Legacy Transformation

I recently had a conversation with a client who said: a lot of what you write about is how to transition ownership and legacy from one generation to another. But what about those of us who are considering selling the legacy business? What about our dilemma?

The dilemma is this: we have tried to be good stewards of the business we have been given, through our work in the family business, through our oversight on the board and/or through the role(s) we play in the family and community. We have appreciated the assets we have been given. However, our lives have taken different paths, the industry is not the same and frankly continuation of the business without the infusion of much debt or sharing of equity and real passion would not be good stewardship of this asset. And the passion isn’t there.

So, as our friend Jay Hughes has suggested, without the energy that comes from personal passion, a business will die.

The legacy of most families, however, is more than the business.

Rather, there is often a “spiritual legacy” that encompasses the lessons, values, principles, stories and wisdom that can be shared from generation to generation to add value. There are also pieces of a legacy we often might choose not to pass on, such as addiction, abuse, suicide, long-term conflict and/or obligation to continue a destructive relationship, or unrewarding business.

Transforming the legacy means, to me, taking the best of the family’s financial, spiritual, relationship, intellectual and other forms of capital and passing them on in a form that will be productive for current and future generations.

Some examples:

• In one family, the founder created a business that was somewhat successful and his sons took the baton and continued the business, through good times and bad. Their father had a very small business, and the boys had to learn good business practices as they grew the business. They were close to bankruptcy at one point and felt that their faith helped them through. They committed to share their success with the employees who stuck it out and through their tithing. Their legacy was not just a financial one, but a very concrete manifestation of the faith in what they shared. Their legacy goes on to the next generation on paper, in legal documents and in the hearts of their heirs.

• In another family, the rising generation (4^th) facing the conflict of their elders (Generation #3) keeping them from constructively collaborating in their stewardship of their family and its assets. They came together resolved that conflict would not be their legacy. They committed to put in place practices and processes that would keep communication open and direct and to create their own vision of the future that built on the strengths of the family and business, but not on the “shaky” footing of the generation before.

• Yet another family captured the heroic history of their ancestors in books and videos about the family and their endeavors. They sold the legacy assets and built new businesses that were relevant to today’s market. So, while honoring the values, courage and business savvy of the founding generations, they went into new directions that captured their imagination and hearts and were financially lucrative.

• Finally, another family took the difficult path of saying they would be better off not collaborating as business partners, but finding a way to stay connected as family was most important. They honored their roots as blood relatives and worked hard to rebuild relationships that had been strained by the inability to partner together. They each took a part of the business legacy and transformed it individually and healed the strained relationships. Their gift to the next generation was the opportunity to have holidays together, to remember the ups and downs of the family history and to create new traditions.

Research at Emory University showed that children who are very resilient, have heard stories about their ancestors. These stories helped children to feel they are part of something larger than themselves. So, when the going gets tough, they know others might have solutions as the family goes back generations. Moreover, kids who heard stories that included the “ups and downs” also understood that life has cycles and that when you hit the rough spots it isn’t the end. These resilient offspring have a legacy that gives them context and hope, during the most difficult times, as well as stories of achievement and dreams that can propel them further.

So, I think that part of the answer to my client’s question about passing on legacy if the business doesn’t continue in the family is to look to the stories, traditions and creative possibilities that can be passed along no matter what physical assets exist. These may ultimately be more powerful as they provide the tools with which new legacies can be built.