Business Family Legacies, Interpretations, and Narratives
A joint paper by Zita Nikoletta Verbényi and Dominik v. Eynern
This article tackles facets of how nuanced interpretations and family narratives can support multigenerational business families in their efforts to reach enhanced communication and a solid governance, and, consequently, future-proof their legacy.
What Do We Know, What We Don’t Know, and What Should We Know
First part by Zita Nikoletta Verbényi:
A Plethora of Complexity
The current pandemic-related uncertainties and more available critical time for reflections have been prompting multigenerational family businesses and their offices to run substantial restructuring and re-evaluation exercises, as well as to recalibrate their long-term vision and strategy.
This crisis is not only triggering financial upheavals, cash challenges, but also new risks that are likely to threaten the patrimony of families in business. [1] In fact, it’s striking to hear from large business-owning families around the world, that they don’t think their family business will exist in thirty or forty years from now, at least not under their family’s control and/or leadership. However, this is not necessarily due to the pandemic, as it’s a well-researched fact that more multigenerational a family business is, the more resilient they are having had to succeed and innovate in different crises which fortified them with further strength.
The number of increasingly disappearing patrimonies and family business succession failures have already been alarming for many years with only around 10% of all family firms making it into a third generation and 3% to the fourth globally. However, it’s become even more critical to take serious action to increase successful generational transitions as we are in the midst of the greatest wealth transfer in history. The stake for families to succeed in their successions is vital to continue building on their legacy.
As a result of these ongoing transitions, families feel an increased need to understand, and also interpret what’s behind their multifaceted family and business dynamics, various legacy milestones, traditions, challenges, broader value framework, responsibilities, goals, and aspirations. This important quest to make sense of it all and run such ruminations as individuals, as well as a family, will enable families better articulate their critical legacy patterns, sharpen key narratives and strategy points, and reinforce long-term alignment. Such exercises will also support the family’s soft landing into their future for generations to come.
Historical Knowledge and Legacy Patterns
Looking into family legacies, major multigenerational families’ history span over many decades and even centuries, e.g., when we think of members of the Henokiens, capturing hundreds or thousands of family characters touching upon various eras. Family business legacies don’t only correlate with geopolitical, economic, social, cultural, historic shifts, movements, and events, they also have many of their own family eras, their familyisms, along with their unique sets of patterns and overarching leitmotivs created by the most charismatic or influential family leaders.
As an analogy, we could think of a family legacy as a Gesamtkunstwerk, a cornucopia of different melted and multi-layered compositions of various art styles, techniques, and art forms knitted together and running across epochs intertwined in vertical and horizontal overlaps. During the different family eras some styles or figures show a more dominant presence than others, so do their different legacy marks; e.g., the heads of the family and the ones who created, controlled, and shaped the overarching family narratives.
These layered structures represent the iconology of a multigenerational legacy family with the entire historical, emotional, cultural, economic, and family context alongside with the iconography e.g., of the characters and their attributes displayed in a family’s history.
Consequently, there is a whole archaeology and anthropology that we can unearth from each series of familyisms and how these are connected to the respective societies, cultures, economies, and the overall impact they had on them and vice versa. How do we capture the historic family members and their legacies, though? How can we unveil the internal dynamism, the interplay of the different figures, and how do we interpret these important findings?
From Fusing Horizons to Co-Creating
Firstly, we are facing the matter of atemporality; and its historic and subjective aspects of interpretation. Are the questions that family members pose themselves now would have stirred a discourse also for their ancestors? How do we engage with, decode, understand, and interpret any events, personalities, or stories in a chronological horizon? How can we step out of our perceived temporality to understand better contexts from different eras?
How do we disregard any pretexts, historical insights, and presuppositions that we might hold whilst screening these and transcoding our observations? Especially, as these conversations happened in different formats, touched upon different contexts, and had potentially been driven by different intentions, social and economic, and cultural interest points. How approachability of historic traits may have an effect on our interpretation? How do we pose questions that would not have been self-evident in the selected era and how can we ensure not to miss touchpoints that could be vital and relevant currently in the process of understanding a family character or a critical event?
Our questions remain ours, however, if we reinterpret scenarios, we will not simply transmit a historic state but already its remodelled version with the interpreted intention, with the additional cultural and social responsibility. Asking questions requires reflection and self-reflection, and for family members to have an insatiable commitment of constant re-examination of their history to pass down their perspectives to the next generation is vital. As if there were freezing reverence in a format of a photograph and then open it up for further re-interpretations.
As Martin Heidegger pointed out; interpreting is when we are attached ontologically to the interpretable object, we are related to what we seek to understand, however, we are not reconstructing it but openly recreating the meaning. Our creative yet responsive disclosure of hermeneutic possibilities is what Heidegger calls “preservation,” because it works to keep the world opened by the work alive historically as a way of seeing and understanding. [2]
The notion that our point-of-view is bound to a location and time is already easily challengeable, however, if family members were to merely contemplate and have a passive observer hat on, even if that were a critical one, they would not be able to elevate themselves to the horizon of the story/narrative/legacy creator as a post-creator or as a co-creator. They can only do so if they engage, place themselves imaginatively into the character of the founder/other family members and interpret ideas and events by fusing these horizons thus removing themselves from the notion of temporality. This way, they will be better conditioned to draw new connection lines, add their marks to these, and continue the storylines themselves.
Each family member is compost of many strands of the family as well as their own kaleidoscope composed of colourful patterned shapes depending on the geo-cultural routes they took, languages they speak, education, beliefs, impressions, and experiences they had and how the different conditioning and interconnected relationships formed their character. They all bring their own unique originality of value proposition and competencies into the family’s legacy pool, and all these different fabrics and crafts make up the families’ existence.
The success of interpretation happens when family members not only understand the various factors but also push themselves to contribute with a new meaning potential. A family legacy should be driven by a participatory design. Success is not in a quantitative wholeness, though. It’s in the engagement with each other’s thought processes, rather than biasing them. It’s in how the different contexts interplay with each other, and how we seek to merge our horizons and embark on co-creation journeys.
As Hans-Georg Gadamer highlighted, historical horizons are inevitable to the development of the horizon of the present. There is no more an isolated horizon of the present in itself than there are historical horizons that have to be acquired. Rather, understanding is always the fusion of these horizons supposedly existing by themselves.[3]
Family Legacies and the Fourth Dimension
Families oftentimes assume that their family language and legacy exists and it’s theirs. Like a statue that they could walk around and inspect at any time. Hence, families tend to also assume that they are aware of the legacy patterns and understand their legacy. They were brought up with it, and they are creating their own universal semantic and syntactic “knowledge” that they use as a metalanguage and object language. If we think of the classical hermeneutic assumption suggesting that there was one right interpretation and the task was to find out how to reach it, here we can propose that it’s at least important to eliminate our assumptions and dig deeper in our interpretations, find the narratives, structure them, and align around them as a family. Understanding multifaceted family legacies and acknowledging the underlying stories, narratives behind them are all crucial for families to strike a chord with each other.
Gadamer’s route commences with understanding (subtilitas intelligendi), this prompts interpretation (subtilitas explicandi) which leads to applicability (subtilitas applicandi). What we understand and interpret, we can also apply. The stress is on interpretation. This step is easily forgotten, especially, when creating shortcuts and trying to reach effortless conclusions.
Temporality serves as another important element when dealing with interpretation evaluation times. When an interpretive process happens under a time constraint, both interpretability and explainability receive added pressure points, especially, if we are facing and have to navigate competitive narratives. Although our interpretations always remain partial and perspectival[4], being well-versed in interpretation and re-interpretation processes may lead families to subtle conclusions that they can accept and agree on.
Staying with temporality, time can also be considered as the fourth dimension for family businesses when comparing them with corporate firms due to their long-term view and complex family dynamics. Whereas corporates need to create their compelling stories and narratives, families have long-standing historic perspectives, their challenge lies in which stories to select out of the hundreds of thousands, and how to leverage them. However, many family-owned firms do not adequately articulate their core values into a workable orientation for the business.[5] Capturing what these stories are and closely follow how their interpretation changes are vital. Naturally, the act of storytelling, the content of narratives and their interpretations change over time.[6] When families decide on the narrative that best captures their family legacy, fine-tunes it, formalises it and lets it permeate everything they do, the benefits are overwhelming: from increased productivity and loyalty to a more sustainable and harmonious business through the generations.[7]
Quantifying Narratives and Interpretations?
It’s important to note, though, that it’s difficult to quantify narratives and their interpretations. Although there is a certain quantitative and qualitative potential to different meanings and interpretations, how a narrative makes an impact and what is the extent of that impact, it’s incredibly hard to measure and establish its various directions and any reputational or other ripple effects.
However, interpretation helps with both how to grasp what’s behind quantifications and also their qualitative explanation. With increased details, we are more able to measure the constellation of narratives and re-interpret them. Narratives that dominate families’ thinking have the human, social, emotional, intellectual, cultural, and family capital elements that are difficult to assess quantitatively. Families like to illustrate their thinking by sharing stories and highlighting how their stories are evolving. Empirical understanding is key, attempting to understand and interpret, assessing potential consequences, action and non-action behind them, observing how the family members react to the narratives as they all form part of the story is a vital and rewarding process.
The interpretive revision of traditions is accomplished through the application of the techniques of rhetorical history that focus on the subjective-interpretive processes by which traditions are passed from generation to generation.[8]
Narratives, legacies, and their interpretations are fragile, so are the emotional threads that hold families together.
Second part by Dominik von Eynern:
We cannot quantify narratives, but we can investigate how they impact our behavioural choices i.e., the mental model of the world through which we perceive the world and respond to it. In our lives, we are creating our subjective reality as a social construct. These realities are fuzzy with complex properties and they are in perpetual dialogue with the environment. For the creation and navigation of our realities, we use narratives. Our neurology is shaped by narratives and social processes along the consciousness continuum.
In particular unconscious narratives control our cognitions and emotions, so it makes sense introduce some neuroscientific insights to think about how narratives work to shed light into the importance of narrative gestalts and the need to re-gestalt them.
Enactive cognitive science understands cognitions as a temporal phenomenon as a response to perturbations of the (self-organized and self-regulated) human system and looks at the relation between cognitive processes and the world[9], including narratives, that are a social phenomenon that evidently occurs in the world. Narratives emerged from the brains evolution to serve the purposes of increasing complexity, coordination, and connectivity between human beings. Narratives are both an effect of the brains’ complexity, and also a triggering factor of complex brain activity[10]. They function as a bridge between painful emotional experiences and the inevitable efforts to explain them a give them meaning[11].
Narratives (including self-narratives) impact the neural and bodily organisation, characterized by different patterns of synchronized neural and chemical activity. Self-concepts lead to emerging states derived from self-organising processes that shape the neurology of our bodies and brains respectively their multi-layered, co-evolution networks. This so-called mapping takes place within all our sensory perception, bodily structures and mental functions on a continuum of consciousness. The unconsciousness is pivotal and more important than consciousness. Science attempted to gauge the weight of the unconsciousness: seemingly volitional behaviours are not volitional at all but driven and executed bypassing conscious awareness in 95% to 99%[12].
The unconsciousness is an instrumental system that actively relates to the world and learns through perceptions, priming and actions for future reference with the intention to be used for future adaption in the service of the maintenance of emotional and physical well-being, regardless of the truthfulness of the content. The emotional value of an experience is what ultimately determines how we react to it, internally and interpersonally.
The conscious interpretation of an experience leads to different narrative segments. Parts of the narrative that are unacceptable to the conscious mind or intolerable effects that are inconsistent with our self-concept are rejected and ‘stored’ unmitigatedly in the realm of the unconsciousness. Nevertheless, the unconsciousness is instrumental in driving our behaviour, by predicting our futures and anticipation of reward and punishment in the light of current stimuli. Thus, it provokes defence reactions like avoidance, fear and anxiety reactions in response to stimuli that are automatically interpreted as threatening narrative. The unconsciousness also impacts the organisation of our memories: repression and dissociated self-states control how stimuli are interpreted, remembered and forgotten or stay hidden under the surface. Even un-reflected memories that are too robust can be maladaptive and prevent new responses to a changing environment.
The narrative imprinted unconscious holds attractors that are reward-based. The incentive to act towards the attractor is familiarity and an innate desire for security. It happens out of awareness and through learned emotional and interpersonal habits re-engaging in old and familiar intersubjective interactions. The enactment of the unconscious map is compulsive, triggered by an unconsciously perceived and interpreted stimulus. The reward is the feeling of emotional security and the associated emotional and physical well-being. This may well be a false sense of security — the ‘illusion of safety’ the derives from the ‘land of familiar’ as the outcomes of such a process may inhibit evolution as an impartial observer would assess. But without bringing this habit loop to conscious awareness, the pattern will repeat perpetually.
On a similar note, when we deal with perceived, elevated stress levels, we tend to pursue default strategies. Acting in our narrative induced comfort zone reduces cognitive dissonance, and we hold the unconscious belief perpetuated by self-narrative, that the ‘proven’ behaviours will work again. The outcome may prove that belief wrong, which -when unmitigated- exacerbates the problem. Again, we will attempt to find a narrative that reduces cognitive dissonance.
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Thus, the network of external and internal narratives is driving our decision making and behaviour along the consciousness continuum.
Perceptions in themselves cannot be differentiated from action tendencies of the brain has led to a perspective describing the unconscious as a function of our brain that is continuously involved in perceiving, interpreting, and acting on the world[13]. So, the ever-active unconscious patterns are always humming in the background and as described above, can pursue goals with apparent motivation and determination, but without a conscious will or plan[14]. Unconscious neural patterns mediate conscious processes with motivational intentions that are not readily accessible for the conscious mind. Most of our perceptions, interpretation of stimuli, cognitions, actions and behaviours are outside conscious awareness but with intention and focus, can be mediated through conscious processes.
Although the unconsciousness is firmly in the driving seat, it has a bidirectional, reciprocal relationship with the conscious awareness and both systems are closely intertwined with a delay of ca. 500ms. This is evidenced behaviourally and neuroscientifically: decisions are made unconsciously, and we only become aware of our decisions after the fact, only to engage in post rationalisations for the justification of the decisions we made.
This neurological fact is also present in interpretations. They arise as prejudice or pre-comprehension anchored in the historicity that refers to a tradition in society[15], i.e., the immediate respective wider social environment, that provides socio-cultural norms and frames that drive interpretations on the continuum of consciousness.
The general question is, what does it take to make unconscious processes reach conscious awareness?
We are surrounded by a plethora of stimuli that hit our five senses, in particular, visual and auditory stimuli (language) alongside kinaesthetic, olfactory and gustatory stimuli.
The brain receives electrical signals from ears and eyes that it needs to interpret to decide what stimuli are given attention to in a given context and what stimuli are to be ignored as irrelevant. From a bottom-up perspective, the strength respectively the frequency of a stimulus pivots the signal when it reaches a certain threshold to be further propagated into higher brain regions and thus, into conscious awareness.
Top-down stimuli are driven by unconscious and conscious maps that generate intentions and are used for pattern perception and pattern completion, combined with motivational reasoning. Systemically, top-down bottom-up stimuli can spatiotemporally co-exist, which makes the interpretation and propagation of stimuli to conscious awareness even more complex.
Narratives play a key role in stimuli propagation. Language is the connotative carrier of inchoate emotions and bodily sensations, so words inevitably shape and form the meanings and perception of our internal and external words on all levels of consciousness[16].
Thus, narratives are essential in pattern formation, recognition and completion and are thus central for interpretation, depending on how narratives are interpreted historically. The interpretations, especially in the light of a high degree of self-relevance and emotional values alter the signal strength. Once the awareness threshold is reached, the neural signals are propagated to conscious awareness levels where conscious meaning is created in an iterative and recursive process, feeding back to the subconsciousness, changing the unconscious maps.
The meaning that emerges through conscious processes is contextual and emerges from the horizons (mental model of the world creating motivational meaning) of the interpreter, a horizon that in turn is historical and represents interactions in the language that returns to the pre-understanding (hermeneutic cycle)[17]. In essence, it refers to the recursive relationship of interpretation of a text or picture, which changes the mental model of the world which creates the requirement of reinterpretation. This feedback loop can become reinforcing, highlighting some aspects of interpretation and meaning, while other aspects are not reinforced — pushed into the realm of the unconsciousness. As discussed above, consciousness is not a prerequisite for narratives to be effective. But, when we want the narratives to work for us in a useful way, it is inevitable that we gain conscious awareness of the narratives and their meanings they have for us as they are pivotal for our perceptions and actions.
In a family context it is about becoming consciously aware of all individual- and group narratives, bring them into consciousness by creating system awareness and understanding in order to co-create a mutually shared narrative, a Gesamtkunstwerk with shared meaning. Neural patterns in individuals self-organise and emerge in conjunction with the social environment through neural coupling. Social systems emerge from self-organizing, neural coupling following social attractors. The Gesamtkunstwerk of a family can represent a social attractor, towards neural and subsequently behavioural patterns of activity gravitate to. The social system will handle endogenous and exogenous perturbations better with a strong attractor, i.e., an attractor that is system relevant across all dimensions of time. Only then can the attractor foster the systems’ adaption capacity and keep it synchronised, which is central for system resilience.
But without the important work of dynamic narrative creation and interpretation processes away from a purely epistemological approach, which is driven by cultural norms to more phenomenological appreciation, this will be ineffective. Phenomenology allows for more freedom degrees, it essential for diversity respectively variability, which is critical for evolution, adaption capacity and system resilience.
Let’s look at a visual narrative — the picture my family has painted in a self-organising process. The picture wants to tell me a narrative in a language that I may or may not understand. First, I analyse the syntax of the picture as objects that are laterally, vertically and diagonally interconnected. A semantic analysis requires a narrative that I can understand and relate to. This creates system awareness, provides me with spatiotemporal orientation and gives meaning to the objects and interconnections such that I can grasp the patterns of relationships by suspending subjective temporality and by projective identification with protagonists.
In this process, I learn the language of the Gesamtkunstwerk and when we do learn together as a group (social system), we create a shared, conscious meaning of the Gesamtkunstwerk. It becomes a representation of a shared symbol that unfolds gravitational forces through shared meaning — it becomes a social attractor for a social system, a strong emotional and subconscious power that holds people to a dominant belief system they share. It subtly irrigates and controls conscious thought.
The attractor has changed our perspective by modifying and updating our mental model of the world, i.e., the way we perceive the world and how we respond to it.
But social attractors exhibit metastability in their relevance, so we need to revisit the Gesamtkunstwerk from time to time, simply because other stimuli in daily life manipulate our maps and mental model of the world. Thus, when we look at the Gesamtkunstwerk after a year, we will perceive it with our updated maps and mental model of the world, so we need to realign language and meaning through re-interpretation, which in turn, will alter our mental model of the world.
Stability requires variability. If we want the Gesamtkunstwerk to be a strong, stable attractor, we need to introduce this variability and engage in a recursive process of interpretations and re-interpretations.
The absence of variation creates rigidity and hence, instability. If we fail to reinterpret the Gesamtkunstwerk it becomes a rigid attractor unfolding fundamental effects, as the above-termed familyisms. We tend to interpret actions and consequences of our actions through the same mental model that enacted them, i.e., without reflection, the actors will tend to project the historical moments’ perception onto the emerging situation and risk to misinterpret it. But without a shared appreciation of change, the response to any perturbation and their consequences will lead to fragmentation and reduce adaption capacity. The absence of learning and organismic evolution and the emerging rigidity in the worldview precludes the possibility of understanding and reflection as well as any corrective judgement or long-term perspective[18].
This corresponds to the innovation paradox in family businesses: typically, they feature a superior ability to innovate in combination with the inability to change, which is inevitable for innovation of any sort. After all, the most expensive words in business history are ‘we have always done it this way!’, which is an example of group habits — characterized by a rigid attractor that is no longer useful but are almost compulsory and unwittingly followed, regardless of the changing environment. A real roadblock to innovation and evolution! We need to accept that change, and consequently, the need for repatterning is the norm rather than the exception, so all interpretations are transient.
Thus, re-perception and reinterpretation are essential to navigate change and for combinatorial evolution. Hence, the Gesamtkunstwerk must be a dynamic representation of a symbol to make a strong attractor — only then it empowers the family and creates adaption capacity, to move forward in a synchronised manner regardless of perturbations.
Therefore, introducing variability in the form of frequent interpretation and reinterpretation of narratives on all levels of consciousness with the ability to change them keeps things stable.
About the Authors:
Dominik v. Eynern is a Principal of a family business that is now in the fifth generation and a Founding Member of Family Hippocampus. He researches family dynamics in business families and applies insights from complexity theory, cognitive neuroscience, and behavioural economics.
Zita Nikoletta Verbényi is the Founder & Legacy Aesthete at The Legacy Atelier™ and a PhD Candidate in Family Legacies, she covers critical legacy complexity layers, family dynamics, narratives, perceptions, expectations, and collective family intelligence via the power of Hermeneutics, other fields of Aesthetics, Philosophy, and Cultural Anthropology.
[1] Alfredo De Massis (a,b,c) and Emanuela Rondi (a) Covid-19 and the Future of Family Business Research. A Free University of Bozen-Bolzano; b Lancaster University; c Zhejiang University Journal of Management Studies 57:8 (December 2020)
[2] Iain Thomson, “Heidegger’s Aesthetics”, The Stanford Encyclopaedia of Philosophy (Fall 2019 Edition)
[3] Hans-Georg Gadamer, Truth and Method, pp 340 (2004)
[4] Hans Robert Jauss, Towards an Aesthetic of Reception, pp 92, Theory and History of Literature; vol 2. (2005) Also, pp 49: The interpretative reception of a text always presupposes the context of the experience of aesthetic perception: the question of the subjectivity of the interpretation and of the taste of different readers or levels of readers can be asked meaningfully only when one has first clarified which trans subjective horizon of understanding conditions the influence of the text.
[5] Dumas, C., Blodgett, M. Articulating Values to Inform Decision Making: Lessons from Family Firms Around the World. International Journal of Value-Based Management 12, pp 209–221 (1999).
[6] Francesco Barbera, Isabell Stamm, and Rocki-Lee DeWitt The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship. Family Business Review pp 1–27 (2018)
[7] Aquesha Daniels, Esq. Beyond Succession: Family Firms Need a Legacy Plan Too (Western Kentucky University 2020)
[8] Roy Suddaby1,2 and Peter Jaskiewicz3 Managing Traditions: A Critical Capability for Family Business Success, Family Business Review 2020, Vol. 33(3) 234–243 (2020)
[9] Enaction and Neurophenomenology in Language, Roberto Aritegui in Neuroscience and Social Science, Springer
[10] Psychotherapy and Social Neuroscience: Forging Links Together, Andres Roussos et. al, in Neuroscience and Social Science, Springer
[11] The Neuropsychology of the Unconscious, Efrat Ginot, Norton
[12] McGilchrist in ‘Therapy in the Age of Neuroscience’ by Peter Afford, Routledge
[13] The Neuropsychology of the Unconscious, Efrat Ginot, Norton
[14] The Neuropsychology of the Unconscious, Efrat Ginot, Norton
[15] Enaction and Neurophenomenology in Language, Roberto Aritegui in Neuroscience and Social Science Springer
[16] The Neuropsychology of the Unconscious, Efrat Ginot, Norton
[17] Enaction and Neurophenomenology in Language, Roberto Aritegui in Neuroscience and Social Science Springer
[18] Systems Thinking for a Turbulent World, Anthony Hodgson, Routledge
