The process of shifting from family to professional leadership, sometimes back again, is probably one of the biggest challenges that family firms have today
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The idea of a family firm often suggests iconic brands, like Hermès. Yet most don’t stand the test of time. In fact, family firms fail at an alarming rate: Around 70 percent go bust even before the second generation takes the helm. They flounder for many reasons, but it often starts with a lack of professionalisation, which includes defining corporate governance and perhaps welcoming external executives in to manage the firm.
What is a family firm to do? INSEAD Professor of Economics and Academic Director of the Wendel International Centre for Family Enterprise Morten Bennedsen had some suggestions for family leadership in a recent INSEAD Knowledge podcast.
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