{"id":1786,"date":"2025-10-15T08:05:23","date_gmt":"2025-10-15T06:05:23","guid":{"rendered":"https:\/\/blog.iese.edu\/family-business\/?p=1786"},"modified":"2025-12-09T12:38:49","modified_gmt":"2025-12-09T11:38:49","slug":"four-pillars-values-transmission","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/family-business\/2025\/four-pillars-values-transmission\/","title":{"rendered":"Multigenerational family firms: the four pillars of values transmission"},"content":{"rendered":"

Guest contributor: Tarek el Sehity<\/strong><\/span><\/h2>\n

Tarek el Sehity is a researcher and lecturer at Sigmund Freud University in Vienna.<\/strong><\/p>\n

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As explored in the first article of this two-part series<\/a>, core family values represent a central differentiating factor<\/strong> between family and non-family enterprises, as well as a strategic driver<\/strong>.<\/p>\n

Rather than a static, top-down process, our recent study<\/a> found that values can become a powerful organizational asset<\/strong> when they evolve through a dynamic process of co-creation <\/strong>that actively integrates the insights and contributions of each generation.<\/p>\n

In an atmosphere of mutual respect and appreciation, family members collectively determine which values are retained, which are let go and which are adapted<\/strong> to better reflect contemporary realities.<\/p>\n

In this second installment, we outline the four pillars that sustain this co-creative process<\/strong>, as well as actionable insights<\/strong> to make your foundational family values visible throughout the organization.<\/p>\n

Co-creating values: four core pillars<\/strong><\/span><\/h2>\n

This co-creative approach reflects the evolving nature of family business, where family composites\u2014shared meanings that bridge generations<\/strong>\u2014become integral to strategic adaptation.<\/p>\n

Successfully transmitting values from one generation to the next depends on four essential components:<\/p>\n

1 – Mutual recognition<\/strong><\/p>\n

Families cultivate psychological safety<\/strong> when each generation acknowledges the legitimacy of the other\u2019s perspective.<\/p>\n

Senior leaders must recognize the unique contributions of younger members: fresh ideas, innovative perspectives and digital fluency, for instance. Meanwhile, junior members honor their elders\u2019 experience and stewardship.<\/p>\n

This reciprocal respect becomes the basis for all other processes<\/strong>.<\/p>\n

2 – Negotiation<\/strong><\/p>\n

Values take shape through interactions around dinner tables and in boardrooms ,when family members pose essential questions<\/strong> like \u201cWhy do we approach things this way?\u201d and \u201cHow does this value translate into action?\u201d<\/p>\n

Negotiation is both concrete and continuous<\/strong>, often catalyzed by real-time decisions that demand immediate clarity.<\/p>\n

3 – Reinterpretation<\/strong><\/p>\n

Family values remain relevant when family-owned firms are able to reimagine their expression.<\/strong>\u00a0 For example, a family foundation originally dedicated to fighting substance addiction might expand its mission to address digital dependencies.<\/p>\n

Reinterpretation preserves the moral essence<\/strong> while adapting applications to emerging realities<\/p>\n

4 – Adoption<\/strong><\/p>\n

Influence flows bidirectionally<\/strong>. Senior leaders embrace next-generation initiatives when they recognize their underlying rationale, potential benefits and alignment with family values.<\/p>\n

Likewise, junior members actively commit to lived values<\/strong> while experiencing their tangible benefits in the family enterprise. Adoption is what makes co-creation endure.<\/p>\n

Generational crossroads: when are tensions most likely emerge?<\/span><\/strong><\/h2>\n

A notable pattern emerged across our sample of 23 multigenerational family-owned firms<\/strong>: while values often remained consistent with the founding generation, critical reorientation typically occurred between the second and third generations<\/strong>.<\/p>\n

Our interview-based study found this generational transition to be when operating authority and identity stakes<\/strong> most visibly collided.<\/p>\n

Recognizing this pattern allows families to normalize tension and channel it toward constructive evolution<\/strong> rather than zero-sum conflict.<\/p>\n

From theory to practice<\/strong><\/span><\/h2>\n