Entrepreneurial Legacies

Much has been written about legacies. I would like to explore the topic as well, but with a bit of a different slant. One of the first questions usually asked is, “How do you want to be remembered after you are gone?” Does the name Daniel K. Ludwig mean anything? How about Oliver H. Payne or Donald Fisher? All three of these people were billionaires. Ludwig (1897-1995) was a shipping magnate; Payne (1839-1917) was a partner with John D. Rockefeller in Standard Oil, and Fisher (1928-2009) co-founded The Gap clothing chain with his wife. The point is that each was a very, very successful and rich man and yet most of us probably never heard of them. So much for wealth being a legacy.

Here is the thing. After we are gone almost every single one of us will not be a passing thought for our descendants, much less for the public in general. Of course, our immediate family will remember us . . . for a while. My dad has been gone since 1988 and not a day goes by that I don’t think about him. But I doubt seriously that either of our daughters does. Is this sounding macabre or depressing? It shouldn’t. It is just the way life is. Memories of our walk on this planet are like footprints in the sand. They are there for a fleeting instant and then they are washed away.

I personally don’t care if I’m remembered at all. But here is the silver lining in all of this. We can live on forever through the good work that we do today. A couple of things matter to me the most where legacies are concerned. First, I want to make sure that the companies that I have helped to create exist for the long term. There are hundreds of families whose loved ones are my team members. It is important to me that these families live and thrive long after I am gone. Building a sustainable organization is the linchpin for making this a reality. This means that our corporate infrastructure must be robust; our financial condition strong; our core values are constantly at the forefront, and we remain committed to our long-range vision.

The other aspect of the legacy I wish to leave involves philanthropy. I do not want a building, a street or anything else to be named after me. My wife and I are committed to investing some of our hard-earned dollars in philanthropic causes that help other people. Educational scholarship programs that provide funding in perpetuity are one of the steps we have taken in this regard. Helping other entrepreneurs build their own sustainable companies through mentoring is another passion of mine. And I am not interested in waiting until I die to begin realizing the results of our philanthropic efforts. I want to see the results today – not decades from now after I am dead and gone (and cannot witness the results then anyway!).

The legacy we choose to leave is very personal for each of us. I am not about to pass judgment on these choices. However, one thing that is for certain is that itis unlikely that any of us will be remembered a generation or two after we are gone. So, it probably makes sense to think about making our mark on the future in a way that will be more enduring than our name and our face.

We will be remembered not for who we are today, but for how we benefit mankind tomorrow. The choice is ours whether this memory will be footprints in the sand or permanent steppingstones to a better world.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The End

This topic may be uncomfortable for some but it’s a very necessary discussion to have. What happens to your organization if you die tomorrow? Would it be a loss so catastrophic that the company fails? Or have you created a sustainable business that can survive and thrive without you? Many entrepreneurs neglect this subject – after all we think we have a lot of good years left. And besides, it’s a real downer to think about dying.

One of my most important objectives is to make sure that each of the various companies with which I’m involved is sustainable for the long haul. I care deeply for the hundreds of families that depend upon us for their livelihood. Even if your company only has six employees, they likely have families too that are counting on you. So we need to take the steps necessary to ensure sustainability. Let’s examine the different components of a sustainability plan.

Growing future leaders is critical to sustainability. And avoiding a power struggle is equally critical. Who is your heir apparent? I don’t believe that it’s healthy for any leadership team to wonder at any point in time who will step in to lead in the event of the demise of the leader at any level. If your potential successor isn’t yet apparent, perhaps someone you know very well and trust could be designated to step in on an interim basis. There’s no doubt that identifying such a person may be tough, but this is tough stuff and your team deserves to know who is going to succeed you. Focusing on sustainability at all times forces us to make leadership development a top priority. A quarterly review of a hypothetical organizational chart is a good approach to spotting the gaps and filling them promptly.

If we are the majority owner of our company, what will happen to the ownership going forward? Will it be left to one or more family members? If so, what will they plan to do with the business? Many heirs aren’t prepared to own a company and all that is entailed. It’s crucial to have a conversation with family members and offer them a clear understanding about what will happen to the ownership if we die suddenly. What if there are multiple owners? Buy/sell agreements are an excellent tool for situations like this and can be funded by insurance. Such agreements should be precise on exactly how a deceased owner’s interest is to be valued.

Let’s talk money. The death of an entrepreneur can have far-reaching consequences financially. There may be covenants that accelerate loans. Perhaps the entrepreneur has been self-funding a certain project or expansion of the business. It’s also possible that without the entrepreneur’s balance sheet, credit facilities may dry up creating varying degrees of hardship. Again, insurance can help but may not be the long-term solution. It may be prudent to identify a potential financial partner that could be called upon to help. Of course there’s a price to pay for this kind of support – an ownership stake or a percentage of the profits – but such an arrangement may be necessary for sustainability. Now is the time to figure this out while we’re still alive to do so.

Finally we need to contemplate how our vision and the culture we have created can be preserved. This is the trickiest and most intangible task that we will face in planning for sustainability. Have we sufficiently communicated our vision; reinforced it repeatedly, and is it shared by all? Many leaders are so consumed by tactical decisions that the vision for their organization is muddled. And it goes without saying that our culture is built around our vision. Maintaining a vibrant culture can only be accomplished if it is front and center every day. Do we have core values? Are we truly living them?

Creating a sustainable organization that will survive us requires intense planning and tough decision making. Doing so is the greatest gift we can give to our team members.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

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