Family Businesses Survive When Leaders Learn to Let Go | Opinion

Family businesses can thrive for a century, but they risk losing that trust in just one generation. Often, leaders mistake ownership for responsibility, believing the company's future must follow their wishes. However, a business thrives on employees, customers, and suppliers, who depend on its stability. Its owner may hold shares, but the consequences of its decisions impact a broader community.

Deloitte’s 2026 research indicates that 40% of family businesses anticipate a CEO change within the next decade, yet only 46% have comprehensive succession plans, highlighting a significant gap between anticipating change and preparing for it.

In my family-owned automotive chemicals company, I have four generations of relatives involved, and I have a newborn son. I want to give him the choice of whether he wants to join the business someday, as my responsibility is to provide him with an opportunity, not an obligation. My leadership perspective has been shaped by various individuals outside my family, emphasizing that a surname does not guarantee competence, nor does a different surname diminish it.

A leader best equipped to lead the company may be someone who has earned the trust of its people and understands its customers deeply.

An unprepared successor can lead to consequences such as experienced employees leaving, product standards slipping, and customers shifting their loyalty. The company may retain its name but lose the qualities that gave it value. A healthier future involves outgoing leaders preparing capable successors, investing in their workforce, and allowing the next generation the room to make necessary changes.

Failing to prepare for succession can threaten livelihoods, disrupt supply chains, and remove trusted products from people's lives. However, a successful succession can preserve jobs, support local economies, and give future generations a place to build careers. When a business is sold to private equity, it provides financial security for the owner, but one must consider how the new ownership will treat the people who know the business inside out and whether product quality and customer relationships will remain a priority.

Private equity firms can offer capital and expertise for growth, but it is crucial not to treat the transaction as the end of the owner's responsibility.

Stewardship becomes evident during challenging times, such as when rising raw material costs force a company to limit its marketing expenditure. While spending can be adjusted, trust is much harder to rebuild. Employees carry institutional knowledge that cannot be replaced quickly, and loyal customers provide validation that no advertising campaign can match.

Stewardship requires change, particularly in industries like automotive, where electric car sales have exceeded 20 million worldwide, accounting for a quarter of new car sales. Family businesses must respond to evolving technologies while maintaining their relevance. Owners must begin preparing for succession before they retire or face financial pressure, identifying capable successors, giving them meaningful responsibility, and establishing clear plans for transferring knowledge and authority. Scrutinizing a prospective buyer's intentions is equally important as examining the purchase price.