In a legal sense, a legacy is a gift, especially of money or personal property, bequeathed by will. More broadly, it is anything of value handed down from the past, as from an ancestor or predecessor. For example, one of the many legacies of ancient Greece is the idea of government based on direct democracy.
Let’s apply this concept of legacy to a family business. In fact, it is the concept of a legacy passed onto the next generation that establishes a true family business.
As a family business founder hands over leadership to a younger family member, there is actually much more transferred than just its material worth. It is this aspect of business legacy that we’ll discuss in this article.
When a business founder establishes his or her business with a long-term vision, that vision and the evolving business represent the values close to the founder’s heart. They represent something much more profound than the material assets and operations. This is something intrinsically more enduring they want to leave for their children and grandchildren. It incorporates the founder’s core values. It is this representation of themselves that they want remembered and nurtured by the next generation.
The essence of this legacy develops over time. As the founders pour themselves into their business, they naturally act out of their core values. These are reflected in how they engage with their local community; the respect, appreciation, and treatment they show their employees, customers, and suppliers; the reputation they and their business gain over time; and anything else of personal value that is brought into the business.
Creating a lasting business is tough work. But by knowing “why” they are doing so, the founders are able to keep pressing on through all the challenges that will ultimately arise. The vision of what the business can become, and all it has accomplished to this end, is the ultimate legacy of the business and the basis of that “why.”
Let’s take a look at one spectacularly successful family business that is now in its fourth generation of ownership.
Marvin Cedar & Lumber Company, established in 1912 and now named Marvin Family of Brands, is the premier producer of custom windows and doors in the U.S. In business for over 100 years, it is still family-held and managed. The company was founded by George G. Marvin, whose values are reflected in this description from the Marvin Story website:
“Honest and hard-working, George earned respect across the northern woodlands. He believed in the sanctity of a handshake and often loaned money to farmers and lumbermen who needed to get through the winter when work was scarce. The only record of the transaction would be a penciled note in George’s black pocket notebook. The need for year-round employment in sparsely populated northern Minnesota would become a recurring theme in the Marvin company history.
“During the Depression, George Marvin quietly helped his community. He provided Christmas trees for every family in Warroad. He delivered 100-pound bags of flour to needy families. One year, when crops were poor and farm families were near starvation, George arranged for each family to sell a truckload of pulpwood to a local paper company.
“Years after the Depression ended, stories began quietly circulating about George Marvin’s most magnificent gesture to his neighbors – one he never sought to take credit for during his lifetime.
“A local bank had failed. All the farm mortgages would come due immediately. Without the cash to pay off their mortgages, dozens of farmers would lose their land. George bought the bank, held the mortgages and the farmers paid him back over time.
“But George Marvin also was a shrewd businessman. Seeking a way to keep his lumberyard workers busy during the slow winter months, he designed a machine that turned scrap lumber into wooden stakes. Marvin sold the stakes to the state highway department.”
There is much more to the Marvin story and legacy, and the values described above remain a key part of the company’s legacy today. The Marvin family has incorporated these values—and more—into a well-thought-out succession plan that ensures the family legacy thrives over many generations to come.
Much can be learned from the Marvin story. The groundwork for a family business legacy is laid during the time of the founder. As it is nurtured and enhanced through successive family owners, it grows in both meaning and value through each generation.
As you inherit the reins of your family business, here are some questions to consider:
- What is your business legacy? Write out what you feel are the key contributors to that legacy.
- Why is this your legacy? How did this legacy evolve? How have family members contributed?
- What does this legacy mean to you? What does it mean to your family?
In future articles, we’ll go deeply into how you ensure your business legacy is sustained and is passed faithfully to the next generation or inheritor of your family business. We’ll also go into the nine key stages required for any successful family business transition to the next generation.