Successful family businesses most often harness tradition, experience, and innovation to achieve a new dynamic form of legacy. That is according to a report on the subject from KPMG, in collaboration with STEP Project Global Consortium.
The KPMG report was released at a meeting in Italy – the Global Family Business Summit – which was convened with the aim of better understanding how family businesses can continue to be successful and build a lasting legacy.
Of the 45% of family business leaders surveyed that reported having strong legacies, the same cohort also reported strong business performance, and an even higher 53% reported high sustainability scores.
The 2024 edition of the annual report emphasizes the importance of transgenerational entrepreneurship as a key driver of sustained performance in family businesses. Legacy alone is not enough to guarantee long-term success from generation to generation.
“Differing perspectives and priorities can shape how different generations perceive the importance of their legacy and the strategies they employ to build and sustain it,” said Robyn Langsford, global leader of KPMG’s Private Enterprise Family business.
“These generational differences can also enrich the family business’s legacy by incorporating diverse perspectives and approaches that reflect the evolving dynamics of the business and broader society.”
Another major conclusion made by the authors is that family businesses must embrace their legacy, a crucial component to future successes. Older leadership must also give their family business’s subsequent generation the freedom to create their own legacy.
“Family businesses have been a significant force in the marketplace across the Middle East region for decades, and some of the major family businesses have even transitioned across four generations successfully,” said Harish Gopinath, partner and head of KPMG Enterprises for the Middle East, South Asia and the Caspian region.
“Given the rapidly evolving landscape in relation to emerging risks, and digital transformation, leaders within family businesses must engage with the future generation to be able to rethink and redesign their growth strategies.”
There has been a major increase in focus in recent years on ESG priorities across the world. For that reason, it should come as no surprise that younger generations in family businesses are more concerned with the social and environmental legacies, while older generations may continue to place more value on material legacies and the family bloodline.
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