Business Succession: Engaging the Next Generation

Starting or sustaining a business with family can be complicated—both emotionally and financially. Peter Jaskiewicz, a professor of family enterprise at the Telfer School of Management at the University of Ottawa and founding director of the Family Enterprise Legacy Institute, has spent his career exploring how families can maintain purpose and prosperity through their entrepreneurial ventures.

We talked to Peter about what makes family businesses succeed, establishing a family business as a living legacy, and how to effectively transition from one generation to the next.

Peter: It comes down to planning, preparation, communication, and support. My uncle started a business, but after he died the family was utterly unprepared for succession. The personal dynamics were very emotional, which led to conflicts, and we had little guidance on how to address them. Parts of the business were sold, the remainder was closed, and people lost their jobs. It was when I started researching problems faced by family businesses that I met other families who had similar experiences to mine.

Now, at the Family Enterprise Legacy Institute, we try to help develop and support the next generation of owners, to disseminate best practices for the most common issues faced by family businesses—such as succession planning, governance, and maintaining identity through change—and to educate other professionals who are working with and for these families.

Peter: Successful family businesses tend to be strong in two key areas: transparency and role modeling.

If you want to keep the business in the family, you shouldn't hide anything or keep the next generation at arm's length. Involving children in the business from a young age and discussing what it means to be a business owner is incredibly powerful. Research shows that talking openly about past entrepreneurial achievements—along with setbacks and how they were overcome—can help foster transgenerational entrepreneurship.

Nurturing an entrepreneurial mindset is also essential, and so much of that is learned by witnessing how older family members conduct themselves. If business ownership looks satisfying and meaningful, the younger generation internalizes that as a source of fulfillment. Conversely, if all they see is long hours and strained relationships with partners or children, they may not view the business as a legacy worth inheriting.

Peter: There's no substitute for firsthand exposure, particularly for older children and teens. Taking them to the office, to events, and even on company trips, when appropriate, allows them not only to hear about the business but also to see and get a feel for it themselves.

Later on, they can help out on weekends or run errands. However, their participation should never feel imposed or obligatory; it should be framed as an interesting experience and a learning opportunity, not a top-down command. When these early experiences are positive, adult children later recall them as meaningful and formative, and they're more likely to want to continue in the business.

Peter: One big mistake is preparing the next generation only reactively, when the senior generation begins to approach retirement. Instead, this should be a planned, proactive transition that's years in the making—ideally with outside help from a succession advisor—and tailored to developmental activities that prepare them to assume the reins. As they progress, that might mean giving the younger generation greater responsibility for certain business areas or allowing them to represent the company at events. Later, as the handover date approaches, those developmental activities might shift to focus on coaching and mentoring so they're prepared to assume key leadership roles.

The senior generation tends to feel more at ease when they see the rising generation growing into their responsibilities and adding value. Over time, the older generation learns to let go, and the younger generation learns to lead, confident that they can handle whatever may be around the next corner.

Peter: Every transition requires time and effort, triggers emotions, and will inevitably involve tensions. Of course, some level of conflict, particularly around specific tasks or processes, is normal and can even be beneficial to achieving better business outcomes. But working with a legacy advisor can help families manage disagreements constructively through dedicated training, diagnostic tools, and coaching.

Peter: You have to listen to your heirs; if they're sacrificing an essential part of themselves to fit a mold, the business could suffer. Sometimes it helps for them to realize their ambitions out in the world, then bring that energy and experience back to the business—which is one way for the enterprise to evolve and even grow. But if it's not a good fit, don't force it. Instead, look for ways they can use their strengths elsewhere, such as by taking a bigger role in family philanthropy or helping manage investments. A family business should be fulfilling for and of interest to everyone involved, not simply a money-making enterprise—at least if you want it to go the distance.