Only 30 percent of family-owned businesses make it through the second generation according to research undertaken back in 1987, but experts say it still holds true today and is often referred to as the second-generation curse.
This piece is a good insight into how the second generation can take the mantle and build successful family businesses and help to dispel the myth and beat the statistic too.
One of the key challenges is communication and planning - developing the skills of the next generation so that they can meet the leadership needs of the family firm, skills that may well be different to those of their predecessors, and for the older generation, planning and preparation to step down at the right time.
It is also important not to succumb to 'sticky baton syndrome' when stepping down means just that - handing over the business to the next generation and not meddling!
This is a good insight and one that sets out quite clearly some of the challenges and steps that can be taken to deal with the matter at hand.
With “many of the families that stumble into the second generation and then fail,” said John A. Davis, a Harvard Business School professor, “you’ll see a pattern where the second generation wasn’t developed well and the first generation stayed on too long and didn’t let the next generation take the reins or experiment.” More than three million family-owned businesses in the United States face the issue of how to beat the odds. The three critical goals for such companies are to bring on board and train the next generation, plan for succession and let go when the time is right.