We are committed to pursuing research into family-owned businesses that will inform and improve the support we provide as they navigate critical issues such as succession planning, governance, and next-generation leadership transitions.
Our second survey focuses on succession, the defining milestone of a multigenerational family business. Without a transition in leadership or ownership, there’s no next generation to plan for. In the U.S., family businesses often reach the third generation, but that doesn’t mean the handoff is easy. Even well-prepared families can find that succession is rarely smooth or free of challenges.
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.
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.
Respondents point to five recurring challenges:
A. Letting go: Many senior leaders hesitate to relinquish control, even when successors are ready.
B. Lack of communication: Unspoken expectations and family dynamics often stall progress.
C. Merit vs. tradition: Choosing successors based on capability rather than family rank creates friction but yields better outcomes.
D. Preparation gaps: Not all NextGen members feel equipped to lead when the time comes.
E. Diverging visions: Older generations tend to prioritize stability; younger ones lean into innovation and risk.
Our first survey shows more than half of families don’t know if the next generation is ready, willing, or able to take over. Families also feel that family engagement is vital for the long-term success and stability of multigenerational family businesses.
A significant challenge for family businesses is the uncertainty regarding whether the next generation will join the business. According to the survey, 57% of respondents are unsure if their next generation intends to join the family business, while only 19% confirmed that the next generation has already joined
Family councils play a crucial role in improving family engagement. The survey shows that businesses with family councils report a 10% higher engagement rate compared to those without one. However, only 47% of family businesses currently have a family council
Families with higher engagement levels report better alignment on both family and business goals. In fact, 71% of highly engaged families say they are aligned “all of the time,” compared to only 43% of less engaged families
78% of respondents require next-gen members to work outside the business first, while 50% require them to report to non-family members and 43% mandate specific educational qualifications such as certifications or an MBA
Brightstar Capital Partners and Campden Wealth issued the North America Family Business Report 2023, highlighting opportunities and challenges of family businesses. The report surveyed more than 100 family businesses with average annual revenue of close to $350 million. Among the major concerns for family businesses leaders are succession planning, risks of the current economic environment, family conflict and communication, technology investment, risk management, governance, cybersecurity, and ownership structure.
