Family Business Survey

Engaging the next generation for business-owning families has always been necessary; now it has the added context of increasing human longevity. Our survey aims to reveal a range of insights into the challenges faced by families in their intra-generational planning.

Many families will be familiar with the warning from history and experience: ‘clogs to clogs in three generations’. It exists in many forms, in many countries and through many ages. It should be a reminder of how few families manage the transition from generation to generation successfully. Survival statistics suggest only around 13% makes it to a third generation.*

Many family business owners remain keen or even determined to hand their businesses down to their younger family members, believing this to be the most effective way to preserve their family values. This may include retaining the vision of a more distant founder. In such a situation, all owning family members will have their shareholders’ responsibilities, and many will regard it as their duty to uphold the purpose of the company and any philanthropic or social capital role. Managing such a legacy is an evolving process, demanding of engagement and time. It also takes sensitivity and flexibility to educate the next generation with the right level of support, work experience and encouragement.

However, few believe in an automatic right of succession. The survey results make it clear that the right to succession requires both enthusiasm and merit. If there is no one within the family with the right blend of interest, skill and qualifications, the business may need to bring in external management. Some respondents do not want to place undue pressure on children to join the family business, and are more concerned with their children’s happiness and fulfilment.

 

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