According
to the Family Business Institute, only 30% of family businesses last into the
second generation, 12% remain viable into the third, and 3% operate into the
fourth generation or beyond. Those that do continue often see their value
decline significantly as a result of mismanaged succession. The authors, all
associates of the global executive search firm Egon Zehnder, partnered with
Family Business Network International to analyze 50 leading family firms.
Through interviews with both family and nonfamily executives, they discovered
that the most successful of these companies do four things well: (1) They
establish good governance practices that separate the family and the business
and ensure oversight from a professional board. (2) They are careful not to
lose what makes them special—a quality the authors call “family gravity.” (3)
They assess future leaders on alignment with company values as well as on
competencies. (4) They follow a disciplined selection process when considering
candidates for the top post, and take care to provide meaningful support during
the integration process. [ABSTRACT FROM AUTHOR]