How to prepare heirs for tomorrow’s family business

Future-ready leaders can be fostered through strategic development and diverse experiences.

In brief

• Effective succession planning should focus on equipping future leaders with skills for emerging challenges rather than just current operations.
• Future leaders can cultivate critical skills in strategic analysis, technological innovation and data interpretation to respond to market changes.
• Engaging heirs in diverse experiences and cross-industry exposure will broaden their perspectives and enhance their adaptability to future business dynamics.

In the world of family business consulting, much has been said about the importance of preparing heirs for future leadership and ownership. Succession planning is a well-trodden path, filled with best practices, case studies and frameworks to help older generations (especially now baby boomers) transition responsibilities to their children or other lineal descendants. But an essential question remains underexplored: Are we preparing the next generation for tomorrow’s business, or are we merely grooming them for the business as it exists today — or even yesterday?

Generational transitions often span a decade or longer. During this time, industries evolve, markets shift, and new opportunities or threats emerge. If heirs are being developed based on the realities of the current business, they are likely to be ill equipped for the dramatically different enterprise they will eventually inherit.

Pace of change: a real-world example

Consider a company I have worked with for the past eight years. When our engagement began, the business had approximately $100 million in revenue. Through a disciplined approach to organic growth and operational improvement, the company scaled to $1.1 billion in revenue. Along the way, the controlling owners and board of directors focused on helping to enhance governance, strengthen the executive team, modernize systems, and invest in the brand. The company is now a bona fide growth platform.

What’s next? Active industry consolidation. The sector is fragmented, with many company owners now aged 65 to 85. Over the next eight years, the company expects to pursue acquisitions aggressively, and it is projected the company will grow to $4.0 billion to $4.5 billion in revenue. This would mean a 45-fold increase in scale over a 15-year period.

Now consider the implications: If the family had begun preparing a lineal descendant for the $100 million version of the company eight years ago, that heir would be woefully underprepared to lead or even contribute meaningfully to the much larger, more complex organization the company is becoming.

Evolving preparation or anticipatory readiness?

Some advisors argue that next-gen preparation should evolve as the business evolves. In theory, this makes sense. In practice, it often results in next-generation family members being perpetually behind the curve. Their preparation is reactive rather than anticipatory. Instead of being taught how to navigate the landscape of tomorrow, they are given a playbook for a version of the business that is already disappearing in the rearview mirror.

Moreover, these heirs are rarely taught to understand the context in which the business is attempting to grow. Conventional growth strategy discussions tend to focus on expanding within the existing product-market space — offering current products or services to new customers, entering adjacent markets or making bolt-on acquisitions. But this framing ignores the changing terrain of the competitive landscape, particularly amid global economic and technological disruption.

Convergence of advanced technology

We are also living through a technology revolution unlike any in modern history. Ten exponential technologies are advancing and converging simultaneously:

1. Artificial intelligence (AI) and machine learning (ML) — Transforming decision-making, process automation and customer interaction
2. Quantum computing — Unlocking solutions to problems beyond the reach of classical computers
3. Blockchain — Enabling secure, decentralized transactions with broad business implications
4. Internet of Things (IoT) — Creating a fully connected physical and digital environment
5. Biotechnology and synthetic biology — Redefining health, agriculture and manufacturing
6. Nanotechnology — Enabling material innovation and microscopic precision
7. Robotics and automation — Increasing efficiency and reducing labor dependence
8. 3D printing — Revolutionizing manufacturing and supply chains
9. Augmented reality (AR)/virtual reality (VR) — Enhancing training, customer experience and product development
10. Renewable energy technologies — Driving the global shift to sustainable infrastructure

These are not distant trends. They are reshaping business models and creating existential opportunities and risks. Preparing tomorrow’s owners and leaders means exposing them to these forces and helping them think critically about how such technologies may impact their enterprise.

Role of intelligence and data awareness

In addition to understanding emerging technologies, heirs must learn to make data-informed decisions in dynamic, information-rich environments. One of the most overlooked aspects of next-generation readiness is the capacity to systematically track, interpret and act on relevant signals from within and beyond the industry.

Far too few companies — especially private, family-controlled ones — use data effectively to monitor competitor moves, such as being sold to private equity firms, making add-on acquisitions, or raising strategic capital. Fewer still track early indicators of customer behavior shifts, emerging risks, or macroeconomic dynamics such as capital market flows, interest rate shifts or geopolitical realignments. Yet all these factors materially affect the context in which strategy must be formed and executed.

In the new S-curve era, competitive advantage increasingly will be determined not just by operational excellence or brand strength, but by the speed and clarity with which a company can absorb market signals and translate them into action. Tomorrow’s leaders must become students of change — tracking sector-specific movements, understanding the capital strategies of key players, anticipating shifts in demand patterns, and aligning with broader economic megatrends and technological trajectories.

Heirs who are not trained to think in this way risk managing the business from a rearview mirror — reacting to events instead of shaping them. Developing an early habit of rigorous market scanning, competitor intelligence and economic awareness is critical for equipping next-gen leaders to make informed decisions in increasingly complex and fast-moving conditions.

Call for strategic reorientation of heirship preparation

To prepare heirs for tomorrow’s business, older leaders (e.g., baby boomers) must rethink their approach to succession planning. This involves:

• Scenario planning: Introduce next gens to plausible future business environments through structured scenario exercises.
• Cross-industry exposure: Encourage internships, advisory roles or secondments in different industries to broaden perspective.
• Strategic literacy: Train them to think systemically, anticipate disruption and analyze global trends.
• Innovation engagement: Include them in discussions about digital transformation, M&A strategy and capital allocation.
• Governance participation: Give them early exposure to board dynamics and long-range planning conversations.

This kind of preparation cannot wait until heirs are in their 30s or 40s. It must begin in young adulthood, if not earlier, and be treated as a deliberate process of leadership incubation rather than a passive rite of passage. The learning and decision-making styles of Gen Z and Generation Alpha also differ from those of the current business leaders, and these differences must be considered to effectively prepare the business for how the next generation will operate.

Conclusion

The stakes for family businesses are rising. A generation of heirs is at risk of being handed the keys to enterprises that are fundamentally different from the ones their parents built and operated. Without forward-looking preparation, these heirs may struggle to preserve, let alone grow, the legacy entrusted to them.

Family business leaders must act now to prepare their successors not for today’s business, but for the business of tomorrow — with all its complexity, volatility and possibility. That is the true mark of responsible stewardship and visionary leadership.