Most family business founders aspire to build a firm that will last for generations to come. Sadly, that’s a rarity: According to Gallup, less than one-third of global family firms outlive the founder, and a scant 12 percent make it to the third generation.
Inadequate succession planning is often blamed for low rates of generational transfer. However, succession is only one facet of a much broader slate of policies and practices that promote longevity in family business. The term for this brand of business discipline is institutionalisation. Without it, family firms are defenceless against the threats to leadership, governance, talent management and decision-making that unavoidably crop up for all organisations that survive past the early developmental stages.
