Family Business Advisory

Many of the most respected and best-performing companies in the world are family-owned. With their long-term vision and strong capacity to create jobs, family businesses are a major driver of economic growth in most national economies and make unique contributions to society. Sustaining this success often depends on clear governance and strong leadership practices that help families thrive across generations. 

Despite their inherent strengths and global economic significance, family-owned companies face unique vulnerabilities and challenges. Potential sources of discord within family business stem from challenges such as:  

• Generational transitions  
• Major investment decisions  
• Appropriation of profits 
• Leadership appointments  

After all, there is no reason to expect entrepreneurial families to be less quarrelsome than any other group of relatives. The consequences of their disputes, however, can be more serious and far-reaching.  

For family-owned companies to sustain dynamic progress across generations, they need to manage the inherent conflict between family and business on a consistent basis. Finding an equilibrium that leverages the best aspects of both family and business is difficult, but if done well, offers handsome rewards.  

This is the art of family business management.  

Building a strong cross-generational culture has emerged as a critical factor in achieving this balance, ensuring that values and vision are shared across different age groups while embracing innovation and change. 

Egon Zehnder’s Family Business Advisory works closely with families, founders, owners, and senior executives to navigate the challenges of leadership, succession, and governance across generations.  

Based on decades of experience serving many of the world’s finest family companies, we know that the critical first step in this journey is to build alignment among family members around their unique philosophy and approach to business and ownership.  

With this in mind, our Family Business Advisors work closely with family members and owners to create an environment that drives the best people decisions in their specific context.

A well-defined governance framework that separates business from ownership and defines a clear process for families and owners to resolve family and business issues is vital to family business management success. This could take the form of Family Councils, Owners’ Councils or Advisory Boards, helping families balance influence with professional management and create structures that endure across generations. 

Our Family Business Advisors bring global knowledge and experience to help you craft the appropriate governance frameworks and define the remit of these bodies. Based on a clear assessment of the strategy and the ownership structure, we proactively assist our clients in selecting independent directors and advisors on a competency-based basis to bring these governance mechanisms to life. For many of our family business clients, we also periodically review the effectiveness of these governance bodies. 

Founder transition is an emotional and challenging issue that every family business faces at some time. Each generational transition is an opportunity to reflect on the future strategy and the ownership and management structure. 

Preparing for this transition in advance is critical to the continued success of the business and requires thoughtful planning rather than being managed only as an eventuality.  

Developing future leaders early and ensuring objectivity and meritocracy in appointments is vital to the long-term success of family business management. We frequently work with families to identify fitting roles for next-generation members and create plans to groom them to fully realize their potential. 

We assist family companies in planning for transition by: 

• Obtaining an accurate picture of existing family talents and their motivations,  
• Benchmarking them against the best available internal and external resources (especially in the critical phase of founder transition),  
• And analyzing their potential, using a unique methodology, in the context of the future strategy of the business and the vision of the family.  

Succession is one of the biggest inflection points in a family business. Getting it right is critical. Therefore, succession needs to be planned well in advance and the process needs to be executed thoroughly. 

Egon Zehnder’s consultants work with the key stakeholders to prepare a succession process that encompasses both internal and external candidates, building alignment across generations and ensuring that the role and responsibilities are clearly articulated and understood.  

In all these decisions, we know it’s important that there is a good fit between family values and culture and the individual’s value systems.  

For many family firms, recruiting top executives from outside the family represents a major challenge. At the start of such assignments, we ensure all stakeholders are aligned regarding the expectations and profile of the senior executive to be attracted. By drawing up value- and competency-based CXO position profiles, Egon Zehnder helps your family company identify and evaluate relevant internal and external, family and non-family candidates. 

Regardless of whether the candidate is a family or non-family member, the first six months of integration are critical to ensuring the expected value and impact. Our Accelerated Integration program helps new leaders build momentum quickly and deliver the performance the role demands. For non-family CXOs in particular, earning the family’s trust and adapting to their working style becomes especially important.  

We pride ourselves on the fact that most of our client relationships are long-term. We earn your loyalty by being energetically responsive to your needs and tenaciously committed to the legacy and ongoing success of your family business. We perceive ourselves as an equal, global partnership. Our values and philosophy are very similar to family firms and we are uniquely qualified to understand the dynamics and challenges particularly in respect to governance and succession issues of family business environments. Our goal across all our services is to help you make better people decisions for critical roles, systematically increase your leaders’ readiness to take on bigger challenges, build a sustainable talent pipeline, and ensure that your family business has the diverse strengths required to sustain competitive advantage.