Wrestling with Legacy in a Household Enterprise – HBR.org Day by day - NEWS TODAY

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Thursday, September 29, 2022

Wrestling with Legacy in a Household Enterprise – HBR.org Day by day



Legacy is an intangible, invisible power that impacts the choice making of the following era in a household enterprise. Psychologists name the motivation to construct legacy generativity, and it stems from the priority for the welfare, well-being, and safety of future generations. Creating and sustaining legacy is a method for relations to perpetuate the household id and function. However are legacies at all times constructive? The paradox is that legacy has been proven to result in each constructive and damaging outcomes for organizations and people. Legacy is an asset to a household enterprise when it serves as a supply of id, inspiration, and path. The draw back is that legacy will also be a legal responsibility — that is the inherent paradox of legacy. Corporations can grow to be so entrenched in custom and “the best way issues have at all times been” that they constrain innovation, change, and organizational agility. The problem for household enterprise leaders is to handle this legacy paradox.

Jon M. Huntsman, founding father of the Huntsman Company, passed away in 2018. Once I requested his son, David Huntsman, in regards to the lasting affect of his father on his function as president of the Huntsman Basis, he stated, “Having grown up in a household enterprise, my father’s affect continues to be ever-present in my life — whether or not I acknowledge that consciously or not. I do know precisely what he would say or do in nearly each enterprise scenario, as a result of I watched it firsthand for years. His affect, though he’s not right here, nonetheless impacts even the little choices I make all through the day — issues I do or select to not. A part of him will at all times be with me, not simply in enterprise however in all points of life.”

Legacy is an intangible, invisible power that impacts the choice making of the following era within the enterprise, and in life normally. Legacy has additionally been known as the “connective tissue” that hyperlinks generations in a household enterprise. Jon Huntsman’s values, beliefs, and behaviors reside on within the lives of his descendants lengthy after his passing. Legacy begins when the values, norms, data, and beliefs of earlier generations are entrenched within the present era. As soon as embedded, next-generation leaders grow to be the “keepers” of the household/enterprise legacy. Till legacy is adopted, the issues that make up somebody’s legacy are merely traits of the earlier era. However as soon as rooted, legacy turns into a conviction that guides the next behaviors of the following era.

Research has proven that enterprise founders, senior generations, and fogeys are motivated to construct and maintain legacies based mostly upon the ethical and spiritual beliefs, data, norms, and values that labored for them, and that they might have obtained from earlier generations themselves. Psychologists name the motivation to construct legacy generativity, and it stems from the priority for the welfare, well-being, and safety of future generations. This desire has been found to exist more in family firms than non-family firms due to an elevated feeling of ethical obligation to previous and future generations. Creating and sustaining legacy is a method for relations to perpetuate the household id and function.

There are a number of prescriptions within the literature explaining the right way to construct a legacy in a household enterprise. For instance, in a recent Forbes article, Stephanie Burns argues that constructing a legacy requires being the most effective at what you do, including new causes to the prevailing legacy, honoring the prevailing legacy, and carrying on cultural heritage. Tales, diaries, photographs, and household property comparable to land, factories, and homes, in addition to household symbols comparable to logos and rituals, are necessary autos that talk legacy. These mechanisms can symbolize and talk the deeply held beliefs, norms, and values that make up the legacy of the household enterprise. They can also play important roles in developing a lasting legacy for the next generation.

However are legacies at all times constructive? The paradox is that legacy has been proven to result in each constructive and damaging outcomes for organizations and people. Legacy is an asset to a household enterprise when it serves as a supply of id, inspiration, and path. Jay Barney’s research means that it might be the one actual supply of sustainable aggressive benefit for a household enterprise. Legacy is uncommon, imperfectly imitable, priceless, and sustained inside the firm — rivals can copy merchandise and processes, nevertheless it’s inconceivable to repeat an organization’s legacy.

For David Huntsman, expertise together with his father can’t be copied and is, for him, uncommon and priceless. He has realized from the expertise that solely he and his agency have had, and consequently, his father’s values and knowledge reside inside him and his agency. His father’s legacy has at all times been good for the corporate and the household, and sustaining that deeply-held legacy is rational. To do something opposite to that legacy could be a violation of the values and norms that outline their household and their household enterprise. Transferring away from legacy runs the danger of dropping the aggressive benefit that the household enterprise has at all times loved.

The draw back is that legacy will also be a legal responsibility — that is the inherent paradox of legacy. Corporations can grow to be so entrenched in custom and “the best way issues have at all times been” that they constrain innovation, change, and organizational agility. Relations might really feel trapped by the previous and should subsequently face an ethical dilemma once they’re pushed to maintain the legacy and brush apart a need to construct their very own imaginative and prescient and technique, which could in the end be essential to maintain and develop the corporate. Therein lies the paradox: feeling the necessity to reside the embedded values, beliefs, behaviors, and data of the previous, which could battle with a need to innovate and transfer away from the legacy that has at all times outlined them. Sturdy adherence to legacy can create organizational inertia that makes it troublesome for leaders to change the agency’s technique, model, and routines when crucial.

The problem for household enterprise leaders is to handle the legacy paradox. It’s a battle between the pinnacle and the center. The pinnacle may decide {that a} change is required based mostly upon rational logic and evaluation of the scenario. The guts may need an emotional attachment to the previous. The result’s a battle between the target situational evaluation and subjective intestine beliefs. Ought to the chief keep true to the household legacy and heritage that has at all times labored up to now, or ought to the chief redefine the legacy, the household id, and the agency that might be crucial for the long run? It is without doubt one of the most troublesome, gut-wrenching choices that each one household enterprise leaders should ultimately make. No household enterprise chief needs the excellence of destroying the household enterprise and every part that the household represents. It’s the major purpose why we see household enterprise leaders justifying “socio-emotional” efficiency comparable to household unity and concord over doubtlessly increased monetary efficiency in a household enterprise.

Ultimately, it’s a matter of making and molding a legacy that may evolve and grow to be part of the household enterprise tradition. A crucial a part of a profitable household enterprise legacy is being the most effective at what the enterprise does, and having leaders who’re constantly contributing the competencies and techniques wanted to maintain it that method. A profitable legacy can’t be so rooted up to now that modifications within the group can’t be successfully addressed. The keepers of the legacy should handle the troublesome job of managing stability and change. The chief should decide which values, norms, and beliefs are timeless and legitimate no matter circumstances — for they’re the core of the legacy that should outline the id of the household and the enterprise going ahead. Beliefs, behaviors, and data which might be not core restrain crucial change and have to be challenged for the enterprise and the household to outlive and thrive. On this method, the enterprise can retain its core id and maintain its aggressive benefit.



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