How Indian family businesses balance tradition with innovation: ISB announces global report that uncovers power of legacy

By Team Marcomm May 30, 2024

The Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business (ISB), a long-standing member affiliate of the STEP Project Global Consortium, has announced the release of a revelatory report exploring the impact of legacy on family business performance. It addresses how some successful business families adopt a future-centric view of legacy, which binds generations together, creating dynamic legacies that adhere to tradition while embracing innovation as well.

The report - titled ‘Unlocking Legacy: The Path to Superior Growth in Family Businesses’ - is a collaboration between KPMG Private Enterprise and the STEP Project Global Consortium. It was released in the recent STEP Global conference in Amalfi Coast, Italy, in the presence of Prof. Sougata Ray, Executive Director of the Thomas Schmidheiny Centre for Family Enterprise at ISB, and representatives of other contributing STEP affiliates.

Insights from India and the world

It brings insights from 2,683 family business leaders across 80 countries and territories, including India. It reveals a strong correlation between a family business’s legacy and its long-term success. Businesses with strong legacies demonstrate superior performance and a firm dedication to environmental, social, and governance (ESG) principles. Additionally, many families in business are successfully addressing the ‘legacy paradox’, managing the delicate balance between serving as a source of identity and inspiration while avoiding becoming too entrenched in tradition, which can hinder adaptability and progress.

It reveals that Indian family businesses score 78% on legacy importance, matching the global average. This highlights the deep-rooted value of Indian family businesses in maintaining their cultural identity.

When it comes to transgenerational entrepreneurship, Indian businesses score 76%, slightly below the European and Asia-Pacific averages of 77%, indicating a need for increased focus on fostering entrepreneurial initiatives across generations.

On environmental sustainability, Indian family businesses align with the global average of 78%, suggesting a solid foundation. But further investigation also reveals room for improvement, especially in environmental practices, in which European firms are leading.

Key Findings from Global Report

Legacy as a Driver of Success: 45% of family businesses with strong legacies report high business performance compared to their competitors.

Sustainability and Legacy: 53% of surveyed family businesses with strong legacies demonstrate high sustainability performance across community, environmental, employee, and supplier aspects.

The Legacy Matrix: The report introduces a framework identifying four distinct legacy types based on the interplay between legacy strength and transgenerational entrepreneurship: Static, Preservative, Evolving, and Dynamic.

Pathways to a Dynamic Legacy: The report offers practical guidance for family businesses to transition towards a ‘Dynamic Legacy’, characterised by high performance and a future-oriented approach.


Dr Nupur Pavan Bang, Academic Director, Thomas Schmidheiny Centre for Family Enterprise at ISB, emphasised, “This report underscores the importance of legacy as a strategic asset that provides a competitive advantage for family businesses. By understanding their legacy type and actively shaping it, family businesses can unlock significant growth potential, ensure long-term sustainability, and contribute positively to society."

The report's insights are particularly relevant for Indian family businesses navigating a rapidly changing business landscape, said Professor Sougata Ray.

He added, “While Indian family businesses demonstrate a commendable commitment to legacy, at par with the global average, there's potential to further enhance transgenerational entrepreneurship and employee-centric sustainability practices. By learning from global best practices and adapting them to the Indian context, family businesses in India can unlock new avenues for growth and impact."

With data and insights, the report highlights legacy as an ongoing process shaped by various factors, with transgenerational entrepreneurship playing a key role in amplifying legacies through open communication and bridging generational divides. It offers a future-oriented perspective that reconciles tradition with innovation, emphasising the need for businesses to embrace change to maintain resilience, competitiveness, and relevance in today's dynamic landscape.