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Four key practices for successful successions in family businesses

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Four key practices for successful successions in family businesses

Survey indicates that establishing roles early is vital.

Leadership succession can be stressful for family businesses as they work toward a successful transition. As some of the largest and most durable businesses in the global economy, the most successful family businesses manage to remain innovative, flexible, focused and growing for decades, if not centuries. Succession planning is not easy, but it's a vital part of an organization's future. For a smooth succession, leading family businesses create the best possible environment, and begin laying the groundwork for the process long before it is needed. Professional services firm EY and Kennesaw State University turned to the world's longest-lasting family businesses to uncover their approaches to succession planning.

The study revealed four key best practices used by the world's largest family businesses to promote successful successions, generation after generation. The study surveyed 525 family businesses – 25 of the largest family businesses in each of the 21 top global markets.

The majority of family businesses that do not have an appropriate succession strategy end up as part of the 97% that don't make it past the third generation.

"We believe organizations can learn a tremendous amount by understanding the way family businesses approach succession. By implementing similar strategies in their own firms early on, companies can lay the groundwork for a longer, more profitable future," said Carrie Hall, EY Americas Family Business Leader.

The four key practices are:

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