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Leaving a Legacy of Leadership | Part 1

Leaving a Legacy of Leadership | Part 1

“According to the U.S. Bureau of the Census, about 90 percent of American businesses are family-owned or controlled.” ( That statistic apparently offers an impressive hope for the future prosperity of many families, but in fact, “less than one-third of family-owned businesses survive the transition from the first generation of ownership to the second, and only 13 percent . . . remain in the family over 60 years.” Clearly, in America, the transfer of business leadership within families faces significant challenges.

A scene in the movie “Crazy Rich Asians” surely surprised many Americans when the Young family matriarch expressed dripping contempt for our custom of teaching our children to “pursue their passions” rather than work together to preserve family tradition, business leadership, and wealth. The movie certainly offered a sobering critique of American values. Adam and Eve’s fall into sin does affect all cultures, and all worldly values include limits. Americans traditionally value freedom above everything—certainly more highly than we value tradition, wealth, position, or family heritage. Lest such a value as freedom become a false absolute, we would do well to challenge it regularly.

My recent travels in Southeast Asia drew my attention to recent news stories about a particular Asian family that offers an interesting window into family values of business leadership transfer. The grandfather and patriarch of the family founded a business dealing in one of his nation’s most cherished cultural artifacts. His business model involved door-to-door sales of such items, and while it created wealth for the family, one of his granddaughters points out that he did not leave “a business legacy” for the children. She seems to mean that he left a profitable, but not very complex business. His sons took on the responsibility of adding manufacturing and greater business sophistication and diversification into new areas, while the daughters married ambitious men and helped them build their own businesses. The grandchildren of the family—both men and women—figure among the most influential and wealthy people of their country, almost all of whom either work in significant roles in the original family business or have built their own companies in related enterprises or in investment or real estate development or other ventures.

How did this family pass on their leadership skills and wealth successfully? One business magazine article describes their family method as that of a hawk teaching a nestling (or “eyas”) to fly. The hawk takes the eyas high into the air and drops it. If it follows its instinct and starts flying, all is well. If it does not learn, the hawk swoops down and catches it, then takes it right back up to the heights to drop it again. Eventually the eyas catches on to flying and will no longer need to be caught. This family gives its children real business challenges from an early age, empowers them to do the job, and expects them to learn. If they fail, they are caught, and given another challenge.

The parents in this family also ensure a first-rate education for their kids. They have studied at many of the finest schools in the world—sent away at the age of 18 or earlier to excel in their studies. As the family follows Christ, some of the children have opted for building a solid faith basis in Christian higher education before going on for graduate training at higher-ranking schools. Getting a first-rate business education has opened up new ideas and strategies. One of the grandchildren appears on the Forbes richest list for his country, largely on the basis of his own creativity and success.

Finally, the parents firmly believed in gender equality in the nurture and education of their children. Many families of their ethnic group show a strong preference for their sons, but this family treated every child the same—giving them equal opportunities and pushing them hard to succeed. Thus they managed to form self-starters who grew up to be independent and strong.

Whether in families or in organizations, leadership legacies differ from culture to culture, but universal principles probably do exist. While I wrote this piece about an Asian family, several of our best American donor families at Northwest University have achieved successful leadership and wealth transfer through the same principles. Among them, (1) giving real business experience at an early age, (2) ensuring a strong formal education, and (3) treating everyone the same regardless of gender and maintaining high expectations for them. Undue indulgence, helicoptering over-protection, and low expectations almost guarantee a failure to thrive.

The benefits of successful leadership transfer are not limited to families, nor do they stop with wealth transfer. When families and organizations focus intentionally on the principles that ensure successful handoffs of leadership from generation to generation, their mission can survive in strength and ensure better service to society as a whole. It is precisely that preservation of excellence in service that makes wealth acquisition and transfer (whether personal or corporate) a moral enterprise worth pursuing.

Read "Leaving a Legacy of Leadership | Part 2"

Read Part 2