Welcome to The Pulse of Family Business! Family Business Magazine and Brightstar Capital Partners have developed “The Pulse of Family Business”, a series of four surveys that provide brand new findings and dig deeply into the challenges and opportunities facing family businesses.
For more than 15 years, Family Business Magazine has asked the members of multi-generational family-owned businesses what key family and business issues they face, and in the several thousand responses we have received, these “Big Three” issues emerged most often:
- The need to improve family and NextGen engagement
- Succession challenges and planning
- Developing or strengthening family and business governance
How can we best engage family members in the business and protecting its legacy? How can we attract our NextGens to join the business, or at least value and include the business in their thinking as they plan for their futures? How do we plan for succession, and how do we deal with the challenges that succession planning can create? And how do we create business and family governance that helps us communicate with one another and reach critical decisions that affect the family and the business?
While there are other issues that family members face, these three recur the most, in many variations. And they each ultimately raise questions around what it means to be a good owner.
Are there tools that members of a multi-generational family business can use to put a “finger on the scale” to improve the odds of success?
Survey 2, March 2025: Succession and Succession Planning
The second report in our series focuses on the central challenge of succession planning. Drawing on survey responses from nearly 400 multigenerational family business leaders, the findings shed light on what drives successful intergenerational transitions and what derails them.
KEY FINDINGS INCLUDE:
What defines a “successful” succession?
Two-thirds of respondents described their most recent succession as “smooth” or “very successful,” yet confidence in the next transition has declined. Just 59% believe the next succession will go well. Why? Only 39% have a plan in place or in progress for their next leadership transition, compared to 73% who had one last time.
What improves the odds?
The data shows a clear correlation between having a formal, written succession plan and improved outcomes. Families with written plans rated their transitions as successful 78% of the time, compared to just 47% without one. Verbal plans help, but fall short of the benefits delivered by documented strategies.
Where do families struggle?
Respondents point to five recurring challenges:
* Letting go: Many senior leaders hesitate to relinquish control, even when successors are ready.
* Lack of communication: Unspoken expectations and family dynamics often stall progress.
* Merit vs. tradition: Choosing successors based on capability rather than family rank creates friction but yields better outcomes.
* Preparation gaps: Not all NextGen members feel equipped to lead when the time comes.
* Diverging visions: Older generations tend to prioritize stability; younger ones lean into innovation and risk.