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Why Legacy Is the Key to a Smooth Transition for Family Businesses

As you may have heard, the world’s most popular television show, Game of Thrones, is in the midst of its final season. The show—if you are one of the approximately 15 people on the planet who has not seen it—has an overriding theme of family and the importance of family legacy.

Much of the characters’ motivation is derived from creating or leaving a legacy. The concept of legacy—in the show and in real life—is both abstract and incredibly powerful. And for family businesses in the process of transitioning leadership from parents to children, the concept of legacy can be invaluable.

In my years of family business consulting, I have seen the clash of generations and ideas take center stage in issues surrounding the transfer of power. Each camp tends to settle into its predictable position. The older generation hangs on to the status quo because the way they run their business is the way that made it successful in the first place.

The younger generation, on the other hand, believes that the “old way” of doing things will eventually doom the business, and that they must make wholesale changes to avoid being relegated to the dustbin of history. While both have solid points, the middle ground is almost always the best way forward.

Read more: Critical Principles for Mentoring the Next Generation.

Reaching that middle ground though, can be difficult—especially when family matters and emotions are involved. That’s where legacy comes in. The concept of legacy is powerful, but it can also get lost in shuffle, as the younger generation charges forward to make their own mark on the family business. Here are four tactics to ensure that the legacy of the family and the family business will carry on, even as the business and the world around it change.

Tell the Family Story

Some of the most successful family businesses I have worked with are adept at telling their story. New employees are given a history of the company—how it started, what its guiding principles were and how those principals are still part of the company’s operations today. The company/family history can serve as a connecting thread for success, regardless of how the world and business change.

Instill Pride in the Business

Instilling a shared sense of pride in a business—especially for non-family employees—can serve as a foundation that keeps the business on track through turbulent times, including transitions. While parents and children may have trouble seeing eye-to-eye on some issues, the company can retain continuity and stability through its dedicated employees.

Embrace Change—But Honor the Past

Change is inevitable and necessary. The world is constantly changing, and if businesses don’t change with it, they are doomed to fail. Of course, some principles are timeless—the way a business treats its customers, the values it stands for, etc. These are the things that made the business successful in the first place, and it’s important not to lose sight of that fact.

Technology changes, people change, the market changes. Some things though, are better left the same. Embracing these inevitable changes while carrying on successful traditions is important. You must find the balance to execute a smooth transition—and a successful future.

Find the Secret Sauce

Identify and acknowledge the “secret sauce” of the business and find ways to incorporate timeless values and behavior into the company as it adopts new processes, technologies and personalities. Of course, finding the secret sauce isn’t always simple. Both current and future leadership should spend time looking back at the history of the company, its ups and downs, its past, present and future. With close examination, the secret sauce should reveal itself—and give both outgoing and incoming leaders are roadmap to the future.

The transition of power in a family business can be a difficult period. But identifying and securing the family and business legacy can make the process much smoother. You may want to consider bringing in legacy planning partners or a family business consultant to help you with the effort.

One thing, though, is certain. Legacy—as a concept and a strategy—is incredibly powerful, and can bridge the generational gap more easily and successfully than almost any other tactic.

This entry was posted in Advice, Blog Posts, Family Business, Legacy, Succession Planning. Bookmark the permalink.

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