A guide for a successful generational transition: 7 Rules to Follow

ALMOST ONE OF FIVE FAMILY BUSINESSES WILL FACE A CHANGE OF GENERATIONS IN THE NEXT FIVE YEARS. IN RESPONSE TO THE NEEDS OF ENTREPRENEURS ASSOLOMBARDA, BOCCONI UNIVERSITY AND AIDAF PRESENT A GUIDE TO BUSINESS SUCCESSION

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.