A company's "vital patrimony" is a set of memories and/or possessions that a family identifies as testimony or symbolic of its existence. This concept was the focus on the Continuous Education session, "The Incorporation of Vital Patrimony in the Family Business," held on May 7 on IESE's Madrid Campus.
The session organized by IESE's Alumni Association focused on the idea of vital patrimony as a tool that, in the service of business families and their companies, serves different purposes. Among these uses is the transferrence of a legacy from one generation to another.
IESE Professor and holder of IESE's Chair of Family BusinessJosep Tàpies discussed three elements that comprise the foundation of this idea: beliefs, values and myths.
"What has to be done to preserve and develop the patrimony of business families over time? Many families often commit the error of focusing on the management of financial capital. But the real goal should be managing human and intellectual capital, since that's the only way to ensure the longevity of a family business. The key to endurance lies in managing talent," he said.
A Pioneering Initiative
Felipe Gómez-Pallete, partner and founder of Casa Da Qiao, analyzed discussed how the new field of vital patrimony builds upon IESE's family business research activities. "This is a pioneering initiative and a merit for IESE. But what is it and what purpose does it serve? It is an asset and a way to represent the company."
For practical purposes, vital patrimony is a set of ordered elements (music, manuscripts, testimonials, photographs, objects and documents) that make up the legacy of the business family. The opportunity to have clear and organized access to this history is an asset for the future of any company, he said.
"A deep knowledge of the company's past is one of the most powerful tools for preparing for the future," said Gómez-Pallete.
Once traced and defined, vital patrimony serves to "prepare for the future in a proactive way." It also serves to "capture the present" and "give value to the past."
This is because the history of a company shapes its culture, bringing family members together around common ideals. It can also help to reflect on the organization's origins, resolve conflicts and manage changes that may be necessary.
Survival of the Business
The ultimate objective of the business family is survival of the business in the long term. To carry this out, the family should integrate its goals, aspirtations, ideas and expectations with those of the firm, the speakers said.
At the same time, the continuation of the family itself must be a primary goal. Companies should seek a continuation of the culture and the family's values within the philosophy of the firm. Tools such as family meetings, work session and board meetings can help accomplish this.
Once the business family has reflected and analyzed key issues involving vital patrimony, the most important challenge remains: family members have to agree on what they want to represent. They must decide upon what values, traditions and experiences that they want to preserve so that future generations will also feel compelled to join the business.