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

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.