Family and legacy go hand in hand and most families in business have a desire to connect and contribute to sustaining their legacy across the generations. One way we do this is by sharing and maintaining the things we value, such as important traditions, milestones, personal histories and the family’s beliefs and principles.
In family business, legacy is the connective tissue that binds the core purpose of the business, the family’s values and meaningful achievements across multiple generations. It represents the tangible and intangible assets: the financial worth and the social and emotional value that the family has accumulated, adapted and paid forward.
In this way, legacy is an effective medium for decoding, transferring and interpreting the purpose, values and meaning of the business family across the generations. And, as is the case with so many business and family subjects, family businesses bring their own unique twists and nuances to the subject of legacy.
In family business research, legacy has been used to explain entrepreneurship, customer relationships and longevity. To enhance our research with first-hand experiences, we went to the source: family business leaders across the globe who joined us for conversations and offered their personal and impassioned descriptions of their own business and family legacies. They made it clear that business and family legacies are inextricably intertwined and each serves a purpose in reinforcing the other.
They also reminded us that legacy is not only about looking back, but also looking forward at what is valued from both a business and family point of view, and what motivates families to want to continue to build on that value through future generations.
Passing on more than what you receive
Each family’s legacy is as unique as the family itself. It can be a bloodline, a name, heirlooms, a legal entity or family stories, myths and artefacts (1). As we’ve encountered in most family businesses, the family legacy also typically includes the principles, purpose and values that underpin both the family and the business.
By associating the long-term orientation of the business with the intention to maintain it through multiple generations, the pragmatic nature of family business is closely connected with the ‘generative’ nature and emotive underpinnings of the family’s legacy—that stage in adult life when people are motivated to nurture and guide their children and grandchildren (2). This is how families code, transfer and interpret meaning across multiple generations.
There are aspects of legacy that represent both the business and the family to reflect the family’s wishes, behaviours and expectations, while also bequeathing specific items of value from the business such as a sum of money, property or an ongoing business enterprise from one generation to the next. There is an expectation that future generations will maintain, adapt and continue to grow the gift that has been given to them.
As a third-generation family member and shareholder of an industrial manufacturing company in Mexico explained, “Legacy is a vital part of our history that has to be nurtured, protected and grown and it is a big responsibility for the family to take it forward. The worst thing would be to pass on something to the next generation that is less than what you received.”
The choices that one generation makes will affect the choices of every generation that follows and it is important for older generations to ‘make space’ for the next generation to make their own decisions about how they will take the family and business legacy forward.
The founder plants the seeds and it is the family’s responsibility to continue to nurture them and help them to grow. This reminded us of two parenting styles (3)—the carpenter and the gardener—that are often discussed in family literature. The concept is that the carpenter thinks that the child can be moulded (just as a sculptor might do) by taking a block of marble and chiselling it into a form that they want the next generation to resemble. They tell family members what school to attend, what jobs to have and they shape the next generation into how they want it to look.
The gardener, on the other hand, plants the seed and waters it, allowing the next generation to grow in the direction that they want. The family cultivates opportunities to help them get there. The gardener mentality gives members of the next generation the space to make their own choices with the guidance and support they need to make good decisions.
Click to continue reading The enduring legacy of business families by KPMG Private Enterprise and The STEP Project Global Consortium.
1 Barbera, Stamm, & DeWitt, 2018; Dyer, 1988; Hammond et al, Hunger & Rowles, 2005.
2 Dollahite, Marks, & Wurm, 2019; Erikson, 1963.
3 Alison Gopnik, The Gardener and the Carpenter: What the New Science of Child Development Tells Us About the Relationship Between Parents and Children, Farrar, Straus and Giroux, 2016.