The mechanics of the survey were as follows: four regional discussionsyes with family business leaders and, in some cases, con members of the next generation of the family after a detailed analysis of the sample results, among which the important link between legacy and long-term business performance stands out.
The four key components of family legacy
Respondents answered a series of questions to determine the different degrees to which they incorporate legacy into their family business, breaking it down later. into four key components that, individually or in combination with others, have different impacts on companies and families.
Biological legacy: Intangible assets such as family name and lineage. They are powerful assets of the family business that often carry with them a commitment to maintaining the family legacy through the involvement of younger family members.
Material legacy: Tangible assets such as land, property and family heritage or objects of sentimental value. If a significant proportion of the family’s wealth is in the business, the tendency is to focus on the stability of the business and avoid unnecessary risks.
Social legacy: Intangible assets such as shared family values, attitudes, and beliefs that tend to contribute to a focus on community relationships and strong social ties.
Identity legacy: Shared stories and family rituals that weave identity, values and family history into the business and often contribute to transgenerational entrepreneurship.
Legacy as a differentiating asset: the Argentine perspective
According to the KPMG report, legacies They are tangible and intangible assets. that can lead to strong financial results and good sustainability performance.
They also help reinforce the emotional bond that is a source of family identity, inspiration and innovation; they are an important aspect of family businesses by connecting generations and shaping the business vision for the future.
But he also warns that family legacy can play a role in the company Potentially detrimental to innovation and change.
From a local perspective, consideration of the role of family legacies leans towards the positive side of the balance.
In that sense, Emiliano Martin, leading partner of Private Enterprise KPMG Argentina, maintains that “family businesses they change and grow over time and their legacy evolvesbeing a determining factor in connecting generations and in defining a long-term vision of the business.”
“For that reason,” he added, “family business leaders have the challenge of constantly searching for transform your family business, innovate and have a well-defined sustainability strategy, “to professionalize the management of the organization.”
“We are living in a highly competitive and changing digital economy in a global market that requires at all times make quick and professional decisions to avoid losing prominence. Without a doubt that the legacy It is a differentiating asset and that is why it should be revalued with the new rules of the business game,” he concluded.
For her part, Robyn Langsford, global lead partner of KPMG’s Family Business practice, provided a globalized vision of the same phenomenon: “The ability of families to weave their legacy through generations is powerful, as they transmit experiences, values and knowledge. It is natural that people want to register their mark in the world and leave something that survives them. Therefore, it is up to the next generation to make their own mark on the world, exploring ideas, technologies and processes that can elevate their family legacy to a new level,” he noted.
Family businesses and their socio-emotional heritage
In the research, quantitative data was measured about theThe biological, material, social and identity components of the legacyand also qualitative ones on business inheritance analyzed in more detail, which were displayed in the report.
The legacy contributes to socio-emotional heritage of families. A deep connection to family history can foster pride and dedication to the businessbeing key ingredients in the socio-emotional wealth of family members.
Legacy connects the present with the future. In addition to creating links between generations, legacy shapes vision and strategic decisions promoting sustainable business performance.
The legacy can be essential for long-term growth. The legacy of the family business is a building block with which what will remain for future generations is materialized.
Inherited and transgenerational entrepreneurship can impact performance. Family businesses that report high financial performance and sustainability practices also tend to show high scores in inherited and transgenerational entrepreneurship.
The accumulated wisdom of the family can be an invaluable asset. The knowledge, experience and skills passed from one generation to the next can help family businesses generate a unique competitive advantage.
Family legacy influences important decisions. The family’s shared purpose and values act as a compass to guide decisions that can affect the family, the company, customers, employees, suppliers and communities.
Adherence to tradition and openness to innovation. One of the most common challenges that family businesses face is the need to balance tradition and innovation. This is essential in its process of continuous adaptation to market dynamics and an ever-changing corporate landscape.
It is important to recognize and confront the paradox of legacy. Legacy is a source of identity and inspiration, but can become a burden if it is so rooted in tradition that it gets in the way of innovation, change and agility.
A new way for family businesses to evaluate the strength of their legacies and transgenerational entrepreneurship. Legacy helps family businesses identify themselves based on their transgenerational and legacy entrepreneurship score.
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
