The discourse surrounding global family enterprises in 2024 and 2025 shifted fundamentally away from preserving legacy to dynamic legacy. Research clearly indicates that the priorities of the most successful family business across the globe are centred around 3 priority areas under the umbrella of dynamic legacy. What are these 3 priority areas? Are these also your 3 priority areas as family business owner or leader?

Dynamic legacy requires that family businesses achieve superior performance by systematically balancing deep-rooted tradition with continuous innovation. The 2024 research report, “Unlocking Legacy—the path to superior growth for family business,” established a direct link between high business performance and the successful adoption of a ‘dynamic legacy’. This concept moves the strategic focus beyond nostalgic preservation of the past to the active utilisation of core family values and heritage as a distinct competitive advantage, simultaneously embracing change and innovation.  Furthermore, the research confirms that the very definition of growth has expanded. It is no longer restricted to financial expansion but explicitly includes the necessity of building adaptability, strengthening purpose, and contributing to a more sustainable future.

Subsequent analysis in the 2025 Global Family Business Report deepened this understanding, identifying the core drivers that underpin this trajectory of superior growth as part of this dynamic legacy is based and achieved through three interconnect elements that have therefore become 3 main priorities:

• Effective governance structures & leadership
• Commitment to sustainability across generations (succession planning)
• The capacity for strategic investment especially in Digital Transformation.  

These pillars are not treated in isolation; the absence of effective governance, for example, often results in the failure to resolve internal conflicts over capital allocation, thereby impeding strategic investment capacity.

Business & Family governance provides the essential framework that enables family-owned enterprises to balance often conflicting family and business interests, thereby promoting stability and continuity across generations. With corporate governance on one hand, which focuses primarily on protecting shareholder interest and family governance on the other hand that is designed to bridge personal and business concerns. The 2025 literature highlights that these structures are critical for mitigating the inherent risks of emotional interference in decision-making.  The key governance tools analysed for their effectiveness in promoting stability include a strong & effective Board of Directors, Family Councils & Family Constitutions (Charters). A Family Constitution serves to outline the family’s shared values, vision, ownership rights, and crucially, set standards for conflict resolution. Although these documents are often non-binding, they are analysed for their function in minimising potential disputes by establishing an objective framework before conflict arises. This provides a necessary objective anchor point to buffer the business from familial emotion, functioning as a critical mechanism for preserving family harmony. In large, multi-generational enterprises, Family Councils are invaluable. They offer a structured, formal platform for inclusive discussion of both family and business matters, ensuring diverse generational perspectives are aligned and coordinating interests, especially when ownership is decentralized. This infrastructure helps to maintain continuity by establishing shared objectives and clearly defined roles.

Succession failure remains the single most dangerous vulnerability for family enterprises. Statistics paint a sobering picture: while roughly 70% of family businesses aspire to pass ownership to the next generation, only 30% successfully navigate the transition, a number that drops further to less than 15% by the third generation. A significant contributor to this high failure rate is the fact that nearly two-thirds of family businesses lack a documented and clearly communicated succession plan.  Research confirms that the struggle lies not in business acumen but in managing the complex interplay of family, ownership, and business alignment. The Harvard 3 Circle Family Business Model is identified as an invaluable diagnostic tool for understanding this complexity. The model separates the three overlapping spheres: the Family (people connected by blood or marriage), Ownership (individuals with financial stakes), and Business (operations and employees).  Succession issues commonly stem from the ambiguous overlapping areas of these circles. Specific failures include a lack of clarity around roles (e.g., whether the eldest child is automatically the next CEO), resistance to change from the incumbent generation, and, most critically, emotional decision-making. The personal nature of family businesses means that decisions are often based on feelings or kinship rather than objective strategic fitness, directly driving internal conflict and succession failure.   The overall imperative derived from applying the model is the necessity of achieving “alignment across all three” circles. The value of the 3 Circle Model moves beyond simple definition to advocating its use as a continuous strategic diagnostic. It clarifies where formal governance rules—pertaining to meritocracy, compensation, and entry requirements—must be applied to buffer the business sphere from familial emotion. The systematic decay in transition success across generations suggests that many initial successions rely on the founder’s charisma or ad-hoc arrangements, which fail to institutionalize scalable alignment processes needed to manage the growth and diversity of later family and ownership groups.  

Family businesses are increasingly engaging with the digital era, yet 2024 and 2025 research indicates that successful Digital Transformation (DT) requires a preparedness that goes far beyond merely purchasing new technology. A study using fuzzy-set Qualitative Comparative Analysis (fsQCA) identified that success in DT, particularly regarding the adoption of technologies like Customer Relationship Management (CRM) and digital marketing, is highly dependent on the combined presence of key factors.The five essential Critical Success Factors (CSFs) identified include Organizational Culture, Change Management, Knowledge, IT Systems, and DT Strategy. The analysis confirms that the successful use of “second-generation” technologies requires the combined presence of these factors. This finding suggests that capital investment in technology is likely wasted without prerequisite cultural and strategic preparation. DT is, therefore, primarily a leadership challenge, demanding that leaders prioritize change management, training, and knowledge development over simple hardware upgrades.  While family businesses must demonstrate agility and embrace innovation , the analysis warns that simply reaching the “digitalization stage of business processes” is often insufficient to secure a lasting competitive advantage. To truly leverage DT, family businesses must aim for the reinvention of the business model.  A significant challenge identified in the research is the tendency for family businesses to exhibit a greater aversion to risk associated with technological innovation. This resistance is not purely economic; it is rooted in the fundamental concern for protecting the socio-emotional dimension of their heritage (SEW) and the direct, personal impact strategic decisions have on the entrepreneurial family’s well-being.  This dynamic implies that management must develop DT strategies that explicitly address and mitigate perceived risks to gain family buy-in. Framing DT as a strategic necessity that protects the long-term legacy by ensuring competitiveness, rather than threatening the status quo, is a crucial managerial implication derived from this body of work. Furthermore, the prominence of digital collaboration tools (such as marketplaces and social networks) in usage patterns highlights the importance of leveraging external partnerships as a means to accelerate transformation and distribute the risk associated with innovation.  As research increasingly links digital transformation with the high-risk domain of Artificial Intelligence (AI) , the findings regarding cultural preparedness for less disruptive technologies serve as an important warning. If firms struggle with basic CRM adoption due to cultural gaps, the challenge posed by integrating AI will be exponentially greater.  

In conclusion, the confluence of research published in 2024 and 2025 presents a comprehensive mandate for family business leaders to transition from reactive management to proactive strategic engineering across governance, succession and digital innovation. This means that family businesses must integrate the concept of dynamic legacy into all strategic planning and leadership training, focusing on utilising heritage as a competitive filter for market agility. This means family businesses must prioritise effective Governance, Strategic Investments in Digital that possibly lead to a review of the Business Model and engineer resilience proactively through proper succession planning. If these are not your priorities today I believe you need to find time and think why these are priorities for the most successful family business around the globe and not for your family business.