The report from KPMG Private Enterprise and the STEP Project Global Consortium brings together personal insights from the experiences of top family business leaders combined with data on the impact of family legacies on their business performance gathered from 2,683 family businesses across 80 countries, territories, and regions. The survey data, which uses both qualitative and quantitative research, revealed that of the 45 percent that reported strong legacies, the same cohort also reported strong business performance, and an even higher 53 percent reported high sustainability scores — a powerful combination for the success of the business and the family today and for generations to come, and a reminder that legacy alone may be insufficient.
The annual report reinforces the importance of transgenerational entrepreneurship as a key driver of sustained performance in family businesses, with legacy alone insufficient to guarantee long-term progress from generation to generation. The report advocates that legacy is a process, not a final outcome, with the source of legacy originating from many different factors. Legacies are often amplified by transgenerational entrepreneurship among younger generations who compel their predecessors to communicate openly about what matters to them and to reinforce their business legacies and bridge what can sometimes appear as a generational divide.
The report takes a closer look at the true essence of legacy in today's world and provides a 'future-centric' perspective where tradition and innovation co-exist and considers where change must be embraced for the business to remain resilient, competitive, and relevant. The report confirms that legacy may need to focus less on the past and be treated instead as a crucial building block for the future because of the positive contribution it makes to business performance and environmental, social, employee and supplier sustainability.
Andrea Calabr?, STEP Project Global Consortium Academic Director, and Director, IPAG Chair for Sustainable Family Business & Entrepreneurship, IPAG Business School, says: "Not only does legacy connect generations and ensure the continuity and heritage of entrepreneurial success, but it also shapes the long-term vision of the family's business and guides their strategic choices. But in today's environment, it is presenting new challenges to family business leaders who find it necessary to learn how to blend traditional values with modern business strategies to build a dynamic legacy with future generations in mind."
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. 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 of broader society.
The participants attending the "The pathway to good: Sustaining family business legacy for wellbeing" Global Summit were among the first in the world to receive the report, representing leading family business practitioners, scholars and PhD students with nationalities from Asia, the Middle East, the European Union, Eastern Europe, the UK, and North and South America. With 'social legacy' heralded as the strongest legacy component from our research findings, the message was clear and served as an undeniable call to action for family businesses to harness their natural instincts to generate 'sustained performance' and develop a 'dynamic legacy.'
The report emphasizes how important it is for family businesses to embrace their legacy, as it may be key to future successes: share the essence of your legacy with the family and executive team, and finally, give the family business's subsequent generation the freedom to create their own legacy.
Robyn Langsford, Global Leader, KPMG Private Enterprise Family Business, KPMG International, and Partner in Charge, Family Business & Private Clients, KPMG Australia, says: "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. 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. And with the increased focus on environmental, social and governance (ESG) priorities across the world, younger generations will likely be more concerned with the social and entrepreneurial legacies of their family businesses versus older generations who may continue to place more value on material legacies and the family bloodline. History doesn't necessarily repeat, but it rhymes. It is imperative for founders to establish the 'beat' for subsequent generations to follow."
The study indicates that while regional similarities exist, data points vary across regions due to the influence of transgenerational entrepreneurship. This supports the notion that legacy alone will likely not suffice — legacies should become dynamic to help maximize business outcomes.
Sasithorn Pongadisak, Partner, Head of KPMG Private Enterprise, KPMG in Thailand, says: "Based on the 2024 Global Family Business survey data, the strongest legacy component that contributes to good business performance and sustainability is 'Social legacy', reflecting the family business leaders' focus on legacy in terms of their contribution to society and the greater good. Looking ahead, business families should listen to the needs and ambitions of future generations and may preserve family values and traditions by passing down transgenerational entrepreneurship as a legacy enabler while also committing to innovation and adapting to changing market dynamics."
Read the Global Family Business Report here: https://kpmg.com/th/en/home/insights/2024/05/unlocking-legacy.html
Source: KPMG Thailand