic principles and the goodness of Jesus Christ. This article was from a collection of whitepapers compiled for attendees of the CEF’s 2018 Global Event.

— by Philip Clemens

The average family business lasts 25 years. Only 30% of family businesses go from the first generation to the second; only 12% go from the second generation to the third; and less than 4% go from the third generation to the fourth. What has allowed our family business to go into the sixth generation—to survive for 123 years and have in excess of 325 family shareholders?

Are we just lucky? No, I don’t think so. Did we do everything right? No, I know we didn’t. So, how did we do it?

First, I need to admit we made many mistakes and came very close to becoming a statistic like most family businesses. Second, we weathered many storms through our strong faith in God and our view that the business was not ours, but God’s. Finally, by becoming very intentional, we clearly understood the pitfalls and had many very honest and hard conversations.

Every family business is made up of three unique entities: family, owners, and business. Most all family businesses begin with these entities looking like one when in reality they are three. Enmeshing them into one ends up confusing everyone because you wear a different hat in each entity. In the family, most times it is a parent hat; in ownership, you wear an owner’s hat; and finally in business you may wear the leader, president, CEO, or another hat. Each hat has different responsibilities and rights.

Many family businesses that fail are victims of one of the pitfalls. Communication is a major pitfall. Communication is complicated because of the lack of understanding about which hat you wear and which hat the recipient is wearing. Another major pitfall is an entitlement mentality assumed by many family members about what their role can and should be in the business. Lack of accountability is also another major factor in business failure. This list could go on and on.

I find there is one common thread in every family business that has failed. In fact, it is a seven-word phrase written on the tombstone of every failed family business: “We never did it that way before.” This is a failure to change.

After 100 years in business, we have discovered a major secret that allows us not only to survive, but also to thrive:

We changed our focus from being a family business to being a business family.

These two models are mirror images of each other. One will work; one doesn’t. Making a change from being a family-first business to a business-first family is very difficult. As a result, many families choose to end their business either by selling the business or by watching it die a slow death.

To better help you understand the differences between a family-first business and a business-first family, let me explain the distinctions.

In a family-first business, family members feel they are entitled to a job and sometimes even to a title in the business. Some families actually mandate that their children join the family business or become ostracized from the family. Family who are employed by the business rarely have the same rules of employment (salary and benefits) that other non-family employees are required to follow.

Leadership in a family-first business can take some extreme forms. For some, only a blood-line family member can be the leader; others only allow the oldest male child to lead the business; and there are many other variations to this. Some family-first business, however, allow non-family to lead the business. In either case, the consistent factor is that family always chooses the leader.

Finally, and most important in a family-first business, the main goal is family harmony. We all must get along. Profits are always at least secondary. This model is a non-sustainable model but is the one followed by about 80% of family businesses.

A business-first family desires to have family members employed by the business. However, in order to be hired, you must be qualified. You don’t get hired just because you have the right last name, you’re an owner, or you’re a friend or relative of the owner. All employees hired by the business need to be qualified.

When it comes to leadership of the business, it is always the most qualified. If that is family, that’s great; if it’s non-family, that is OK also because we know we are being led by the most qualified individual.

In a business-first business, all employees also have the same work rules. There aren’t different rules for salary, promotion, benefits, etc. for employees. Family members who are qualified to be in the business only get to wear one hat: employee. It levels the playing field for all employees.

In a business-first family business, the business is there to give a fair return to the owners. Often in a family-first business the family feels they are there to help the business, regardless of whether they are employed by the business. It’s a bit like the IRS knocking on your door and saying, “I’m from the IRS and I’m here to help you.” All of us can do without this type of help. In a family-first business, the family members barge in the door and say, “I’m from the family and I’m here to help you run the business.” In this scenario, family are as welcomed as the IRS.

Finally, in a business-first family, the main goal is profitability. Profits are both expected and respected. As a result of being profitable, you can then work on family harmony.

These two models are mirror images of each other. Business-first family businesses are often seen as family business when in reality, they are just the opposite.

In my family’s business, our success has come because of several important factors.

1. First, we are a mission-focused business. Our mission is: “We aspire to operate in a way to honor the Lord Jesus Christ as demonstrated through ethics, integrity and stewardship.” We define ethics as “I’ll do the right thing”; integrity as “I’ll do what I say”; and stewardship as “I’ll build a foundation for the future.”

2. Second, we are firm believers in accountability for everyone. Our management team is held accountable by a Board of Directors that has a majority of independent directors who are very qualified individuals. Board members must be leaders in another organization, have no conflict of interest with our company, and embrace our mission and culture. No employee is permitted to serve on the Board except the current CEO. Accountability is critical.

3. Finally, we have adopted a servant-led mindset. Leadership is focused on serving, not being self-serving. Leadership is there to serve our team members, customers, community, and shareholders. Servant leadership puts others first but does not abdicate the responsibility of leadership.

It is possible to be successful for multiple generations. It takes hard work, the willingness to risk relationships, and a strong desire to do the right thing.

In Part Two with Chip Ingram, CEO of Living on the Edge, we find Rusty asking Chip to give his take on a previous mailbag question from an entrepreneur who didn’t see the value of church anymore as what comes out of the pulpit isn’t relatable to his life. While Chip agreed that most pastors aren’t very conversant with the entrepreneur’s life, he flips it from a what do I get to what can I give mode of thinking. He encourages entrepreneurs to see church as God’s company while acknowledging the frustration of not seeing change or progress fast enough. Henry has Chip share on some practical ways of how Pastors can love on the entrepreneurs in their midst before William tackles the subject matter of entrepreneurs struggling with failure, sometimes even a series of failures. Chip tells us that God must first work in you deeply before He can use you significantly. Rusty closes this week’s episode asking Chip to give listeners perspective on how to use power righteously. Chip’s response: it’s about stewardship.

We hope you receive encouragement as well as insight from Part Two of our time with Chip Ingram. We’d like to hear from you on how you are stewarding the power and influence God has given you and how you’re overcoming the temptation of self-reliance in the comment section below.

In Part Two with Chip Ingram, CEO of Living on the Edge, we find Rusty asking Chip to give his take on a previous mailbag question from an entrepreneur who didn’t see the value of church anymore as what comes out of the pulpit isn’t relatable to his life. While Chip agreed that most pastors aren’t very conversant with the entrepreneur’s life, he flips it from a what do I get to what can I give mode of thinking. He encourages entrepreneurs to see church as God’s company while acknowledging the frustration of not seeing change or progress fast enough. Henry has Chip share on some practical ways of how Pastors can love on the entrepreneurs in their midst before William tackles the subject matter of entrepreneurs struggling with failure, sometimes even a series of failures. Chip tells us that God must first work in you deeply before He can use you significantly. Rusty closes this week’s episode asking Chip to give listeners perspective on how to use power righteously. Chip’s response: it’s about stewardship.

 We hope you receive encouragement as well as insight from Part Two of our time with Chip Ingram. We’d like to hear from you on how you are stewarding the power and influence God has given you and how you’re overcoming the temptation of self-reliance in the comment section below.

Photo by Matthew T Rader on Unsplash

In this Monday’s video, we take a look at Weifield Electrical’s amazing work to end poverty in Denver — through its hiring. The company offers 4 years of job training and a long career to those out of the penal system. A win for the company’s own workforce development but as Karla Nugent (Partner and Chief Business Development Officer) emphasizes — it’s a second chance for someone to get their life back on track!

That company belief rings most beautifully through an employee’s words “They (Weifield) treated me like a normal person rather than a convicted felon.” What redemptive work!

Enjoy this 4-minute video where Colorado Governor, Hickenlooper, introduces and praises the company as further testament to Weifield’s impact in the community.

QUOTES:
“We build amazing buildings and we have amazing clients. But in the end, these lives that we’re changing … that’s what it’s all about.”

“Work is work and faith is faith but really your faith is every hour of the day. I would encourage any person that has an area of influence that they consider it… because it’s revolutionary.”

“If every company could partner with a NGO and give to them their time and talents, what an impact that would make for our community.”

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Special thanks to Fachy Marín on Unsplash for the cover photo.

— by Patrick Lowndes

The following post was first published on patricklowndes.com by our friend Patrick Lowndes.

In this final post, I’ll get into the implications of living in the spotlight, dealing with compromise and aiming to leave a kingdom impact. Let’s jump in.

Living in the Spotlight

When you’re watching football or basketball it’s common to fix your eyes on whoever has the ball. They are in the spotlight. When you tell anyone that you love and follow Jesus, you place a kind of spotlight on you. People already carry around a stereotype of what you should be like based on experiences they had with other “Christians”. They might have just relied on the negative narrative in the media or social circles. In some cases, people are just looking for evidence that their label of a “Christian” has been validated with yet another data point. Don’t we do this for stereotypes we have about others as well? That’s a separate topic.

This reality gives me pause. I don’t litter my car with Christian bumper stickers, because, I’ll admit: I haven’t fully brought my driving under the lordship of Jesus Christ. More bluntly, I don’t want to tarnish the name of the Lord in my weaker moments of bad or “assertive” driving. (I justify myself because I used to be an “assertive” city bus driver while in college).

In the workplace, especially as a leader, I’m very aware of my ability to tarnish the name and reputation of Christ. Making decisions, building the product, working with customers, and caring about life outside of work are all opportunities to show people who Christ is and what His Kingdom is about. Ask yourself this question: How am I helping or hindering people experience the goodness of God in the workplace? As my pastor challenges me with often, “What do you see left ‘in your wake’? How do people experience you as a leader and what do they think about you after working with you?” Is it a good taste? Or not?

Since you and I are not Jesus we will often fail the “what’s left in your wake” test. But isn’t that part of the good news as well? As difficult as it is to admit and face failure, it presents the chance for us to point to the Gospel of grace. We can highlight how God made a way for failure-prone children to still enjoy relationship with Him – through repentance and faith in Jesus. Our identity is not in our performance, but in Jesus’ perfect performance on our behalf. That is good, refreshing news to a stressed-out worker who is constantly evaluated by their performance.

Compromise, Shortcuts & Regrets

Gray areas. How do faithful founders handle them? I’m regretful that I didn’t do as good of job submitting these quandaries to the Lord as they arose. Why do we like to cut corners to get our way? Is it laziness, … greed, … frustration? Why do we justify and explain away our decisions so easily without going to God with the quandary – believing that He is a rewarder of those who seek him? I regret not pausing and holding these things before the Lord in prayer more diligently.

While we made some good decisions to not hire certain candidates, we had an experience that I wish I could go back and redo. We hired a generalist to fill the shoes of two specific roles we needed to fill. Being in a high-performance role we defined what levels of success were, but we failed to clearly define what failure was. We needed to test the skills earlier on to help the person focus on their deliverables, but I got them distracted. When I looked up, I realized how little progress was made on the bigger goals and I didn’t have enough time to help the employee improve. That resulted in a rather abrupt performance improvement plan and the employee was unable to hit the milestones we need to hit.

Good leaders help their employees succeed and provide the arena for them to improve. Given how cash-strapped we were, I didn’t have the time and space for improvement, making the departure a difficult and tear-filled last day. I admitted my shortcomings, but I also had to make a business decision as well. That was the most painful day I experienced as a manager. Faithful founders need to own up when they screw-up.

While the firing decision couldn’t be reversed, we did decide to offer a reasonable departure package (for a startup to give) to help the employee through the transition. Caring for people beyond your obligation is another way to live as a faithful founder – although I fear all the times I only did the minimum required.

Lasting Kingdom Impact

I’ll write more on this topic later, but faithful founders keep their eyes fixed on the goals of God’s Kingdom. Not the goal of starting or running a sustaining or successful business, but that of making a mark for the King and His Kingdom in a world that is dying without hope and needs Him badly. They need to experience the grace, the patience, the justice, the sacrificial love and strength that comes when you’re following the King of all kings. But where does this impact happen, and how?

Kingdom impact can happen on a personal level, a community level, or even an industry level. For those of you working in a busy high-tech city like Seattle, or San Francisco, or New York, you likely have the challenge of slowing life down so people can feel and face the emotions of life. You might need to show entrepreneurs the freedom from their “slavery to succeed”. You might want to show off a workplace that highlights showing grace to each other and working as a team, instead of inflating individual status or ego. You might aim to be a purpose-built business that focuses its efforts on an underserved or overlooked population in your community.

For those of you reading this who intentionally built your companies in locations that are less developed, you have the chance to bring economic prosperity, vitality, innovation, and service to this community, city or nation. When you show-up, create wealth, jobs and care for people in ways that most other outsiders wouldn’t care about, locals take notice. When your light shines brightly before men, for the good of the people you are employing, the customers you’re serving and the community you’re building up, people will being to praise your Father heaven (Matthew 5:16). That is what Kingdom impact is all about. There is a transformational impact and a spiritual impact happening at the same time.

But how we accomplish this if we’re not ready to give a reason for the hope that we have?

Acknowledging Christ

“Anyone who acknowledges me before men, I will acknowledge before my Father in heaven, but anyone who does not acknowledge me before men I will not acknowledge him before my father in heaven.” Matthew 10:32-33

How do you feel about those words of Jesus? Are you acknowledging Christ in your business, for His grace in giving you the skills or opportunities you have, the favor you’ve received in the marketplace from new customers or partners, from governments or economic authorities?

If we don’t acknowledge God’s grace in developing a product, meeting deadlines, delighting and serving customers and generating revenue, who are we bringing glory to? Just to ourselves, or only to our team, or even to luck?

Good leaders should praise the accomplishments of their team and draw attention to the ones who help you realize your dream. But who gave you that team? And how did all of the pieces come together at the right time to make it happen? You might not have the liberty to speak openly about the Lord on public stages, but some of you do. Others can look for ways to share what God has done in the smaller venues or in conversation.

When is the last time you sat back and observed the evidence of God’s grace active in your business? When was the last time you internalized and meditated on that? When we realize how God is at work, we will more naturally point to this reality along the way.

At the celebration dinner post-acquisition, we made it a point to thank a bunch of people who helped us achieve a success. We honored the team and family members who were there as well. But we spent the last several minutes thanking Jesus for how God’s Spirit had united us together as founders, gave us success the way He did and showed Himself faithful to us in the process.

Final Thoughts

There have been times when I excelled in these areas and other times when I face-planted. Amidst it all, I encourage you to honestly evaluate how well you’ve acknowledged the Lord before people. Ask him to highlight areas of compromise in your life; go ahead – I dare you.

What areas have you not fully surrendered to Him? List them out and confess them to God. Deal with your Creator, who faithfully founded you long before your heart ever started beating. The answers He gives will be sobering, but eternally rewarding.

Once you do, you will find the same joy that the Apostle Paul found, when he worked the marketplaces building tents but also drew people to God.

Perhaps one day, you’ll look back on all those hours you spent “working your job.” After the money has been forgotten, titles have disappeared, and customers remembered no more, you will see all the souls of people who were affected by your living. Some might have even come to faith in Jesus because you decided to live as a faithful founder. We can see some of the fruit of our labor in the short term, but ultimately, what will God say when you meet Him at the end of your life? We all hope to hear what the Master told his faithful servant:

“Well done good and faithful servant. You have been faithful with a few things; I will put you in charge of many things. Come and share your Master’s happiness!” (Matthew 25:21)

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Editor’s Note: If you liked this piece from Patrick, we encourage you to check out his other FDE blogs:

FDE Blog – Faithful Founder (2 of 3): Employees, Investors, Customers & Prayer
FDE Blog – Faithful Founder (1 of 3): Motivation, Co-Founders, Values & Family
FDE Blog – Founder’s Manifesto

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[Special thanks to Zac Durant on Unsplash for the cover photo.]

— by Patrick Lowndes

The following post was first published on patricklowndes.com by our friend Patrick Lowndes.

In part one of this series, I focused on the foundations and motivations of being a faithful founder. In this post, I will unpack how those things are put on display throughout the workday.

Let start off with a somewhat contentious topic about how followers of Jesus should conduct themselves in the workplace.

An Integrated Person

In the western world, we tend to compartmentalize our lives pretty drastically at times. In one setting, we are a passionate student of Jesus, and in another, we’re a soccer player, and in another we’re just an employee, working our eight-to-five job. Even though we have many roles in life, we must not segregate our faith away from our working hours. Said differently, we must not elevate our identity of “worker”, higher than our identity of son or daughter of God. Let me unpack this a bit more.

Even before you are an employee of XYZ company or an American citizen, if you have submitted every part of your life and faith to Jesus as His disciple, and He your Lord, then you are first and foremost a citizen of heaven. Since we are ambassadors of that heavenly kingdom, we have a duty to “let our good deeds shine before men that they would praise [our] Father in heaven”, which is found in Matthew 5:16. Jesus’ parting words to his disciples before leaving earth were to share his message “as you go” in the different areas of life – like at work. Another angle on this is found in 1 Peter 3:15, where Peter writes, “Always be prepared to give an answer to anyone who asks you to give the reason for the hope that you have. But do this with gentleness and respect, keeping a clear conscience…” This means that God wants us to be an integrated, person in our daily walk. What does the world think about this?

In recent years, many in the corporate world have praised colleagues who declare, “I am the same person here at work that I am outside of work.” People often want to experience the most “authentic you” you can bring to work (footnote: Seattle might be a little overly open compared to other areas of the world). This is why, if we truly call ourselves a faithful disciple of Jesus, we cannot be silent in the workplace, at lunch or events with co-workers about what matters most to us. It would be disingenuous to omit our faith from the conversation. If we struggle with that thought, we may need to invest more time in our own walk with God to see why our desire doesn’t align with His command.

Most full-time workers spend 50-60% of their waking hours on earth in the workplace (9-10 hours including lunch). When we stand before the Lord one day and give an account for how we acknowledged and represented him during these hours, what will we say? Do your co-workers know about your love God? Do they feel served and cared for by you? (more on this below) We must find ways to love God and make him known in every arena of life – from the home to the workplace, to the soccer field to the grocery store and every other place we find ourselves.

The Bedrock of Prayer

As believing co-founders we often prayed for our fledgling business, trusting the Lord for sales, partnerships, employees and capital investments. We prayed for more love to serve and care for our customers and our employees with all the situations they faced. We also prayed for ourselves as we faced the throes of startup life – reminding each other that our identity is not in our performance, but in the perfect life that Jesus already lived. These times were usually only 15-20 minutes, but they were a powerful pause in the busyness of the startup world. We acknowledged how the Lord was working, even in ways beyond our control and we would point to Him when He showed up in the results.

Since prayer was key to each phase of founding, building and selling the business we could speak openly, praising God about how He had responded to our prayer – despite our challenges and shortcomings as founders (more on those in a few sections).

Pastoring Diverse Employees

Diverse teams outperform homogenous teams with 35% higher likelihood to deliver results above average than homogenous teams (HBR article). Especially if you’re a Christian, you should be seeking to hire not-yet Christians to put God’s love on display for those who likely won’t set foot in a church building. Even well-meaning Christians need discipling & mentoring to follow the Lord in the workplace – if they are open to it. Try to strike a good balance of building in diversity where possible. You’d be surprised by how many opportunities arise to show care for and encourage not-yet Christians in your workplace.

As a CEO and a manager of people, you have a duty to hire people equitably and in alignment with HR best practices (not showing favoritism or disadvantaging employees because of their race, religion, gender, or sexual orientation) in line with being an Equal Opportunity Employer. Although we weren’t the shining example of the most diverse team, we definitely made an effort to draw in people with different views than our own.

Because we mentioned our gratitude towards God and pointed to God answering our prayers, it became natural to offer prayer to our employees when the situations of life were hitting the fan in their lives. This was one way to “pastor them” and show them the Kingdom against other toxic work environments they’ve worked in – or bad leaders they’ve worked beneath.

As VMware CEO, Pat Gelsinger, shared in a sermon, he views himself like the pastor of a mega church – referring to the massive software company of 19,000 employees. To be clear, CEOs are not the literal “Pastors” of their employees and businesses do not submit to the biblical structure that is required for God’s church (Gelsigner agrees). However, I do admire how his pastoral mindset influences the way he leads. He recalls the stories of praying for employees who bring hardships to him and respectfully getting permission to pray for them. He is blessing them and acknowledging the Lord as the source of that blessing. This picture has inspired me to care for or “pastor” my employees as much as they welcome it in our relationship.

Serving Customers with Great Experiences

Any good and lasting business will serve its customers well and make sustainable revenue while doing so. It’s a delicate balance to achieve both. Early customers often need more attention than you planned for in your cost model. Since providing great service can be at odds with sustainably making money, you’ll often have to make difficult decisions about that trade off.

This is why it is so important to run your business in a way that meets a real need and does so in a profitable fashion. Are customers delighted by your product or service? Are they grateful when you speak to them? How do you accept and apply feedback from customers to serve them better? Are customers excited about the outcome your product or service has created for them? Have you really enriched some part of their lives? You know you’re delivering great customer experiences when you hear customers say, “Wow, this is amazing!” or “You’ve just made my life a whole lot easier. Thank you!”

You know that Jesus was a craftsman and a stone-builder (likely not a carpenter: read this). As Jesus worked His craft, I wonder how he served His customers? Did He not see them as people who God called Him to love? People who needed the kingdom of God as well. Our motivation to build great products and services stems from the two greatest commands – to love God and to love people. That’s why part of our daily and weekly worship of God is finding ways to serve and love our customers, with the same love, precision and excellence that Jesus likely served His customers.

Let’s finish this post on an important topic for every founder.

Relating to Investors

Scripture teaches us in Proverbs 22:7 that “the rich ruler over the poor, and the borrower is slave to the lender.” Wise business leaders carefully consider their need for cash. Do I really need the money? Is there a way to bootstrap this business, or minimize dilution? If you’re developing hardware, or dealing with raw goods, you might have a high cost to startup.  Software businesses, on the other hand, require far less capital to launch. If you decide you need capital, you’ll have to juggle the tension of striving for funds and discerning compatibility at the same time.

Faithful founders listen to God’s Spirit while they meet investors, paying attention to when yellow or red flags appear in the investor. There was a specific investor that I stopped pursuing because he said, “If sales are hurting, see your family less.” Red flag went up. I thought to myself, I would never want to take this guy’s money.

As a CEO friend of mine advised me, “Don’t hook-up your wagon to horses that are running in a different direction than you want to go. Their money is not worth the pain you’ll experience in working with them.”

Once you’ve found investors you trust, agree with and signed-up with, you’ve found a great thing. But after the money has been transferred and you’re three, six or nine months down the road, you should ask yourself these questions:

• How do they feel about the business you’re building and the value you’re creating in the market? Are you building their confidence or eroding it?

• Have you laid a foundation of trust that helps you share honestly about your challenges?

• Are you coachable, and asking for feedback – or are you stubborn and avoiding questions or obfuscating the answers?

Faithful founders put their walk of faith on display even in their relationship with their investors, advisors, and mentors. I think we’re often intimated by investors because of our fear to lose investment, to lose the power they represent. What does this say about your faith and trust in God and His wealth, His influence and His power? Seriously, who are you more impressed with? a mere man or woman with a tiny sum of cash, or the King of all the universe, who owns every penny and with His power maintains the feeble & short-lived lives of all people in the palm of his hand? The answer to that will help you see what you really value in life and whose approval you’re trying to gain.

Certainly, not all investors will want to talk about spiritual things, but when you bring up how you’re relying on God and thanking him for favor, they should respect your faith as important part of the integrated person you are.

Let us not forget this truth from Colossians 3:23, which says, “Whatever you do, work at it with all your heart, as if working for the Lord and not for men.” Remember Who you are really working to please.

In the last post in this series, I will unpack a few other key topics for being a faithful founder.

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Editor’s Note: If you liked this piece from Patrick, we encourage you to check out his other FDE blogs:

FDE Blog – Faithful Founder (1 of 3): Motivation, Co-Founders, Values & Family
FDE Blog – Founder’s Manifesto

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[Special thanks to Ben White on Unsplash for the cover photo.]