Commonly held values are key to a successful generational business--and family!

What It Takes for a Lasting Family Business Legacy

What It Takes for a Lasting Family Business Legacy

by Bill High

It might surprise you. The success of a long-term family business is not in the gregarious or charismatic leader. To the contrary, success is dependent upon its values.

Let’s back up. Often a successful family business is founded by the strong charismatic leader. They make things happen through sheer force of will.

But what happens when that leader is no longer there to lead and convene?

One of the first keys is to recognize that it’s possible the next leader may not be a family member. That is often one of the hardest pills to swallow.

On the other hand, the wealth creators are often so intent on preventing entitlement that they never allow the next generation to fully test their wings either.

But if the next leader is not going to be a family member, that doesn’t mean the next generation is completely off the hook. The founders can still teach the next generation to embrace a role as stewards of the business even if they are not leading it. They have a responsibility to steward the business and the family wealth for future generations. This “It’s not all about me” attitude is something that has to be cultivated.

It’s this mindset that has allowed some businesses to stand the test of time.

 

The World’s Oldest Companies 

The United States is approaching 250 years of history, which seems like forever to many people. But it’s just scratching the surface when compared to the longevity of some of the world’s oldest companies, according to a Visual Capitalist post.

Here’s a quick sample:

Year Company Name Country Industry
578 Kongō Gumi Co., Ltd. Japan Construction
862 Staffelter Hof Germany Distillers, Vintners, & Breweries (Winery)
886 The Royal Mint England Manufacturing & Production (Mint)
900 Sean’s Bar Ireland Service Industry (Pub)
1135 Munke Mølle Denmark Manufacturing & Production (Flour Mill)
1153 Ma Yu Ching’s Bucket Chicken House China Service Industry (Restaurant)

In the United States, the oldest company is the Shirley Plantation, dating to 1638. Canada’s oldest is the Hudson Bay Company, from the year 1670. In South America, three of the oldest companies are mints with the oldest dating to 1565. And in Europe, 15 of the oldest companies are related to the food and beverage industry. Asia and Africa count their oldest companies to be in banking/finance and transportation.

These generational companies tell us that it is possible to survive for hundreds of years. We need a longer mindset: build to survive and thrive and impact a culture—not just to make a quick profit.

As an example, even here in the United States, a typical S&P 500 Company in the 1960s was projected to last 60 years or more. Today, it’s down to just 18 years, according to Visual Capitalist.

 

Shared Values Build Identity

Generational stewardship is a pivotal attitude that reflects a value of the family. And it is in fact the identification and articulation of family values that allows a family to survive, even thrive for generations.

Why? Family values build identity. For example, imagine if the Smith family can say at every generation: “We are the Smith family. We are known as creators, builders and sustainers. For our family, our community and the world.” That’s something to get behind. Every generation could sign on freshly to the core values of their family identity. (Take a practical step to state your family’s values by downloading my Identifying Your Family’s Values guide.)

How do you stand with building your family identity? And finally, keep in mind that this idea of generational family applies to every family!

 

 

Photo by Jed Owen on Unsplash

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Published November 6, 2020

Topics: Family Business | Family Legacy

BusinessFamily BusinessFamily LegacyGenerationsValues

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