There is a strong correlation between a family business’s legacy, and its long-term success, according to a report released by the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business (ISB). It also revealed businesses with strong legacies, demonstrate superior performance, and a firm dedication to environmental, social, and governance (ESG) principles.
According to the report, ‘Unlocking Legacy: The Path to Superior Growth in Family Businesses’ , many families in business, are successfully addressing the ‘legacy paradox’, managing the delicate balance between serving as a source of identity and inspiration, while avoiding becoming too entrenched in tradition, which can hinder adaptability and progress.
“This report, underscores the importance of legacy as a strategic asset that provides a competitive advantage for family businesses. By understanding their legacy type, and actively shaping it, family businesses can unlock significant growth potential, ensure long-term sustainability, and contribute positively to society,’‘ said, Nupur Pavan Bang, Academic Director, Thomas Schmidheiny Centre.
It reveals that Indian family businesses, score 78 per cent on legacy importance, matching the global average while highlighting the ‘deep-rooted’ value of Indian family businesses in maintaining their cultural identity.
When it comes to transgenerational entrepreneurship, Indian businesses score 76 per cent slightly below the European and Asia-Pacific averages of 77 per cent, indicating a need for increased focus on fostering entrepreneurial initiatives across generations.
On environmental sustainability, Indian family businesses, align with the global average of 78 per cent suggesting a solid foundation. However, further investigation also reveals room for improvement, especially in environmental practices, in which European firms are leading.
The Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business (ISB), is the long-standing member affiliate of the STEP Project Global Consortium. The report is a collaboration between KPMG Private Enterprise, and the STEP Project Global Consortium. It brings insights from 2,683 family business leaders across 80 countries and territories, including India.
The key findings from the Global report, identified legacy as a `Driver of Success’ as 45 per cent of family businesses with strong legacies report high business performance compared to their competitors.
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About 53 per cent of surveyed family businesses with strong legacies, demonstrate high sustainability performance across community, environmental, employee, and supplier aspects, the report said.