What is your “True Family Legacy”?
The term “Family Legacy” can conjure up different images and thoughts in anyone who hears it, depending on their age, wealth, and life circumstances.
This subject comes up a lot in my work, but I haven’t necessarily written about it much, and I feel a need to share more thoughts on it.
I recently took part in the monthly #FamBizChat on Twitter, where a bunch of my colleagues tackle a subject for an hour on that social media platform.
The subject this time was “Legacy”, and I naturally went to my view of legacy as being much more of a “family” thing than a “business” thing.
What struck me is that I felt pretty alone in that perspective.
Maybe most of the others were advisors who worked more on the business side of things, and less with the family, I’m not sure.
But it stayed with me, so I thought a blog on the subject would be timely and useful.
Business Card Title
The title on my business card is “Family Legacy Advisor”, which hints at my bias.
It used to say Family Business Advisor, but because I really prefer to minimize my interactions with the business, in favour of those with the family, I made the change a couple of years ago.
Admittedly, I usually answer “family business consultant” when I’m asked what I do for a living in some circumstances like going through customs.
Whose Legacy Is It?
But my bias is to concentrate on the family legacy versus the business legacy, although in truth, they certainly can and do co-exist together, often for decades at a time.
In a multi-generational family business though, at some point they can bifurcate.
Family involvement in the ownership and/or management of the company eventually changes, and the family eventually diversifies its focus to other endeavours.
Who Takes the Lead?
A business has many resources at its disposal, and they’re necessarily organized into functioning groups of people with more or less clear roles and responsibilities.
So ensuring that the business legacy is captured can actually become part of the job of a person or group. It will often fall under marketing because the business legacy is closely attached to the company’s brand.
And so of course the corresponding person whose job it is to ensure the family legacy is, um, well, of course it must be, um, well, uh, I’m not sure…(?)
“Sorry, our family doesn’t have a marketing department”.
Why Did You Work So Hard?
Most business founders work hard because they want to support their family, and as their wealth grows thanks to those efforts, they continue to work hard so that their wealth can serve the next generations of their family.
Many of those people, however, will fail to properly transition that wealth to their family, and that goal will never be reached.
Research shows that about 60% of the failures can be attributed to a breakdown in family communication.
Family Governance and Alignment
The exceptions, the ones who manage to keep their wealth in the family for multiple generations, are the ones who actually put in the work to establish some family governance.
That word, “governance”, scares some families, and I get that.
It doesn’t have to be that complicated, especially when you are just starting down this road.
What it does require is some intention, which begins with a decision, normally from the top, that it’s important enough to direct some time and effort to this task.
True Family Legacy
Your “true” family legacy is one that’s custom tailored to your family. No other family resembles yours, so why even pretend that this work can come ready-made, off-the-shelf?
Two expressions capture this whole question rather well, and I’ve been known to use both of these:
- Instead of concentrating on preparing the family assets for the heirs, make the effort to prepare the heirs for the assets
- Don’t just concentrate on transferring the family’s valuables, work on preserving the family’s values
If you’re the person in your family who recognizes the need for this, you already know you can’t do this alone.
Maybe this can get you moving in the right direction:
Also note the photo above this post: “Heritage”.
That’s much more about Family Legacy than any business the family happens to own.