By Claudio Fernández-Aráoz,
Sonny Iqbal, and Jörg Ritter
From Harvard Business Review, April 2015
Claudio Fernández-Aráoz is a senior adviser at the global executive search firm Egon
Zehnder and the author of It’s Not the How or the What but the Who (Harvard Business
Review Press, 2014). Sonny Iqbal and Jörg Ritter are partners at Egon Zehnder and co-
leaders of its global family-business practice.
According to the Family Business Institute, only 30% of family businesses
last into the second generation, 12% remain viable into the third, and 3% operate
into the fourth generation or beyond. Those that do continue often see their value
decline significantly as a result of mismanaged succession.
The authors, all associates of the global executive search firm Egon Zehnder,
partnered with Family Business Network International to analyze 50 leading family
firms. Through interviewed with both family and nonfamily executives, they
discovered that the most successful of these companies do four things well: (1)
They established good governance practices that separate the family and the
business and ensure oversight from a professional broad. (2) They are careful not to
lose what make them special - a quality the authors call family gravity. (3) They
assess future leaders on alignment with company values as well on competencies.
(4) They follow a disciplined selection process when considering candidates for the
top post, and take care to provide meaningful support during the integration process.
1. Avoid the Traps That Can Destroy Family Business by George
Stalk and Henry Foley
2. What You Can Learn from Family Business by Nicolas
Kachaner, George Stalk, and Alain Bloch
3. Generation to Generation: How to Save the Family Business
by Boris Groysberg and Deborah Bell
4. Conflicts That Plague Family Businesses by Harry Levinson