A legacy is as unique as the family that owns a business. In most family businesses, this heritage includes the principles, purpose, and values that underpin the business family and its companies.
For some, preserving the family legacy often becomes a moral obligation, which encourages preserving and increasing what has been achieved by previous generations, following the principles of the family.
Therefore, to guarantee a family legacy, it is advisable to take into account the following actions:
1.- Establish family governance
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Legacy is primarily an issue rooted in the family rather than the business. Therefore, it is essential to establish family governance, which allows constant interaction between all its members in relation to business and community activities, so that subsequent generations assimilate the culture and principles considered in decision-making.
2.- Involve the next generations early
According to the study Family businesses in Mexico. Succession time in a disruptive scenario, prepared by KPMG in Mexico in 2019, only 37% of these organizations have a succession plan, at least partially. It is relevant to anticipate generational changes, developing a succession plan in advance, and preferably involve family members early in common issues. This will allow them to understand the values, principles and culture that prevail in the business and in the family.
3.- Focus on the family legacy in addition to the patrimonial legacy
Many families work hard to bequeath an estate to subsequent generations; however, they are not always prepared to preserve this legacy. A family can carry out significant changes in their companies, even get rid of businesses that have been preserved for generations, to undertake new challenges, however, the family legacy must endure regardless of the transformations that their companies may undergo.
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Preserving the family legacy involves discipline and effort; This inheritance shows the essence of what the family has been, and provides a guide for future decision making.
The transfer of values and principles within the organization is also essential to preserve its family and business legacy. This places subsequent generations in a favorable position to continue the business that has been built for generations.
The family business legacy is the component that integrates the business purpose, family values, and achievements over generations. Transferring the legacy can be a complex challenge, however, it is essential for the sustainability of the organization and the preservation of the identity and values of the family. Therefore, it is critical that families consider putting together a plan and working to preserve the legacy they want to endure over time.
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Contact:
Alberto Dosal, Advisory Partner in Corporate Governance, Risk and Compliance at KPMG in Mexico *
[email protected]
The opinions expressed are solely the responsibility of their authors and are completely independent of the position and editorial line of Forbes Mexico.