Preparing or procrastinating?
How the world’s largest family businesses undertake successful successions.
Succession is a hot topic for family business leaders. Around the time of leadership succession, emotions often flare, relationships in family and work undergo stressful changes, and the success – or failure – of an effective transition can impact the family and the business for years.
With this report, we consider what some of the largest, longest-lasting family businesses in the world do to produce successful successions generation after generation.
Analyzing our data from this global survey*, we found that they lay the groundwork for new leadership long before succession occurs by:
- Clearly defining who is responsible for succession
- Focusing on next-generation preparation – but not necessarily on outside work experience
- Nurturing an entrepreneurial culture
- Working to attract top talent
As we explore their long-term preparations, we will illuminate the factors that help these family firms manage more effective successions while minimizing turmoil and disruption.
Are you succession savvy?
Succession planning is not an easy, straightforward process. As we discuss here, it’s vital to prepare the best possible environment for succession to succeed. But even as that groundwork is being laid, every important stakeholder – the owners, the family members, the business leaders – should begin thinking about their expectations for the day the succession actually occurs.
Start the process by asking questions that are aligned with the four dimensions of every successful succession: leadership, ownership, legacy and values, and wealth transition.
- Leadership: Have you identified who should lead the business going forward? Are you willing to transfer control?
- Ownership: Who is going to own the business after you retire? Should the owner(s) always be involved with the company?
- Legacy and values: What are the family values? Are you confident the next generation will carry these values forward?
- Wealth transition: Are there plans on how to share wealth with the family members? How will the owner(s) remain financially secure after transferring the business?
After reflecting on these four dimensions and discussing them with all key stakeholders, you might not have a plan, but you will have the right mindset.
* This report is based on survey results gathered from 525 of the world’s largest family businesses. The responses represent 25 of the largest family businesses in each of 21 top global markets — Australia, Belgium, Brazil, Canada, China, France, Germany, the Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), India, Indonesia, Italy, Japan, Mexico, the Netherlands, Russia, South Korea, Spain, Switzerland, Turkey, the UK and the US.