La Famiglia – Generational Continuity Is Hard

May 8, 2025
La Famiglia – Generational Continuity Is Hard

Why Most Family Businesses Don’t Survive—and What the Oldest Ones Get Right

Running a successful family business is an incredible achievement. Sustaining one across multiple generations? That’s a rare and complex feat.

Statistics paint a sobering picture:

  • 70% of family businesses fail or are sold before reaching the second generation.
  • 90% don’t make it to the third.
  • Only about 3% survive into the fourth generation and beyond.

So, why do most family businesses struggle to stand the test of time—and what sets the enduring ones apart?

The Top 10 Reasons Family Businesses Don’t Survive Generational Transitions

  1. Lack of Succession Planning Too many founders delay naming or grooming a successor, leading to power vacuums, infighting, or rushed decisions.
  2. Family Conflict Personal dynamics, sibling rivalries, or differing visions can erode trust and decision-making at critical moments.
  3. Unclear Roles and Governance Without clear lines between family, ownership, and management, accountability suffers—and so does performance.
  4. Nepotism Over Meritocracy Appointing unqualified family members to leadership roles undermines both the business and morale.
  5. Failure to Professionalize Many businesses resist bringing in outside talent or adopting modern systems, which limits growth and adaptability.
  6. Inability to Adapt Strategically What worked for the founder or first generation may not work for the next. Markets change—many family businesses don’t.
  7. Poor Communication A lack of transparency between generations, departments, or family members creates confusion and mistrust.
  8. Estate and Tax Planning Issues Poor financial structuring can lead to liquidity crises, forced sales, or unmanageable tax burdens.
  9. No Shared Long-Term Vision As generations expand, interests diverge. Without a unifying mission, commitment wanes.
  10. Emotional Attachment to Legacy Over Logic Resistance to change—often cloaked in tradition—can hold back transformation that’s necessary for survival.

So, What Do the Longest-Lasting Family Businesses Do Differently?

There are shining examples around the world of family businesses that have not just survived but thrived for centuries. Here are a few:

1. Kongo Gumi (Japan)

  • Founded: 578 AD
  • Industry: Construction (temples and shrines)
  • Longevity Secret: Meticulous succession planning, adapting to changing client needs, and a strong service reputation.

2. Antinori (Italy)

  • Founded: 1385
  • Industry: Winemaking
  • Longevity Secret: Innovation in production methods while fiercely protecting quality and brand heritage.

3. C. Hoare & Co. (UK)

  • Founded: 1672
  • Industry: Private banking
  • Longevity Secret: Conservative growth, a focus on discretion, and a transition to professional management with family oversight.

4. Beretta (Italy)

  • Founded: 1526
  • Industry: Firearms
  • Longevity Secret: Diversification, international expansion, and family cohesion around brand identity.

5. Tata Group (India)

  • Founded: 1868
  • Industry: Conglomerate (steel, tech, cars, etc.)
  • Longevity Secret: Strong corporate governance, emphasis on philanthropy, and openness to outside leadership.

Common Traits of Successful Multigenerational Family Businesses

  • Governance Structures: Many establish family councils, boards with independent directors, and formal succession protocols.
  • Professional Leadership: They’re willing to hire external executives and blend professional management with family values.
  • Family Constitutions: Written agreements that clarify roles, responsibilities, vision, and conflict resolution processes.
  • Next-Gen Preparation: Early exposure to the business, mentoring, and even requiring heirs to work elsewhere first.
  • Shared Purpose: A clear, purpose-driven mission that transcends generations and keeps everyone aligned.

Final Thoughts

Family businesses are the backbone of many economies—and a source of deep pride and identity for those who run them. But continuity requires more than love, loyalty, and tradition. It takes structure, foresight, and a willingness to evolve.

The businesses that last for generations don’t just preserve a legacy—they reinvent it with every passing generation.

Paul Fioravanti, MBA, MPA, CTP, is the CEO & Managing Partner of QORVAL Partners, LLC, a FL-based advisory firm (founded 1996 by Jim Malone, (1942-2021) six-time Fortune 100/500 CEO) Qorval is a US-based growth and exit advisory, turnaround, restructuring, business optimization and interim management firm. Fioravanti is a proven advisor and CEO with experience in more than 90 situations in more than 40 industries. He earned his MBA and MPA from The University of Rhode Island and completed advanced post-master’s research in finance and marketing at Bryant University. He is a Certified Turnaround Professional and member of the Turnaround Management Association, the Private Directors Association, Association for Corporate Growth (ACG), Association of Merger & Acquisition Advisors (AM&MA), the American Bankruptcy Institute, and IMCUSA. Copyright 2025, Qorval Partners LLC and/or Paul Fioravanti, MBA, MPA, CTP. All rights reserved. No reproduction or redistribution without permission.

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