Secret of family business success: How legacy makes the difference!

Secret of family business success: How legacy makes the difference!

In a comprehensive study by WIFU researchers Dr. Matheus Franco and Prof. Dr. Thomas Clauß, who examines the role of legacy in family businesses, presents crucial insights into the long-term success of such companies. The study, titled “The Role of Legacy in Family Businesses,” highlights how values, identity and traditions can be preserved across generations. The research is based on a data set from over 2,000 companies from 71 countries, which underlines its international claim. uni-wh.de reports that researchers distinguish three key dimensions of legacy: social, biological and material legacy.

Social legacy, which includes values, norms and narratives, shows the strongest positive influence on company success. Companies that cultivate a strong social legacy achieve better results on social, environmental and economic levels. In contrast, the researchers identify that a one-sided focus on material aspects can be counterproductive as they weaken corporate social performance. This leads to the key finding that a combination of strong social and material legacies is seen as a superior approach.

The importance of the next generation

Another key aspect of the study is the role of the next generation. Companies that rely heavily on social and biological legacy benefit from actively involving successors in decision-making processes. Early involvement of successors has proven to be particularly beneficial for the long-term success of the company. The researchers recommend actively shaping the legacy and making it available as a strategic control tool. This means that regular legacy audits, targeted storytelling to convey values, and a balance between meaning orientation and structural clarity can be carried out.

In addition, it is found that a common understanding of legacy creates orientation, reduces conflicts and strengthens the future viability of companies. According to an accompanying study, these findings in the WIFU library are a valuable offering for family businesses that want to improve their strategic direction. wifu.de provides the results as practical recommendations, including the identification of six typical legacy types, including “responsible owners” and a “holistic” approach that balances intangible and tangible assets.

The study, which will be published in 2025, provides a detailed insight into the strategic importance of legacy for family businesses. Anyone who would like to find out more about the study or access the publications can do so free of charge via wifu.de do. Dr. Ruth Orenstrat is available for further information and can be contacted at ruth.orenstrat@wifu-stiftung.de or by telephone at +49 2302 8898303.