Integrating innovation and legacy is crucial for the continued success of family businesses.
Legacy provides a sense of identity, purpose and continuity, while innovation drives growth and competitiveness. So how can you balance the two?
Involving multiple generations in decision-making fosters a culture that respects tradition and embraces new ideas, creating a unique competitive advantage, ensuring long-term success and sustainability.
What is legacy?
Legacy represents the core values and purpose built over generations in a long-standing family business. It is the foundation upon which the business stands, providing a sense of identity and continuity.
Family businesses often face the unique challenge of maintaining their brand, the trust and loyalty built up with stakeholders, while navigating remaining competitive in a rapidly changing market.
Innovation can come in many forms including new processes, technologies, recognising different market needs and responses to enhance offerings or operations. According to the 2023 Family Business Survey, two of the top five challenges for Australian family businesses were in developing/launching new products and in expanding into new markets. Fresh ideas to meet ever-changing customer expectations are required, and having younger generations involved in making suggestions can sometimes provide for the ideas needed to stimulate a conversation with a growth mindset.
What’s the key to balancing legacy and innovation?
The key to successfully balancing these two elements of legacy and innovation lie in integrating them harmoniously. Involving multiple generations in the decision-making process can foster a culture of innovation that respects the past.
Younger family members can bring fresh perspectives and technological integration, while older generations provide wisdom and experience. This collaborative approach ensures that the business remains relevant and resilient without losing its essence.
Effective and respectful communication is needed to foster a culture of sharing ideas and creative solutions, while paying respect to the legacy that has been developed over time.
Family businesses that have effective communication between members can strike a balance between innovation and legacy creating a unique competitive advantage, ensuring long-term success and sustainability.
We’re here to help
Our team at Grant Thornton is made up of qualified consultants who understand family dynamics and are accredited as specialist advisers.
We can assist through implementing strategies such as steering family Boards to foster greater communication amongst family members. Contact our team of experts today for advice around your family business.
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