Egon Zehnder, the world’s preeminent leadership advisory firm, in partnership with the Family Business Network (FBN), the world’s leading family business organization, today announced the findings of their new study, “Building a Winning Cross-Generational Culture in Family Business.” The study draws on a survey of 300 family business owners, interviews with 86 family business leaders, and Egon Zehnder’s proprietary Culture Profile analysis.
“We understand family businesses—we respect their strengths, appreciate their challenges, and above all value their unique culture,” said Dominique Otten-Pappas, FBN Board Member. “This new study casts light on just how important that culture is for sustaining, and building on, a brilliant legacy.”
The results include the finding that, while 88% of business leaders agree that a strong culture is vital for ongoing success, only 39% are confident that their culture is very future-ready. To close this gap, cultural shifts must be carefully managed, especially at times of leadership transition. “Family businesses are jewels in the crown of the global economy,” Elaine Yew, Co-head of Egon Zehnder’s Global Family Business Advisory, noted. “To thrive, they must consciously manage culture change, preserving timeless values while adapting to stay relevant and modern. All generations involved need to engage equally in evolving the culture.”
Family businesses are a mainstay of economies and employment worldwide. They owe this success to a distinctive culture, one which typically values family connection, strong principles, and a long-term outlook—but a new generation of leaders may not always agree on how to implement this vision. This report lays out a model for managing culture shifts and achieving successful cross-generational transition. “Leadership succession can be stressful for any company—particularly so where family and business are intimately entwined,” said Alexis du Roy de Blicquy,CEO of FBN. “We’re proud to unveil a roadmap for family businesses embarking on a path of culture change and look forward to supporting them on this journey.”
Key Findings from the Study:
- While family business owners surveyed overwhelmingly (88%) recognize the importance of a strong business culture for the future, a minority (only 39%) feel that their company culture is currently future-ready. This points to the need for managed culture change.
- There is a remarkable level of cross-generational agreement on fundamental values. Yet differences exist, often over approach rather than core principles, and may cause friction. As a new leadership cohort steps in, there is more than ever a need for communication and cultural alignment.
- We see three distinct modes of cross-generational leadership. In the first, the two generations may share a cultural core—but there is little communication and collaboration. In the second, generational approaches are integrated into a unified roadmap. And in the third, the upcoming cohort takes the lead as supportive prior leaders step back. Ideally, a business will progress through these three modes to achieve increasingly successful transitions.
- A successful culture shift must be consciously and actively managed. The study outlines best-practice enablers of this process, as well as clear action steps to advance from mode to mode in a managed and deliberate way.
“With years of experience advising family businesses, we know that farsighted leaders have a long-term view that embraces the next generation,” said Michael Meier, Co-head of Egon Zehnder’s Global Family Business Advisory. “This new study provides the tools to sustain that vision far into the future.”
For more insights on “Building a Winning Cross-Generational Culture in Family Business,” visit the report.
