Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
Opinions expressed by Entrepreneur contributors are their own.
When was the last time you took stock of what your company has accomplished and what its legacy will be after you leave?
Understandably, most of us are preoccupied with the day-to-day demands and challenges of running our business or organization while also trying to manage our personal lives. Few of us ever take the time to think about what we are working towards in the long term. Where will your company be in 10 years? In 20 years? And what if you died today due to an unforeseen tragedy and your business had to close – what would your obituary say and what would be written about your business?
The “obituary test” or “leulogy test” is an exercise often used by individuals to assess their personal lives. It helps ensure that they live in a way that they can be proud of when they look back on their lives.
It may seem like a morbid process, but it can be a powerful tool for determining whether you and the organization into which you have invested so much time, effort and energy are aligned with your personal values in a way that will last even after you are gone. Obviously, there are many business metrics to determine the material value of what you have built: share price, dividends paid and market capitalization, and dozens of others.
Related: 5 Factors for Planning Your Business Legacy
But what if you had to answer the following questions: What is your company's legacy? What will people say about you and your company when you're gone? Are you happy with what they are going to say? There are many examples of companies that have left terrible legacies. Consider the energy company Enron, which defrauded investors, overcharged customers, and destroyed employee pensions through its corporate greed and illegal accounting practices.
Or consider Lehman Brothers, the investment bank that was revered for over a century before its reputation was quickly erased in a matter of weeks in the early days of the 2008 financial crisis. Initially, Lehman's heavy investments in subprime mortgages helped it generate astronomical profits, but when the market collapsed, Lehman experienced a rapid and brutal decline. The collapse of Lehman led to the largest bankruptcy filing in U.S. history – $619 billion, leaving investors and U.S. taxpayers with the bill.
Legacy isn’t just about what you want yourself and your business to be like in 20 or 30 years. It's about creating a company culture now where every decision, big or small, is aligned with the ultimate legacy you want to leave behind. It's about living your legacy today and every day.
For years, the company's model was based on maximizing profits at all costs while simultaneously controlling damage/reputation through charitable donations. This is exactly what companies like Purdue Pharmaceuticals have done. They made billions by misrepresenting data on their highly addictive drug OxyContin, which contributed significantly to the opioid crisis that continues to plague America to this day. At the same time, the Sackler family, which ran Purdue, donated millions to the arts, charities and universities. Today, with the family's legacy in ruins, most charities and institutions refuse to deal with the Sacklers or their trust.
These examples illustrate that both your personal and business legacy are determined by your actions throughout your existence. This is not just a final distribution of profits to shareholders or a large donation to a charity after years of unscrupulous business practices.
Consumers want companies that care about more than just profits. They want authentic companies that put their money where their mouth is. This is why companies like Costco are both profitable and trustworthy. According to a 2023 Axios survey, Costco has “a legacy of excellence and member satisfaction,” according to the Reputation Management Company, which is one of the reasons they are the second-largest “Most Trusted Company in America” (only behind Patagonia).
They offer low prices and quality products, treat their employees well, and support their local communities through charitable donations, partnerships, and they pay employees for “volunteer” work in the community. They walk the talk and live their brand’s legacy from the CEO to the frontline employee.
Related: Leaving a Legacy: The success of your business requires a sustainable approach
What does the obituary test tell you about you and your company? Is your company or organization creating a legacy that you can be proud of and that aligns with your values? If not, here are a few ideas to get you started:
Create a Legacy Statement: We all know about mission statements, but consider creating a legacy statement that expresses the impact you want your company to have long-term – be it in your community, your… country or the world.
It should reflect the values you want your company to uphold and the type of legacy you want it to leave behind. Work with your team to develop the legacy statement and integrate it into your strategic and long-term planning to ensure your company is working towards it every day.
Conduct a legacy audit: Just as you would conduct a financial audit to assess your company's financial health, a legacy audit can help assess the level of alignment between your operations and your values. The legacy audit should include a thorough review of your company's values, practices, products, and culture. Identify areas where you are on track and where you still have backlogs so you can create a plan to address the gaps.
Implement a values-based decision-making matrix: To ensure that your business decisions consistently reflect what you have said so far, consider implementing a values-based decision-making framework. This framework should include a set of guiding questions or criteria that you and your team can use to evaluate important decisions. For example, “Is this decision consistent with our company values?” or “How will this decision impact our long-term legacy?” This approach ensures that your legacy is at the heart of your daily operations.
We all want to be proud of the legacy we leave behind. If you don't like what you see, get to work creating the legacy you want.
Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
