Family Businesses: 7 Rules to Follow for a Successful Generational Transition

ALMOST ONE OF FIVE FAMILY BUSINESSES WILL FACE A CHANGE OF GENERATIONS IN THE NEXT FIVE YEARS. IN RESPONSE TO THE NEEDS OF ENTREPRENEURS ASSOLOMBARDA, BOCCONI UNIVERSITY AND AIDAF PRESENT A GUIDE TO BUSINESS SUCCESSION

Distinguish the company from the family, apply a modern governance system, reward competence, establish a framework of shared rules. But also, prepare for the unexpected, favor a process-based perspective and involve third parties. These are the seven conditions for a successful generational transition, set out in the Assolombarda  guide by Guido Corbetta and Alessandro Minichilli,  professors of the AIdAF EY-Chair in Strategic Management of Family Business in memory of Alberto Falck at Bocconi University.




"Today 23% of family business leaders are over 70, and the firms guided by them show lower earnings performance than the other," explain Corbetta and Minichilli. "18% of family firms will see a generational shift in the next five years - and it is a very delicate step, since only 30% of the companies survive their founders and only 13% make it to the third generation." In Italy 65% of companies with turnover of more than EUR 20 million are family farms, according to AUB Observatory data on Italian Family Businesses.



The manual, promoted by Assolombarda, was drawn from a previous analytical work the Association conducted in collaboration with Bocconi University, with the aim of mapping the strengths and weaknesses of medium-sized enterprises. From discussions with the entrepreneurs themselves, the theme of generational change was, in fact, it identified as one of the most frequent critical issues.

by Fabio Todesco
Translated by Richard Greenslade