Legacy: A Strategic Resource Across Generations

by Paolo Morosetti

A fascinating concept in the family business field—widely adopted in business jargon—legacy is, first and foremost, a resource. It can help explain the enduring success or, conversely, the gradual decline of an organisation across generations. Recognising and understanding the nuanced distinctions among the various dimensions of legacy is essential not only for evaluating whether a legacy serves as a catalyst or constraint, but also for exploring its deep connection to continuity planning.

What Does Your Legacy Consist Of?

Legacy in family businesses unfolds across four interrelated dimensions: the founder’s legacy, the family legacy, the business legacy, and the entrepreneurial legacy. 

The founder’s legacy encompasses the knowledge, insights, and values shaped through the founder’s personal and professional journey. These are not limited to business acumen; they often include broader life lessons—on leadership, human relationships, resilience, and navigating complex socio-economic environments. In multigenerational firms, this legacy is frequently enriched by contributions from key figures in subsequent generations. These individuals, sometimes referred to as re-founders, reinterpret and expand upon the founder’s original vision, maintaining continuity with the family’s core values while ensuring alignment with a changing context in which the family enterprise must evolve.

The family legacy offers a complementary lens. It comprises the values, behaviours, traditions, routines, rituals, and symbolic artefacts that the family collectively recognises as its own. This dimension of legacy defines the family’s shared identity and fosters emotional cohesion. It is a form of social capital—binding generations together, encouraging collaboration over rivalry, and contributing to the family’s overall well-being. 

A third, distinctive expression of legacy is found within the business organisation. The family business legacy includes the purpose, principles, values, and rules that guide the firm’s ambitions and behaviours. It is expressed through the company's mission, vision, and culture. Over time, as the firm grows and adopts a more stakeholder-oriented approach, this legacy may partially diverge from that of the founder or the family. While the family’s influence remains part of the business ethos, the legacy is often reframed over time to meet the demands of a broader organisational environment.

Lastly, the entrepreneurial legacy carries particular significance in family enterprises. It reflects the drive, initiative, and innovative mindset that have enabled the family to build and renew its enterprise over time. This legacy is often passed down through storytelling—accounts of past ventures, including both their successes and failures. These narratives serve to inspire the next generation, reinforcing a culture of resilience and opportunity-seeking. The entrepreneurial legacy, in this sense, is not merely historical; it is aspirational. It encourages each generation to act as stewards of the family’s entrepreneurial spirit, adapting and renewing it in response to emerging challenges and opportunities.

Why Transmit the Legacy? Why Receive It?

Legacy only exists when there is a transmission and a reception. It requires both a willing transmitter and a receptive successor.

Some see legacy as a way to preserve identity and strengthen family cohesion. Others view it as a moral responsibility—an expression of gratitude toward predecessors and commitment to successors. For many, it reflects emotional attachment, serving as a compass for navigating identity and generational transition.

Beyond this, legacy has a generative function. It is not just a memory of the past—it is a platform for future-oriented action. This requires what we can call innovation through tradition: honouring the past while enabling evolution. The senior generation must define and communicate the legacy while remaining open to the dreams and contributions of the next generation. In turn, the next generation must receive it thoughtfully, adapt it, and act as responsible stewards.

How to Transmit Legacy?

In early years, legacy is transmitted through primary socialisation—by role modelling, parent-child dialogue, and shared experiences (e.g., company visits, travel, or family events with other business-owning families).

As children mature, structured learning becomes essential. This includes documenting family and business history, clarifying economic and non-economic values, aligning personal and shared goals, and introducing ownership and governance principles. Exposure to the company’s culture and non-financial performance should also begin at this stage.

When next-generation members reach adulthood, they should be gradually integrated into family and business governance—areas where legacy is applied in decision-making. This transition demands clear governance structures and leadership processes to avoid intergenerational tensions and foster collaboration. Succession should be dialogical, not unidirectional.

Spouses and long-term partners must also be included. Their role in shaping the next generation’s mindset is significant. Excluding them in the name of “keeping the business in the family” often creates distance and undermines shared purpose.

Ultimately, a successful legacy transition depends on forward-looking leadership: individuals capable of respecting tradition while embracing change. They must discern which aspects of legacy to preserve—sometimes symbolically—and which to let go, ensuring the family remains cohesive and the business future-ready.

Good Legacy or Bad Legacy?

Legacy should be evaluated not only by its intent but by its impact over time. A good legacy provides a strong identity, attracts the next generation and other key stakeholders, supports longevity, and fuels innovation. It enables the family and the business to evolve without losing their core essence. A bad legacy is marked by rigidity: excessive reverence for the past, resistance to change, obsolete rituals, and outdated governance structures. It creates obstacles to adaptation and limits entrepreneurial energy.

In closing

Every business family has a duty to reflect periodically on its legacy. Is it supporting continuity, relevance, and future growth? Or is it holding the family and the business back? Legacy, when managed intentionally, is not a relic of the past. It is a living resource—capable of regenerating itself and shaping the future.

Photo credit: iStock # 598234544

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