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March 9, 2012

Matthew Freud, freud communications, on Why Founding Principles Matter for Businesses

By Spear's

Playing the Long Game Matthew Freud, chairman of freud communications, stresses the importance of founding principles to the identity and culture of a business

Playing the Long Game
Matthew Freud, chairman of freud communications, stresses the importance of founding principles to the identity and culture of a business

, I was sent to one of Britain’s most celebrated schools for a brief and inglorious education. As an unmotivated student of scrawny build and the son of a German immigrant, I was shunned from the sporty set, sneered at by scholars and denied access to the inner sanctums reserved for the spawn of the aristocracy. But I held my head high in the famous surnames gang.

Running as a pack with the sons of great industrial titans, scions of global high-street retailers and fully paid-up members of banking dynasties, I quickly realised that while the Freuds were well known, we were neither rich nor helpful in the creation of career opportunities. It was something of a family rule that you could consider any profession as long as no one in the previous three generations had already bagged it. This ruled out medicine, architecture, art, politics, entertainment, acting, journalism, catering, finance and selling door furniture.

After a brief flirtation with singing telegrams, I plumped for a job in public relations. It suited me and I was good at it, and after a three-year apprenticeship I established my own company at the age of 21. I had been trading for a few weeks when someone sent me an article about a previously undisclosed great-uncle, Edward L Bernays, the founder of public relations. Disappointed but undeterred and ignoring protocol, I pushed on, and my interest in family dynamics, inter-generational legacy and non-financial inheritance has endured and developed.  

Freud communications, now 28 years old, a leader in its field and, I hope, no disgrace to the memory of my forefathers, represents or advises an unusually high proportion of companies whose founders still loom large — either through family ownership, dynastic influence or principles that run through the corporate DNA of their cultures. In my opinion, they are fundamentally different from businesses that do not have an implied or stated purpose connecting the past to the future, or a tier of ownership or management who are invested beyond their own tenures.

I am not quite sure why the agency has earned a place on the roster of so many dynastic companies. Through my own genealogy and marriage to a member of a particularly lively media family, it is possible that my instinctive understanding and experience of the burdens and opportunities of heritage are a useful reference for businesses and brands that are trying to stay relevant and contemporary without losing their roots or integrity. More likely, I believe, is that businesses where short-term performance and quarterly sales targets are less important than sustainable growth and reputational protection need advisers who are adept at articulating a company’s values, not just its value. We have been working specifically in this field for twenty years.
Illustration by Adam Dant

MY BUSINESS PARTNER, the late and great Philip Gould, believed that the first generation of a company’s management defines what the business is; the second is tasked with working out how to do it better and bigger; and the big question left for the third and successive generations is why they do it. The answer is usually not to serve a class of shareholder whose tenure on the register in some cases can be measured in thousandths of a second, nor to disrupt robust business models with feverish corporate activity that sometimes seems to generate more professional fees than real enduring value.

In Philip’s view, organisations whose purpose can be helpfully defined by their history and whose future is imagined in decades, not quarters, are better equipped to deal with the brackish waters and constantly changing weather patterns of this uncertain era.

In the first edition of The Brewery Journal, we explore a number of industry sectors where the founding principal and indeed principles of some companies have proved either virtuous or ruinous; and some examples where the loss of the founder’s influence has been equally dramatic. We have commissioned research asking searching questions of a panel of analysts’ views of family-associated corporations, and the results, I hope, make interesting reading. We are grateful to the many contributors who have allowed us to share their thoughts and insights on their own experiences or their views on others.

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The Brewery, our off-site facility near Oxford, is used to help both the private and public sectors explore and articulate purpose, to create or identify initiatives that can capture and project the beliefs of a business or an institution over and above their What and How.

The Brewery is a not-for-profit enterprise — I will leave future managers of freuds to work out Why — but family tradition dictates they will not be my children! 
Matthew Freud is the chairman of freud communications
Both Matthew Freud’s article is taken from The Brewery Journal, a new publication associated with freud communications.

The Brewery offers a consultancy service to create or identify initiatives that can project the beliefs of a business, an institution or a cause, beyond the straightforward pursuit of profit.

freuds has been doing this work for many years but has now built a dedicated state-of-the-art off-site facility in the Cotswolds to differentiate this area of expertise from its core offering.

This first issue of The Brewery Journal is about businesses where the influence of the founder or subsequent family generations still looms large.

The contributors are a mix of significant figures with first-hand experience of the topic, freud consultants and journalists. 

Also in the Journal are pieces from Gordon Roddick on selling the Body Shop to L’Oréal, a contribution from Martin Jenkins on giving psychological advice to billionaires, and Deborah Cadbury on the sale of her family business to Kraft. 
Anyone wanting access to the full version of the Journal or to talk to freuds about the issues raised in it should email

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