Succession is getting real for family businesses

Succession has always mattered in family business, but the latest Deloitte Private research shows in Australia and across the globe it is becoming more immediate, more visible and, for many, more complex. 

Globally, succession is already underway or on the horizon for more than a quarter of families, while 40% of family businesses expect a leadership or CEO change within the next decade. 

The report, Family business succession planning and the next generation, surveyed 1,587 family businesses across 35 countries - each with at least US$100 million in revenue - and features in-dept interviews with 30 senior executives. 

It points to an upcoming period of significant leadership change in family businesses, and with it, a growing need for families to have clearer succession plans and decision-making protocols in place. 

In Australia, that shift is becoming harder to ignore. A changing tax landscape, increasing regulatory complexity and a growing number of family business disputes playing out in public are prompting more families to bring forward conversations that have traditionally been deferred. For many families, the biggest risk is not getting succession wrong, but leaving it too late. 

Having a plan is not the same as being ready 

Most families have started the work. Globally, 89% of families and 82% of family businesses report having some kind of succession plan in place. But only 50% of families and 46% of family businesses say those plans are thorough and well developed. 

For Australian family businesses, the challenge is turning a documented plan into something that is understood, supported and regularly discussed across the family. Often, succession plans sit with one family member or a small group of decision-makers, but have not yet been shared or agreed upon more broadly. 

That is usually where things get difficult. Families may recognise succession needs to be addressed, but day-to-day business issues often get in the way. Regular family discussions focused on succession, ownership and long-term strategy can help build alignment across generations and make succession an ongoing process rather than a one-off event. 

The hard part is human 

If the data says anything clearly, it is that succession is rarely held back by a lack of intent alone. The top three challenges are next-generation readiness at 35%, difficulty identifying a suitable successor at 33%, and current leadership being reluctant to relinquish control at 32%. 

But herein lies a problem with succession. Next-generation family members are most commonly found in technology and philanthropy roles (51%), sales and marketing (50%), and innovation and development (49%). While these roles provide valuable experience, they do not always offer the breadth of operational and commercial responsibility associated with executive leadership positions. 

As family businesses become more professionalised, senior roles such as CEO and CFO increasingly require formal qualifications, commercial expertise and proven leadership capability. 

As a result, succession is becoming less about identifying the next family member in line and more about whether potential successors are being properly prepared. Families may still want leadership to remain within the family, but future leaders need the skills and credibility to run a modern business. That means giving potential successors meaningful exposure to decision-making, operations and governance well before a leadership transition becomes imminent. 

What comes next may look different 

The winds are changing across family businesses as they are becoming more open to outside leadership, with the share expecting a non-family CEO after succession projected to double from 13% to 26%. 

That shift is not about stepping away from family stewardship. Rather, it reflects a growing recognition that ownership and management do not always need to sit with the same people. 

For families, the key question is becoming less about preserving a traditional leadership model and more about ensuring the business has the capabilities it needs for the next stage of growth. 

In many cases, the conversation is no longer centred on which family member will take over. Instead, families are asking who is best placed to lead the business, while ensuring ownership and long-term stewardship remain within the family. 

External CEOs can bring stronger governance and an independent perspective, while allowing family members to focus on the areas where they can add the most value. They can also make succession conversations easier, reducing pressure to identify a family successor at all costs. For businesses that may eventually seek private equity investment or consider a sale, independent leadership and stronger governance can also be viewed favourably as signs of a more mature, scalable and less founder-dependent business. 

Succession has never been a simple handover of ownership or leadership. Increasingly, it is becoming a test of how well a family business can balance legacy with the realities of a modern business environment. 

The research suggests the question is no longer simply who takes over next. It is whether the business is ready for what comes after, and whether planning has started early enough.