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Successful family businesses capitalize on tradition, experience and innovation

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To achieve a new dynamic form of inheritance

Oι επιτυχημΕνεσ οικογενειακιχειρorσεις ιοιον παση επει ;ρλα κηννομλα

at the Global Family Business Summit in Vietri sul Mare, Amalfi, Italy, says that successful family businesses leverage tradition, experience and innovation to achieve a dynamic new form of legacy.

 < /strong>The Global Family Business report by KPMG Private Enterprise and the STEP Project Global Consortium states that some successful family businesses adopt a view of legacy that connects generations, creating dynamic legacies that uphold tradition while embracing innovation. The report, which was triggered by the Global Family Business Summit “The pathway to good: Sustaining family business legacy for wellbeing”, provides insights that suggest many family businesses are overcoming the 'legacy paradox' – the trade-off between being a source of identity and inspiration versus a liability if it is so entrenched in tradition that it stands in the way of innovation.

The report by KPMG Private Enterprise and the STEP Project Global Consortium brings together personal insights from the experiences of leading family business leaders combined with data on the impact of family legacy on their business performance collected from 2,683 family businesses in 80 countries, territories and territories . The survey data, which uses both qualitative and quantitative research, reveals that of the 45% who report strong legacy, the same group also report strong business performance and an even higher 53% report high sustainability – a strong combination for business and family success today and for generations to come and a reminder that legacy alone may be insufficient.

The annual report reinforces the importance of intergenerational entrepreneurship as a key driver of sustainable performance in family businesses, with inheritance alone not sufficient to guarantee long-term progress across generations. The report argues that heritage is a process, not an end result, with the source of heritage coming from many different factors. Legacies are often strengthened by intergenerational entrepreneurship among younger generations, which compels their predecessors to communicate openly about what matters to them and strengthen their entrepreneurial legacy and bridge what can sometimes seem like a generation gap.

The report takes a closer look at the true nature of heritage in today's world and provides a future-focused perspective where tradition and innovation coexist and examines where change needs to be embraced for business to remain resilient, competitive and relevant. The report confirms that heritage may need to focus less on the past and be seen as a critical building block for the future due to its positive contribution to business performance and the sustainability of the environment, society, employees and suppliers.

Andrea Calabrò, STEP Project Global Consortium Academic Director, and Director, IPAG Chair for Sustainable Family Business & Entrepreneurship, IPAG Business School, said: “Not only does heritage connect generations and ensure the continuity and legacy of business success, it also shapes the long-term vision of the family business and guides its strategic choices. However, today's environment presents new challenges for family business leaders who find it necessary to learn how to combine traditional values ​​with modern business strategies to build a dynamic legacy with future generations in mind.”

Different perspectives and priorities can shape how different generations perceive the importance of their heritage and the strategies they use to build and maintain it. These generational differences can also enrich the legacy of the family business, incorporating different perspectives and approaches that reflect the evolving dynamics of the business and wider society.

The participants of the Global Summit “The pathway to good: Sustaining family business legacy for wellbeing” 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 United Kingdom, and North and South America. With 'social legacy' heralded as the strongest legacy element from our research findings, the message was clear and served as an unmistakable call to action for family businesses to tap into their natural instincts to create 'sustainable performance' and develop a “dynamic legacy”. 

The report highlights how important it is for family businesses to embrace their heritage, as it can be the key to future successes: share the essence of your heritage with your family and management team, and finally, give the next generation of the family business the freedom to create her own legacy.

Robyn Langsford, Global Leader, KPMG Private Enterprise Family Business, KPMG International, and Partner in Charge, Family Business & Private Clients, KPMG Australia, commented: “Different perspectives and priorities can shape how different generations perceive the importance of their heritage and the strategies they use to build and maintain it. These generational differences can also enrich the legacy of the family business by incorporating different perspectives and approaches that reflect the evolving dynamics of the business and wider society.
And with the increased focus on environmental, social and governance (ESG) issues around the world, younger generations will likely be more interested in the social and business legacies of their family businesses than older generations who may continue to place greater value on material inheritances and the blood family. History doesn't necessarily repeat itself, but it does rhyme. It is imperative for the founders to create the 'beat' for the generations to come.”

The study shows that while there are regional similarities, data points vary between regions due to the influence of intergenerational entrepreneurship. This supports the idea that legacy alone will likely not be enough – legacy will need to be leveraged to help maximize business outcomes.

Dimitris Vakis, Managing Director and Head< /em> of the Family Business sectorat KPMG Cyprus, commented: “Family businesses thrive on the interplay of heritage and performance, where tradition meets innovation. Success is not inherited, it is built through intergenerational entrepreneurship. For long-term resilience and competitiveness, it is vital to see heritage as a dynamic process. Open communication between generations helps to bridge gaps, integrating different perspectives to shape a business that focuses on the future and sustainability. Embracing change and cultivating an entrepreneurial spirit in the family ensures that the business remains relevant and strong for years to come.”

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Source: www.kathimerini.com.cy

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