Successful family businesses harness tradition, experience and innovation to achieve a new dynamic form of legacy.

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Bangkok, 11 June 2024 – The Global Family Business report from KPMG Private Enterprise and the STEP Project Global Consortium reveals how some successful business families adopt a future-centric view of legacy that binds generations together, creating dynamic legacies that adhere with tradition while simultaneously embracing innovation. The report, which launched at the Global Family Business Summit “The pathway to good: Sustaining family business legacy for wellbeing”, provided insights that reveal many business families are overcoming the ‘legacy paradox’ — the trade-off between being a source of identity and inspiration versus a liability if so entrenched in tradition it stands in the way of innovation and change.

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 Calabrò, 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.

Read the Global Family Business Report here.

The STEP Project Global Consortium is a global applied research initiative that explores family and business practices within business families and generates solutions that have immediate application for family business leaders. STEP aims to be a leading global family business research project with an international reputation. The research insights are specifically drawn to be of relevance to developing new theoretical insights that can offer novel and valuable best practices recommendations to the business stakeholders and the practice community at large. Having a global worldwide orientation, STEP offers networking opportunities for researchers, family business owners and consultants coming from five continents.

Visit: thestepproject.org

As with your family, your business doesn’t stand still — it evolves. Family businesses are unique and KPMG Private Enterprise family business advisers understand the dynamics of a successful family business and work with you to provide tailored advice and experienced guidance to help you succeed.

To support the unique needs of family businesses, KPMG Private Enterprise coordinates with KPMG firms from around the world that are dedicated to offering relevant information and advice to family‑owned companies. KPMG Private Enterprise understands that the nature of a family business is inherently different from a non‑family business and requires an approach that considers the family component.

Visit: kpmg.com/familybusiness

Passion, it’s what drives entrepreneurs; it’s also what inspires KPMG Private Enterprise advisers to help you maximize success. You know KPMG, but you might not know KPMG Private Enterprise.

KPMG Private Enterprise advisers in KPMG firms around the world are dedicated to working with you and your business, no matter where you are in your growth journey — whether you’re looking to reach new heights, embrace technology, plan for an exit, or manage the transition of wealth or your business to the next generation. Working with KPMG Private Enterprise, you’ll gain access to a trusted advisor — a single point of contact who shares your entrepreneurial mindset. Access to KPMG’s global resources and alliance network can help you drive your business forward and meet your goals. Your success is KPMG Private Enterprise’s legacy.

Visit: kpmg.com/privateenterprise

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Kampanat Induang
E: kampanati@kpmg.co.th