Millennial CEOs are ready to lead their family businesses, according to findings of the Successful Transgenerational Entrepreneurship Practices (STEP) Project 2019 Global Family Business Survey.
That’s good news because the survey also finds that more than half of global family CEOs do not have a formal retirement plan and 70 percent of global family businesses do not have a formal succession plan.
“The shift from the boomer generation to the millennials is happening,” said William B. Gartner, Bertarelli Foundation Distinguished Professor of Family Entrepreneurship. “This report shows that some families are prepared for this change while many are not.”
Questions for Family Business Leaders
The 2019 STEP Global Family Business Survey, The impact of changing demographics on family business succession planning and governance, elicited responses from more than 1,800 family business leaders from all around the world. Forty-eight affiliated universities contributed to this study. Family business leaders responded in 18 languages, from 33 countries, and across five world regions. Among the questions asked were:
- How do changed demographics impact family business succession and governance?
- Do CEOs belonging to younger demographic cohorts such as Millennials have different managerial and leadership style?
- How are family business leaders planning their personal retirement plans and the company succession plan?
- What are the differences across cultures?
“Demographics have changed significantly over the past century and unfortunately, our knowledge and understanding of business families has not adapted to those changes,” said Associate Professor of Entrepreneurship Matt Allen, who serves as the faculty director of Babson’s Institute for Family Entrepreneurship. “In particular, longer life expectancy combined with changing expectations regarding work and leisure are putting significant strain on business families as they adapt to situations that prior generations never dreamed of. Take for example a family where next-generation leaders are waiting (in their 60s!) for the current generation to step down so that they can move into primary leadership positions. This is just one of the issues that this ambitious data collection effort addresses. No research to date has studied these issues as this level of detail with this kind of global coverage. The potential to increase our understanding of business families in the 21st century is unprecedented.”
- There is a need for family businesses globally to implement CEO retirement plans.
- Family businesses globally must take into account the fact that the next leaders will be Millennials.
- Family businesses need to implement more than one family governance tool.
- More female CEOs are needed and beneficial.
- It is time to pass the baton to Millennial CEOs to boost family business performance.
The report is co-authored by Andrea Calabrò, STEP Global academic director and IPAG Family Business Institute, IPAG Business School; and Alfredo Valentino, STEP Global research champion and ESCE International Business School. The project is sponsored by the KPMG Enterprise Center of Excellence for Family Business.