Skip to content

Legacy: The Advantages and Pitfalls

Legacy The Advantages and Pitfalls

There are many books and articles written about family business and legacy. Many of these talk about the advantages and benefits of legacy, both for the family and the business. There is no doubt that family business and the family both benefit from the legacy of previous generations. Family businesses outperform publicly held companies, according to a recent Ernst and Young study, in large part because the family and business are making values-based decisions and investing their patient capital in opportunities that may not pay off for the current generation. This is a powerful mix that exists solely because of the legacy of previous generations.

As a family business consultant and as a fourth-generation family business member, I have seen and experienced not only the positives of legacy but also the negatives in both the business and the family.

In the business, owners and managers may feel that they have to stay in markets or keep manufacturing products because the founder started the company with these products and markets. This vision by the founder which sets the company up for success can also inhibit the growth of the company long term. All business decisions need to be made with an eye to the past, and a focus on the future. The founder wasn’t successful because of the product and market mix, the founder was successful because the product was right for the market. This is the true legacy of the founder, not the products themselves.

In the family, there are often wonderful legacies of philanthropy and community focus. The family can wield influence and provide resources to do powerful work for the community and employees. On the less positive side, families in the spotlight can hide their conflict and emotions rather than working to resolve the issues, whether it is with the family leaders in management, or cousins and siblings. When a generation doesn’t work to resolve their issues, this conflict becomes part of the fabric of the legacy. Whether a parent speaks with their child about the conflict or not, the child knows this and becomes influenced by the parent’s perspective on the individual. This often leads to problems between a specific branch and the family as a whole, because the issue with one person gets tied to their children and grandchildren.

Recognizing that there is both a good legacy and a bad legacy is empowering and motivating. A painful conflict in one generation can motivate that generation or the next to work to resolve this conflict rather than pass it down to their children.

One of the best ways to resolve conflict is to implement a task force process. In an upcoming blog post, I’ll share the techniques and benefits of this process.



Share This Post

Connect with Meghan

Meghan Juday Advisory – Learn more about her work helping families establish or refine family or corporate governance

Speaking – Discuss upcoming speaking opportunities, whether at a conference, podcast, or interview.

Advocacy – Learn more about Meghan’s work with women in family business leadership, including her work with The Lodis Forum