Bridging the Family Business Generation Gap Has Never Been Harder


The transition from one generation to the next can make or break a family business; and as the 'baby boomers' hand over to the 'millennials', the risks of getting it wrong have never been greater.

The results of new research by PwC, talking to more than 200 family members likely to take over family businesses in 21 countries worldwide, looks specifically at the issue of succession and how family firms prepare for these changes.

The report identifies three areas where a mis-match of styles, ambitions and plans could cause difficulties for UK family businesses which account for over 9 million jobs, around UK £80bn in annual tax receipts and nearly a quarter of
total GDP.

The generation gap

Henrik Steinbrecher, PwC global middle market leader, says: “The world has changed out of all recognition since the current generation took over, and the pace of change can only accelerate in response to global megatrends like demographic shifts, urbanisation, climate change and new technology.

“The handover for 'first generation' businesses – those making the transition from start-up venture to family firm - is commonly the most fraught. Of those taking over under these circumstances; 20% say they're not looking forward to running the business, compared to 8% for respondents as a whole.”

The credibility gap

Bearing the family name can work against the next generation. 88% say they have to work harder than others in the firm to 'prove themselves'. 59% consider gaining the respect of their co-workers is the single biggest challenge they face.

Promotion to CEO is no longer automatic for the next generation, with a growing number of family businesses being prepared to make tough succession decisions. The survey revealed that 73% said they were looking forward to running the business one day, but only 35% thought that was definite, and as many as 29% thought it at best only fairly likely.

The communications gap

There's a tendency for some in the older generation to overestimate how well they have run the business, while underestimating their children's capacity to do this as competently as they did.

Sian Steele, PwC partner and family business specialist in the UK, says:

“Members of the current generation often comment that their children aren't sufficiently entrepreneurial and aren't prepared to put in the long hours they did to build the business while, down the hall, their children are wishing their parents would embrace new technology and new ideas.

“This sort of impasse can slow down decision-making and lead to the phenomenon of the 'sticky baton', where the older generation hands over management of the firm in theory but in practice retains control over everything that matters.”

The survey reveals that as many as 64% think the current generation will find it tough to let go.

Steinbrecher concludes: “Firms that manage succession well are those that plan many years ahead - ideally, five to seven years in advance - accompanied by 'sensible conversations' that address roles, responsibilities, and timings.”

Download the full report at 


Share this page:

In this section

Service Delivery Trumps Offerings says Study

How firms deliver service is the greatest differentiator between the state of the art and the state of the industry in family wealth management, according to a new report from the Family Office Exchange.


Bridging the Family Business Generation Gap

The transition from one generation to the next can make or break a family business; and as the 'baby boomers' hand over to the 'millennials', the risks of getting it wrong have never been greater.


Strategic Governance for Family Offices: Why Do It and How to Approach It

Amelia Renkert-Thomas, Co-founder of family business consultancy Withers Consulting Group, outlines the need for governance and the different approaches family offices can take to it, in partnership with the Family Office Association.


10 Relationship Challenges in Family Businesses and Legacy Families

At Aspen Consulting Team (ACT), we work with family businesses and legacy families as they walk the balance beam between love and money, socio-emotional wealth. Using a metaphor from the golf course—we go into the deep weeds and thicket of family dynamics and get the ball out to the short grass—so family members and their financial and legal advisors can move it forward. We work with family businesses and legacy families at the top 1% financial level.


Man About Town

Founded by Andrew Heiberger in 2010, Town Residential has cemented its position as New York’s foremost luxury real estate services firm with an exhilarating foundation and seamless execution of best-in-class customer service by an unparalleled team of more than 500 Representatives and professionals strategically located in ten prime Manhattan, Brooklyn and Queens locations.


News Stand

View more → Sign up to receive new issues →