How to ensure the impact of your legacy on the next generation is richer than money.
The concept of legacy is powerful. Have you taken the time to consider what your legacy is? How will your life and work impact those who follow you? What will you leave behind — beyond your money — when you are gone? How will you be remembered? What will be your lasting influence on your family business or organization and community?
While at first you may be uncomfortable answering these questions, in fact it would be selfish to NOT address your legacy. As a family and business leader you have a responsibility to the next generation to not just protect your assets and ensure a smooth transition of your business, but to transfer your knowledge, life experience and wisdom in a thoughtful and impactful manner.
It's not just about the money
Regardless of the financial assets accumulated by an individual, the legacy left to a family is farther reaching than the money bequeathed to them. In a recent study on legacy conducted by Ken Dychwald, Ph.D., 77% of parents and adult children agreed that the most important issue concerning their inheritance was parents sharing values and life lessons.
Additionally, in a study by family wealth experts Roy Williams and Vic Preisser, 3,250 family leaders were interviewed. They concluded that family leaders' main concern was successfully transitioning family values and wealth to the next generation and preparing heirs to manage their inheritance responsibly. However, historically only 30% of wealth transition succeeds, with failures primarily resulting from breakdown in communication and trust between family members. This highlights the need for intergenerational conversations about these topics.
The issues in a business transition often mirror family concerns. Specifically, younger associates could benefit learning from your history, successes and mistakes. That doesn't mean they will always want to imitate your actions, but in your role as a mentor, sharing your values and vision for the future is a priceless commodity you can offer a potential successor.
Your legacy starts with a story
When having a conversation with the next generation in either a family or business setting, it is essential that you be open to generational differences in communication and thought.
For a conversation to be productive, you must be able to “hear” each family member or younger business associate's perspective and empathize with their concerns.
Family and organizational leaders should start the legacy conversation by sharing their story. Discussing your history, values and life lessons are a critical part of the legacy discussion.
The following exercise can help you get started in the process of clarifying your values and identifying critical issues you want to discuss with the next generation.
Take a moment to reflect on the following:
1. Name the three people who are most important to you and why.
2. Identify your top five values.
3. What is the accomplishment you are most proud of, and why?
4. What are three words you would like to have said about you?
5. What worries you the most about the future for your successors and their children?
6. What do you want your children and future generations to know about you, your values, lessons learned and life experiences?
Once you have answered these questions and have a clearer picture of what you want to impart to the next generation, you need to schedule several meetings to begin the communication process.
To prepare for these meetings you might want to write a formal document to memorialize your thoughts. For your family it would be an “ethical will” and for your business you might write a business/leadership transition document. The following are some suggested steps to guide you through this aspect of the legacy process.
Write an ethical will. This is a document that will formally express your thoughts and feelings to your loved ones.
Some topics it may cover are:
1. What I want my loved ones to know about me.
2. How I became who I am.
3. The main influences in my life.
More information on this topic can be found at www.yourethicalwill.com or
Create a business/leadership transition document.
This includes the following:
1. Share a historical perspective of the business and industry.
2. Identify critical issues in the business that need to be addressed.
3. Share your vision of the future of the business and industry.
4. Outline specific business expectations for the future.
These prescribed activities may appear to be daunting, but the return on your investment will be immeasurable. By understanding the concept of legacy and embracing the powerful role that sharing your mission, vision and values with the next generation can play in this process, you have the opportunity to significantly impact the future of your family and loved ones, as well as the successful succession of your business. It is by far the greatest gift you could give to the next generation.
Denise P. Federer, Ph.D. is founder and principal of Federer Performance Management Group. She has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer. Contact her at: [email protected]