Succession planning for family businesses

Family businesses are among the world’s most established and admired brands. From BMW, to LEGO, Ferrero and Swarovski, they make up two-thirds of global GDP. They are also growing faster than non-family firms, with revenue projected to grow by 84% between 2020 and 2030 to US$29 trillion (compared with 59% for non-family businesses).

 

These companies, passed on to successive generations, benefit from consistency, long-term leadership and inherent authenticity. Yet the very qualities that strengthen them can also limit them. Succession tends to dominate the conversation – as seen in the recent turmoil at LVMH, where investors are demanding clarity on leadership.

 

But there’s a bigger challenge: adaptation. Only 22% of family business leaders actively pursue innovation and fewer than 5% contemplate major transformation (PwC, 2025).

 

Such reluctance to consider adaptation can lead to ultimate failure. Wilko, BHS, Barratts Shoes and Barings Brothers – there are so many examples of family companies struggling to evolve with market shifts, despite strong heritage. Emotional attachment, family dynamics and closeness to the product often make change difficult, even when market forces demand it. Often, the very strengths of care and resilience can lead to resistance to change.

 

It’s hard to adapt, when you’re invested so personally in a business. Here’s how you can embrace change without losing your identity.

 

 

Take the emotion out of decision-making

The most important first step is to acknowledge that emotions run high in family businesses. In these companies, the brand colour is not just a brand colour, it’s the colour that the grandparents chose. This is not a bad thing. It does, however, mean that decisions can take longer. You need to respect that shifts may need more clarity and persuasion.

 

That’s why it’s so important to strive for objectivity when it comes to decision making. This can be especially hard, as decisions often carry layers of meaning, tied to legacy and personal history – so rooting every argument in research, analysis and insight is especially important.

 

Objectivity also means leaning into what you genuinely do better than anyone else. Recognising your strength is sound advice for any business, but even more crucial for family-run enterprises – as it provides an objective framework when looking to adapt. Knowing where you genuinely outperform others, whether through heritage, product quality or deep customer relationships, ultimately helps guide strategic decisions.

 

For example, working with Danish shoe and leather accessories manufacturer ECCO, we helped refocus their brand and marketing activities to better resonate with their core audience, while amplifying the brand’s core values: excellence in craftsmanship, heritage, and a spirit of innovation. These values not only define the brand; they also positively differentiate it in a crowded market. Amplifying them through a refreshed brand position and communications has provided a unifying direction for everything the brand does across all markets.

 

 

Tell your stories in a more effective way

This approach also allows you to rediscover your brand stories – and explore how you can tell them in a more effective way. Family businesses often hold rich histories and human stories that have been cherished and carried by generations. The challenge is telling them in ways that resonate with today’s audiences without losing authenticity.

 

That often means adjusting the narrative while keeping the essence intact. Walker’s Shortbread did this recently. We worked together to modernise its brand while still championing its unique quality and tradition. It resulted in a refreshed look aligned with modern consumer habits, without compromising what it stood for – and has helped the business exceed £200m in sales for the first time in 2024.

 

 

Consider your critical friend

Even with strong stories and clear strengths, deciding how far to evolve a brand can be hard for those deeply attached to its legacy. This is where a ‘critical friend’ becomes invaluable, someone outside the family who can challenge assumptions, offer objective counsel and speak hard truths respectfully.

 

A classic example is LEGO. In the early 2000s, the privately held, family-owned company struggled after over-diversifying. Bringing in external adviser Jørgen Vig Knudstorp acted as the catalyst for transformation. With an unbiased view and strategic clarity, he refocused the company on its core product, helping turn LEGO into one of the world’s most profitable toy manufacturers.

 

A critical friend can create space for honest debate, offer an unclouded perspective and help explore how your brand, strategy or story may need to evolve. Their value comes from being trusted – and empowered – to say what those inside the family sometimes can’t.

 

Adaptation within family businesses will most likely always take more empathy and patience. But when clear, objective thinking is encouraged, combined with the passion that defines a family enterprise, it creates a powerful foundation for adaptation – and ultimately growth. 

 

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Rosie Street is Managing Director at D8 Amsterdam

 

Main image courtesy of iStockPhoto.com and RgStudio