What are the Four Kinds of Legacy?

Your legacy is the accumulated resources of your lifetime, which you pass on to the next generation. Which of the four kinds of legacies best fits you?

1) Financial legacy

You are a successful businessman. Whether you started out with inherited money, borrowed venture capital or simply a shoe string, you have managed to leverage that capital into something of greater worth.

Regardless of whether you have a significant amount of liquidity, or all your net worth is tied up in a business, the fact remains that you are already positioned to leave financial capital to the next generation.

This is the most common form of legacy, yet most American men only manage to accumulate a tiny amount of financial capital for their heirs. You are to be commended for your financial acumen. As an entrepreneur, you are already well ahead of the curve.

2) Intellectual legacy

Only another businessman knows how much you have had to learn to run a business. Regardless of whether you manufacture widgets, offer a service, or have a full retail operation, you have had to learn myriad details in many different disciplines, just to run a business. This is one kind of intellectual capital. Your customers and your friends probably take it for granted because you make running a business look so easy, but you know and I know that you have paid a high price for the business moxie you have now.

Presumably you have been grooming a successor and have been passing on to him or her the things you have learned over the years. They are already receiving part of your intellectual legacy.

Beyond the knowledge needed to run a business, you probably have some specific trade secrets that constitute a more valuable kind of intellectual capital. How do you weight the relative value of your discoveries or inventions?

One way is to see how durable your idea is in a changing culture.

Bill Lear from the Lear Jet Corporation developed the eight track tape. It was hugely popular for 20 years, but is now relegated to museums of obsolete technology. By contrast, the business jet concept that he developed has remained an integral and growing part of the American business culture. While the jets have changed, the concept of the business jet remains.

One part of his intellectual capital had little durability. The other idea has spawned a whole new industry, not just a new product and a new company.

Another metric for the value of intellectual capital is to see how extendible the idea is. Take the ATM. There has been near universal acceptance of the equipment by banks and financial institutions, but it has not spun off very many other applications.

Now contrast that with the bar code. One of the first successful bar codes was developed by Dr. David Allais. His intellectual capital has spawned several other kinds of bar codes and literally dozens of applications. From the UPC at the store, to tracking your suitcases at the airport, to tracking boxes shipped by all the major carriers, Dr. Allais’ intellectual capital has been massively extended.

A third metric would be the number of lives that have been enriched by the intellectual capital. Andrew Carnegie converted part of his massive financial capital into intellectual capital through the libraries. He established over 3,000 libraries in his life time, many of which were in frontier communities which otherwise would have had limited access to good literature.

Each of his libraries touched the lives of thousands who came to the libraries, as well as those who were benefited by the ones who learned there. Thus his investment in broadening the world view of an entire generation makes him a legend among those leaving a legacy of intellectual capital.

3) Generational legacy

Admiral Hyman Rickover is known as the “Father of the Nuclear Navy.” He certainly was formidable in his technical knowledge, but his real legacy was the men whom he selected and oversaw during his 63 years of active duty. He was legendary for his capacity to read potential in people, and almost ruthless in his intense determination to bring each man under his command to the highest level of competence possible.

Although he is dead, the values and skills he built into thousands of men under his command will continue to affect the Navy for another generation. The extraordinary officer corp he developed was a generational legacy which exceeded the intellectual legacy of his scientific accomplishments. The world is a better place for his having lived and led.

In the marketplace, Jack Welch did the same. He made a major impact at General Electric when he was CEO. Far more significantly, he passed on his leadership style and values to hundreds of men and women in his company and in his classes, as well as thousands more (like me) who were shaped by his books. Today over half the Fortune 500 companies have someone in high leadership who has been shaped by Welch’s ideas.

His views, incarnated in an entire generation of leaders is a huge generational legacy for our culture.

4) Social legacy

This is admittedly the most challenging of the four legacies, and is attained by only a few. A social entrepreneur is someone who changes for the better the way an entire sector of society functions.

Florence Nightingale won fame for transforming nursing. It was a fairly crude, dishonored, random profession prior to the investment of her intense life. Today, generations later, even though the practice of modern medicine is radically different than it was in the 1800s, many of her foundational principles still govern this sector of society.

The two great emancipators, Abraham Lincoln and William Wilberforce were also social entrepreneurs, making some of the greatest changes in a culture in modern times.

Leaving a social legacy through the marketplace usually happens through creation of a breakthrough product. The Wright Brothers and Henry Ford fundamentally altered the way our society functions.

More valuable than a breakthrough product however, is a concept or process that dramatically reshapes a sector of society. While many great ideas get expressed in a prototype, few gain traction in the wider market to the degree that any sector of society is changed on a wholesale basis.

Warren Buffet is in that place right now. He is a stakeholder in Coca Cola and has a seat on the board. He has persuaded this global icon to fundamentally alter the way they do business by discarding the quarterly forecast.

Traditionally a publicly held corporation will announce at the beginning of each fiscal quarter what their expected sales/growth/revenue will be for the next quarter. There are times that this figure is based on sound economics and solid management, but as often as not the announced number is as imaginary as the forecast from a crystal ball. Based on optimistic projections rooted in dreams and wishes, the price of their stock goes up.

Near the end of the quarter, the press is informed that the company will not quite reach the projections and the short term investors respond by dumping some stock and causing the price to drop.

Buffet has little use for short term investors in general. His investment philosophy is that you should buy and hold stock in well managed companies, looking for gain over decades not a quarter. He also feels that making corporate decisions based on what will make the bottom line look good in 90 days is an absurd way to run a business. Many times in order to position yourself well for the future, you will need to show poor numbers for a short time as you front load a project or process.

I totally agree with that part of Buffet’s philosophy and am delighted to see him able to implement it at a mega-corporation. So far, he only has a prototype. Obviously the investors have not fled the company just because the company is no longer engaging in the forecasting sham. It remains to be seen whether Coca Cola can leverage that freedom into being more profitable over the course of a decade, now that all decisions can be made for the long term.

A prototype however, is not a legacy. IF his idea were to be embraced by the American corporate world, then Warren Buffet would have achieved the heady title of a social entrepreneur leaving a legacy of significant positive change in the corporate world.

Check back in 20 years for the verdict!

So what about you?

You are probably not sitting on the board of Coca Cola. You may not be able to make as big a splash as Henry Ford, Admiral Rickover or Warren Buffet. Nonetheless, you will leave a legacy of some kind. What legacy is right for you?

The answer begins with your identity. God designed you as a unique individual. We do not just arbitrarily select a goal in life in order to make a name for ourselves. I lack athletic talent. Therefore the goal of being a world class athlete is unrealistic. That goal would flow from my ego, not my design and identity.

So our first step in determining what kind of legacy you can leave is for us to study your own personal social DNA. When we identify that, it will significantly limit your options. On the other hand, it will also show us where your “free money” is. Each individual was designed by God with some spiritual and social assets that are yours to tap into, in order to leave your legacy.

Our second step is to look at the world around you. Think of your life as a Scrabble game. You have the letters on your rack (your identity) and you have the condition of the board at any given moment (your world). After you have formed a desired word, you still need to find a place to play it.

That is where Sapphire Leadership Concepts comes in. We bring an unusual perspective to the table, enabling you to see resources you did not know where there and find opportunities most would overlook. Think of us as someone looking over your shoulder in the Scrabble game, rearranging the letter you already have in order to make the 55 point word, instead of merely settling for a respectable 26 point work.

If you can be satisfied with lots of money, don’t call us.

If you know that you know that you were created for bigger things, but you have never quite been able to put language to that yearning inside you, we need to talk.

Our greatest strength is giving people language for what they already know.

Our second core competence is being able to design a unique pathway to help you get where you were made to be in this generation, so that you can leave a legacy for the next generation.

It’s your move.

 

Back