Succession risk or smart move? Why Gen X is increasingly missing out on the family business

Family business owners are increasingly choosing to pass leadership directly to grandchildren rather than to their own children.

It’s a shift that reflects changing demographics, longer leadership tenures and evolving views on legacy, according to Ben Persofsky, Head of the Center for Family Business at Brown Brothers Harriman, who has been sharing his insights with InvestmentNews.

This “skipped generation” succession pattern is emerging now largely because founders are remaining active in their businesses for longer than previous generations. As Persofsky explains, “This pattern is emerging largely because owners are living and leading for longer, all while keeping their identity deeply rooted in their business.”

He adds that succession itself is being reimagined as a longer process. “These owners are thinking of succession as a longer transition, potentially spanning a decade or more,” he says.