Generational transitions can be bumpy for family firms. They can also be an opportunity to grow
When it comes to succession, timing is everything. And here, it pays to plan. If everyone knows a decade in advance who will take the helm, the entire organization can prepare accordingly.
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How does a family business survive for generations? And as the economy continues to change, what can it do to stay competitive?
“For any business leader who has a family or might work with one, these are important questions,” says Matt Allen, a clinical professor at Kellogg and Executive Director of the John L. Ward Center for Family Enterprises.
By some estimates, ninety percent of businesses are family-owned. And while few are as consistently Shakespearean as the fictional Roy family of HBO’s Succession, many have to navigate complex family dynamics in the immediate term to set themselves up for success in the distant future.
“Family businesses need to focus on long-term resilience, which means preparing the next generation,” says Allen. “That’s a different time horizon than quarterly earnings.”
Allen offers four tips on how family enterprises can build and preserve multigenerational resilience.
[This article has been republished, with permission, from Kellogg Insight, the faculty research & ideas magazine of Kellogg School of Management at Northwestern University]