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Family-controlled businesses make up 30–40% of all medium and large U.S. companies, including a third of the Fortune 500. They are essential players in nearly every industry—and for many of us, they are long-time partners, valued customers, and trusted vendors.
These businesses deserve our admiration. Built on generations of vision, values, and deep commitment, family companies are engines of resilience. But when it comes to succession, even the strongest can face moments of uncertainty.
Why Succession Is So Complex—and So Important
Unlike public companies with regular CEO turnover, family firms often have leaders who stay for decades. That continuity can be a strength—until change becomes urgent.
Succession planning in family businesses is uniquely complex. It’s not just about choosing the next CEO; it’s about navigating legacy, relationships, and responsibility. Conversations can be sensitive, timing hard to get right, and governance roles unclear.
Many wait too long to act. Others choose successors based solely on family ties, or struggle to align around who decides what. Without a clear plan, even well-run companies can face transitions that are rushed, divisive, or destabilizing. Often, there’s no updated org chart reflecting future leadership—creating confusion and hesitation at the moment it matters most.
The Good News: These Challenges Can Be Managed
More and more family businesses are turning succession into a strategic strength, with thoughtful planning, early preparation, and support from independent advisors.
What works:
- Starting early—to give internal candidates time to grow or onboard external talent gradually.
- Clarifying roles—between family owners, boards, and management.
- Aligning on values—to guide decisions with clarity.
- Communicating openly—so that trust stays strong across generations.
And just as important: having a forward-looking org chart that shows where the business is headed—not just who’s in charge today.
When done well, succession becomes more than a risk to manage—it becomes a powerful opportunity to renew leadership, culture, and long-term perform.
When Family Businesses Thrive, Economies Do Too
As business partners, we value the strength and continuity of family-owned companies. Smooth leadership transitions keep plans on track—and partnerships strong.
Thanks to Jason Hecker and Phyllis Campbell at Egon Zehnder for their insights that help family businesses thrive—today and across generations.
