Unpacking The Importance Of Legacy
19th February 2018 Sian Steele, Family Business Leader, PwC UK
Legacy is important to many family firms. Sian Steele from PwC shares an insight into why that is so and a deeper meaning than just the physical assets too.
Legacy is defined as something that is left to someone, typically a gift, assets or money left in a will. In family businesses, it has a much deeper meaning as legacy goes far beyond tangible assets: history, toil, the resilience to endure the test of time and reinvent become intrinsic parts of the legacy.
It all starts with a founder with a vision, who will stop at nothing to make it a reality. But passing on that vision to the next generation is not without its challenges, as it needs to be accompanied by the same drive to build, accomplish and grow. And typically, the next generation will have their own dreams and their own sense of fulfilment, which they should be allowed to develop and accomplish.
So, how can different wishes and wants between generations still come together to serve a common purpose and create sustainable businesses for the long term?
A next generation who grows up enveloped by the history and roots of the business, observing first hand its successes and failures, its changes and growth will develop a very strong attachment to that entity. Knowing the business’s stories, hearing about the joys and the hardships at the dinner table, doing summer internships at the company, knowing the employees since birth; these are just a few elements that constitute the legacy of a family business.
They may seem like details rather than grand gestures, but these are the small things that build a strong emotional connection with the family business over time. And it’s precisely that emotional connection that will in turn create a collective sense of pride in the next generation, fostering the will to carry on the legacy and encouraging future generations to do likewise.
Legacy becomes one with the brand of the family itself, so it’s not only the business they’re carrying on, but the family’s identity as well.
When the next generation is united in wanting to carry on the legacy, they become a team. Some are directly involved in the company, some try new ventures and follow their own interests. Equally valuable are those that work to ensure the the family stays united and ensure responsible ownership. There are so many other roles to play than just the one of employee or CEO of the family business.
Desire to be part of and continue a legacy helps the next generations to carry the business forward because they want to and not because the duty is imposed. But, a word of caution to those who regard legacy as a golden moment fixed in time, boxed and preserved.
Families who regard their ancestors and the company’s origins with such reverence that they stay anchored to the past may well be resistant to change not recognising that the legacy is the gift of an entrepreneurial and innovative environment to flourish for the long term, supported by the family group..
Legacy is a story that needs to be retold over and over again without forgetting to always add another chapter.
About the Author - Sian Steele is the head of UK Family Business at PwC. Find out more and get in touch via the PwC website here