When it comes to succession — passing the business from one generation to the next — cultural undercurrents play a much bigger role than many people expect.
Succession may look like a simple handover of leadership, but in reality, it's often an emotional and complex transition. Generational shifts, family dynamics, and business priorities are all involved. Anna Bakiewicz (2020) explores through her research how culture shapes leadership expectations and readiness. It plays a powerful (and sometimes invisible) role in succession planning. In many families, traditional norms — like the expectation that the eldest son takes over — can outweigh practical concerns like skills or interest. But as more next-gens study and work abroad, they return with fresh perspectives. That can create tension or spark positive change.
A modern succession plan needs to account for these cultural shifts and find ways to bridge tradition and innovation. Here are a few tips on how families can approach succession with clarity, intentionality, and cultural sensitivity.
Adopt a Holistic Framework
While often treated as purely a business decision, succession should be a whole-family process. In 1990, William Handler proposed a four-level model that helps families think more broadly:
- Individual Level: Is the next-gen ready? Do they have the motivation and mindset to lead?
- Family Dynamics: What's the relationship like between generations? Are there unspoken expectations or conflicts?
- Business Strategy: How does the business's long-term plan fit with the family's values?
- Wider Context: What external factors (laws, markets, culture) might affect the transition?
Each layer influences the others, and a good plan considers all of them.
Balance Emotions with Strategy
Family businesses tend to blend personal loyalty with financial decisions. That's a strength, but it can also cause problems. Schulze et al. (2001) studied what's known as the agency dilemma in family firms: when personal priorities (like keeping all family members involved) compete with what's best for the business. For example, some families avoid defining succession plans so no one feels excluded. But this can lead to confusion, conflicts, or stagnation. Finding the balance between family unity and strategic clarity is one of the toughest challenges in succession.
Defining a shared vision and recognising its emotional value is important, but building the right governance to put it into action is also crucial. Involving external, impartial advisors to gain objective advice can help families avoid mistakes caused by being too emotionally attached to their business. You can read more on the subject in our article 'Balancing Emotion and Strategy in Family Businesses'.
Keep the Values at Heart
At their best, family businesses reflect the values of the people behind them. And when those values are clear and shared, they guide decision-making through generations. Global brands like IKEA show that values can scale. Their "Hey-Culture," grounded in Swedish egalitarianism, has shaped how they operate worldwide.
Build on your shared views and preferences to create the family and business space that brings joy to you and feels authentic to you. That vision will guide you down the line when unexpected turns happen and roles need to be reassigned.
Bring It Home
Many next-gens spend years studying or working abroad. They come back with new ideas, global perspectives, and sometimes very different views from their parents. This can feel disruptive at first, but it creates space for innovation.
Great succession plans:
- Create a shared vision that blends tradition and change
- Use flexible structures that adapt as the business evolves – what works today does not necessarily work in the future
- Keep a big-picture perspective, combining family values, business strategy, and cultural awareness
Innovation can provide a competitive edge in the market and help the family's legacy grow. Moreover, the process of innovating can inspire family members to learn new abilities, share their thoughts, and feel more involved in the company. If you'd like to learn more about balancing innovation and legacy, read our article 'Harnessing Innovation in Family Businesses'.
The Foundations of a Strong Succession Plan
Succession is more than naming a new CEO or the head of a family council; it starts with preparing the next generation to carry on the family legacy. Successful transitions often rest on three essential pillars: the successor's readiness, their motivation, and the relationship between generations. We'll look at each of these through the lens of case studies.
1. The Successor's Readiness
Preparedness is not just about qualifications. A good successor understands the business's values, its people, and its long-term vision.
Take Roberto, for example. He had an MBA from a top business school, but what truly prepared him to lead his family's vineyard was not the degree. It was the years he spent working side-by-side with his father. He learned the craft of winemaking, built trust with long-time employees, and developed an intuitive feel for the rhythms of the land and the brand's legacy.
When Roberto finally took over, he didn't rush to implement sweeping changes. Instead, he focused on strengthening what was already working. He deepened relationships with key suppliers, improved transparency in day-to-day operations, and gradually introduced new sustainability practices that aligned with both his vision and the family's values.
Employees respected his leadership because they had seen him grow within the business. Customers responded positively to the subtle updates he made to the product line, which honoured tradition while appealing to a younger market. Under Roberto's leadership, the company expanded into new markets and gained recognition for blending heritage with innovation. He succeeded because he knew the people, the land, and based his vision on the family's legacy.
2. The Successor's Motivation
Willingness matters as much as ability. True leadership is born out of a genuine wish to take on the role and grow the legacy in a meaningful way.
Consider Aisha. With a strong background in tech and a stellar track record from her time in Silicon Valley, she was the natural choice to succeed her father as CEO of the family's software company. But as succession talks became more serious, it became clear that Aisha's true passion lay elsewhere — she was deeply committed to environmental causes and had long dreamed of using technology to tackle climate issues.
Rather than pressuring her to follow the company's established path, the family took a step back and asked: How can we build a bridge between Aisha's passion and our business? Together, they reimagined the company's future. Aisha led a strategic pivot toward green technology. Under her guidance, the company has developed energy-efficient software solutions for smart homes and partnered with environmental organisations to build sustainable digital infrastructure.
The shift opened new market opportunities, attracted purpose-driven talent, and refreshed the company's public image. Aisha felt personally invested in the business, not out of obligation but because it now reflected her values. Her leadership brought renewed energy and a sense of direction that the whole family could rally behind.
3. The Relationship Between Generations
Trust and alignment between generations are essential. But succession doesn't always mean handing over the reins to a single heir: it can also mean creating space for new ventures to grow alongside the legacy.
Take Mikhail and his mother, who had built a successful fashion label known for timeless, elegant designs. Mikhail respected the brand's reputation, but his creative instincts pulled him in a different direction, toward bold streetwear, digital culture, and a faster-moving, younger market. Their visions clashed, and early conversations about succession felt like a choice between preserving the old or replacing it with something new.
Instead of forcing a compromise, they explored another path. Mikhail's mother decided to bring in an experienced CEO to continue leading the original brand, someone who understood and could protect its values and aesthetic. At the same time, she supported Mikhail in launching his own label, one that reflected his personal vision and spoke to a new generation of consumers.
The two brands remained separate but complementary. Over time, they began to collaborate and share resources, exchange ideas, and reach new audiences. What began as a potential conflict turned into the foundation of a broader fashion portfolio, led by two generations with different strengths and styles. By allowing each person to lead in their own way, the family expanded its legacy, laying the groundwork for a family-led fashion empire.
Conclusion: Succession Is a Journey, Not a Moment
Succession is never just a matter of handing over the keys. It's an ongoing process that touches identity, ambition, relationships, and culture. When families take the time to plan intentionally—honouring the past while embracing the future—they can build something that lasts.
References
Bakiewicz, A. (2020). Cultural Embeddedness of Family Business Succession: The Perspective of Next Generation. International Journal of Contemporary Management, 19(1), pp. 7–27. https://doi.org/10.4467/24498939ijcm.20.001.12666
Handler, W.C. (1990). Succession in Family Firms: A Mutual Role Adjustment Between Entrepreneur and Next-Generation Family Members. Entrepreneurship Theory and Practice, 15(1), pp. 37–52. https://doi.org/10.1177/104225879001500105
Schulze, W.S., Lubatkin, M.H., Dino, R.N., & Buchholtz, A.K. (2001). Agency Relationships in Family Firms: Theory and Evidence. Organization Science, 12(2), pp. 99–116.
