Family business transition: The case for transformational family businesses
To ensure a sustained impact over generations, business families today must focus on creating the family enterprise of the future, rather than just protecting the future of their enterprises. They must focus on transforming their enterprises, rather than just transitioning their enterprises over time. We explore how families can transform their enterprises by deliberately connecting, collaborating and collectively gaining clarity, such that they can build businesses of the future.

What you need to know

  • Family businesses anticipating generational transition should focus on being future-focused and on how to transform their enterprises.
  • Transformation can involve a change in strategy, scope or structure.
  • Pursuing a transformation provides a great opportunity to involve wider family members, evolving from individual rulership to collective leadership.
  • This requires the family to invest in not just the technical, but also in the relational where they connect, collaborate and collectively gain clarity on the future of the enterprise.
  • This triggers collaborative intelligence and cultivates intellectual diversity. As families enjoy a legacy of transformation, they leave a transformational legacy.
Strategy Published on Simple August 5, 2022

Transitioning refers to “the process of changing from one state or condition to another,” whereas transforming refers to “a marked change in form, nature, or appearance.” It is critical that families focus on transforming, as they often face external pressures that threaten their continued existence over generations. These threats may include economic recessions, technological changes, political volatility or regulatory changes.

Focusing on transitioning over time does not guarantee multigenerational success, as the business model and strategy may be rendered obsolete as a result of external shocks. Instead of being reactive, families can be proactive by driving change to create new opportunities that would be viable in the future, through regeneration, renewal and reinvention.

The modes of transformation that families can employ include:

  • Strategy: setting up new product/service lines, geographic expansion, making new investments or divesting;
  • Scope: driving technological change or driving sustainability measures;
  • Structure: driving structural changes such as setting up a family office, or introducing governance bodies like a board of directors or family council.

It’s critical that families shift from a transitional approach to a transformational one for a couple of reasons.

About the Authors

Nike Anani

Nike Anani

Leadership & next-generation

Building generational bridges in family enterprises to ensure future-focused organisations that leave a lasting legacy.

Connect with Nike Anani

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