There are a million definitions for succession and it is often assumed that succession only focuses on continuing a business. I disagree.
Succession involves the founder and their family, the enterprise and its executives, employees and end users – anyone who is a stakeholder in the business. It’s an important subject now, as we face the largest transition of wealth and ownership ever seen as baby boomers look to transfer their ownership whilst maintaining their legacies.
In the context of a family enterprise, succession can be incredibly complex, and more so the further down the generations you go.
Statistically, families struggle to maintain a successful enterprise after the third generation as fewer than one in 10 family businesses stay together beyond the third generation1. This trend exists in all cultures, with equivalent sayings across the world – ‘shirt sleeves to shirt sleeves’, ‘rice paddy to rice paddy’ and ‘clogs to clogs’.
It’s worrying to think that the wealth your family has gained in one generation may be lost by the third.