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When was the last time you took stock of what your business has accomplished and what its legacy will be after you’re gone?
Understandably, most of us are caught up in the day-to-day demands and challenges of running our company or organization while trying to manage our personal lives. Few of us ever take the time to consider what we are working towards in the long term. Where will your business be in 10 years? In 20 years? And what if, through some unforeseen tragedy, you died today and your enterprise was forced to close – what would your obituary say, and what would be written about your business?
The “obituary test” or “eulogy test” is an exercise often used by individuals to assess their personal lives. It helps ensure they’re living in a way they’ll 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 or not you and the organization you’ve invested so much time, effort and energy into are aligned with your personal values in a way that will endure after you’re gone. Clearly, there are many business metrics for determining the material value of what you’ve built: stock price, dividends paid out and market cap, among dozens of others.
Related: 5 Factors for Planning Your Entrepreneurial Legacy
But what if you had to answer the following questions: What is your business’ legacy? What will people say about you and your business after you’re gone? Are you happy with what they will say? There are plenty of examples of companies that have left behind terrible legacies. Think of the energy company Enron, which defrauded investors, price-gouged customers and evaporated its employees’ pensions due to 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 swiftly erased in a few weeks during the early days of the 2008 financial crisis. Initially, Lehman’s heavy investment in subprime mortgages helped them record astronomical profits, but when the market crashed, Lehman’s downfall was rapid and brutal. Lehman’s demise led to the biggest bankruptcy filing in U.S. history — $619 billion, with investors and U.S. taxpayers left holding the bill.
Legacy is not just about how you hope you and your business will be viewed 20 or 30 years from now. It’s about creating a business culture now in which every decision, big or small, is aligned with the ultimate legacy you hope to leave. It’s about living your legacy today and every day.
For years, the corporate model was based on maximizing profits at all costs while doing damage/reputation control through charitable donations. That’s exactly how companies like Purdue Pharmaceuticals operated. They made billions by misrepresenting the data on their highly addictive drug, OxyContin, which greatly contributed to the opioid crisis that continues to haunt America today. 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 tatters, most charities and institutions refuse to deal with the Sacklers or their trust.
What these examples illustrate is that both your personal and business legacy are determined by your actions throughout the history of their existence. It’s not just the end output of profits for shareholders or a big donation to a charity after years of unscrupulous business conduct.
Consumers want companies that are committed to more than just the bottom line of profit. They want authentic companies that walk the talk. That’s why companies like Costco are both profitable and trusted. The Reputation Management Company says that Costco has “a legacy of excellence and member satisfaction,” which is one of the reasons they are the second “most trusted company in America” (behind only Patagonia), according to a 2023 Axios survey.
They offer low prices, quality products, treat their employees well and support their local communities through charitable donations, partnerships and they pay employees to “volunteer” in the community. They walk the talk and are living their brand’s legacy from CEO to frontline employee.
Related: Leaving A Legacy: Your Business’ Success Requires A Sustainable-First Approach
So, what does the obituary test tell you about you and your company? Is your company or organization creating a legacy you can be proud of 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 also creating a legacy statement that articulates the impact you want your business to have in the long term – whether in your community, country or the world.
It should reflect the values you want your company to uphold and the kind of legacy you want it to leave behind. Work with your team to develop the legacy statement and incorporate it into your strategic and long-term planning to ensure your company is working towards it daily.
Carry out a legacy audit: Just as you might conduct a financial audit to assess your company’s fiscal health, a legacy audit can help evaluate the level of alignment between your operations and your values. The legacy audit should cover a thorough review of your company’s values, practices, products and culture. Identify areas where you’re on track and where you’re falling short 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 your legacy statement, 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 key decisions. For example, “Does this decision align with our company values?” or “How will this decision impact our long-term legacy?” This approach ensures that your legacy remains front and center in your day-to-day operations.
We all want to be proud of the legacy that we leave behind. If you don’t like what you see, get to work on creating the legacy you want.