Offspring who take over family businesses from a previous generation believe they have to work harder to prove themselves and often plan significant changes to the organisations.
The PwC study comprises interviews with more than 200 family businesses, accounting for over 9 million UK jobs, £80 billion in tax receipts and a quarter of the country’s GDP.
It show millenials have reservations about taking over the business from their baby boomer parents. This leads to what is referred to as the “sticky baton” principle, with 64% of respondents saying they think it will be hard for the current generation to let go.
More than a third of offspring of family CEOs (35%) thought they would definitely take over the reins of the family business. Of these, 73% said they were looking forward to the challenge.
Offspring cited the biggest challenge would be gaining the respect of co-workers (59%) and 80% say they have big ideas for change and growth.
Henrik Steinbrecher, PwC global middle market leader, said adapting a business to the growing pace of change is the biggest challenge new leaders face.
“The transition from start-up venture to family firm is commonly the most fraught,” he said. “Of those taking over under these circumstances; 20% say they’re not looking forward to running the business, compared to 8% for respondents as a whole.”
Sian Steele, PwC partner and family business specialist in the UK, said the handover can cause issues in management, with both generations working at cross purposes for a time.
”This sort of impasse can slow down decision-making and lead to the phenomenon of the ‘sticky baton’, where the older generation hands over management of the firm in theory but in practice retains control over everything that matters.”