Table of Contents
Introduction
In 1903, Henry Ford founded the Ford Motor Company, propelling it to great success through mass-producing reliable, affordable automobiles. However, as the company transitioned to the leadership of his son, Edsel, in 1918, a clash of strategies emerged. Edsel sought to modernise and target high-end and foreign markets, aiming to replace the iconic but outdated Model T. His vision embraced compromise with labour during the Great Depression. However, Henry Ford could not let go of the company’s origin story, causing conflicts that led to declining sales and labour strife, bringing the company to the brink of collapse by the 1940s. Only the assertive leadership of Edsel’s son, Henry Ford II, saved the auto giant from bankruptcy.
Family businesses often face generational transitions that pit tradition against innovation, and continuity against change. Succession plans and intricate trust structures constructed by older generations are essentially narratives of the values and life lessons that contributed to their success, aiming to pass on the same to their children. However, the younger generations must adapt these narratives to their own aspirations and the ever-changing world.
To avoid jeopardising the family business or squandering a financial legacy, families must approach their stories differently.
Embrace Critical Distance
Traditionally, family heritage, wealth, and reputation have been perceived as the property of the older generation. This perspective can burden younger generations, making them feel like mere caretakers. Nevertheless, research indicates that younger generations do value their family heritage, viewing it as a source of inspiration and motivation, more than just material wealth. They want to preserve this legacy while incorporating their own sense of purpose and identity.
Next-generation leaders often possess more critical distance from the family story. This allows them to confront difficult chapters, learn from past mistakes, and apply insights to drive innovation and sustainability.
Seek Role Models in the Family Story
When venturing beyond the traditional scope of the family business, younger leaders may hesitate due to a lack of role models. Finding exemplars within the family story can provide legitimacy to new endeavours. For instance, Fredo Arias-King, the third-generation CEO of Pinosa Group, found inspiration in his grandfather’s speeches advocating environmental stewardship. Affirmed by these words, Fredo established a nonprofit that promoted reforesting and sustainable practices.
Forge Identity Beyond the Founder-Entrepreneur
Younger generations often revere the family’s wealth creator, but they can benefit from understanding the founder in a more nuanced light. Delving into the life of the founder can spark honest conversations about social responsibilities and mental health issues. This understanding empowers the next generation to forge their own identities and contribute to the business’s growth in unique ways.
Reckon with Past Wrongs to Find a New Path
Many family businesses harbour hidden skeletons, such as scandals or wrongdoings. Confronting these darker aspects can be a powerful motivator for change. The Reimann family, for example, paid compensation to former slaves and refocused their family foundation on combating antisemitism, leveraging their family history to build a more just future.
Leverage the Family Story as a Competitive Advantage
Family heritage can be a strategic asset for business growth. British restaurateurs Helen and Lisa Tse revitalized their family’s culinary legacy by opening their restaurant, Sweet Mandarin, and publishing a best-selling memoir about their grandmother. This narrative platform enabled them to expand into cookbooks and cookery classes, drawing on their heritage for universal appeal and a sense of longevity.
Conclusion
Family legacy is a collective story belonging to the entire family. By viewing it as a dialogue rather than a monologue, younger generations can harness the strength of their elders to shape their own path forward. Preserving the legacy becomes a blessing rather than a burden, enabling families to sustain wealth and purpose across generations.
