Why succession remains one of the most powerful conflict triggers in family enterprises
What “Succession” Really Means
The word succession comes from the Latin successio, meaning a following after. In a family enterprise context, succession is the deliberate transition of ownership, leadership, and management of businesses, assets, and legacies from one generation to the next.
It is not the same as selling a business.
It is not simply inheritance.
Succession involves people, power, purpose, and continuity — which is precisely why it is so complex.
In business families, succession is primarily about family dynamics:
- individual needs and expectations
- perceived fairness
- family roles and identity
- continuity of relationships and legacy
In family businesses, succession is about the enterprise itself:
- ownership and control
- leadership capability
- emotional and practical authority
- business continuity and performance
Most succession processes sit squarely at the intersection of both — which is why they are best described as estate planning on steroids.
Why Succession Is a Conflict Hotspot
Succession plans are formal, written frameworks that guide how transitions should occur. They define objectives, decision-making criteria, roles, and timelines.
Yet succession remains the most common catalyst for conflict in family enterprises. Not because families are incapable — but because succession combines:
- high emotional stakes
- once-in-a-generation change
- unresolved family history
- unclear structures and governance
When succession is avoided, rushed, or poorly prepared, it doesn’t remove conflict — it amplifies it.
The Scale of the Issue
Succession challenges are not marginal. They sit at the heart of the Australian economy:
- Around 70% of Australian businesses are family businesses
- Family businesses employ approximately half of Australia’s workforce
- About 70% of SMEs (5–199 employees) are family-run
- The sector represents $3–3.5 trillion in enterprise wealth
Globally and locally, we are already deep into the largest intergenerational transfer of wealth ever seen:
- An estimated $1.6–3.5 trillion in family business wealth will transition over the next 10–20 years
- Roughly $150–200 billion per year
- Total intergenerational wealth transfer in Australia is projected at $5.4 trillion over 20 years
Despite this:
- Only 19–25% of family businesses have workable, documented succession plans
- Fewer than 10% have governance systems capable of implementing them
The outcome is predictable: succession becomes the tipping point for conflict.
A Hard Truth About Survival
Less than 3% of family businesses survive into a fourth generation.
Some were never intended to — and that’s perfectly valid. But experience consistently shows that most founders do want to leave a lasting legacy. The problem is not desire.
The problem is preparation.
Succession is not an if. It is a when.
Owners and leaders eventually reach a point where they cannot — intellectually, physically, or emotionally — continue in their roles. Families that have not worked on their own continuity rarely earn the right to survive the disruption that succession brings.
Case Study: When Promises Collide
Aurora Food Imports is a second-generation family business importing Thai food ingredients across Australia’s eastern seaboard. Founded nearly 40 years ago by Somchai (69) and Sirilak (67), the business generates approximately $40M in annual revenue.
Their son, Anan (35), has worked his way into the role of Operations Manager. Efficient, ambitious, and forward-looking, he frequently clashes with his father over “old ways versus new ways.” He has long been told that the business would pass to him when Somchai turned 70.
Then everything changed.
Anan’s sister, Knokwan (32), announced she wanted to join the business and share ownership — leaving behind a successful career in professional services. Somchai is delighted. Sirilak is strongly opposed. Anan feels betrayed.
Before any commercial decisions are made, the family is already in crisis.
This is not a business problem.
It is a family problem — and it will inevitably spill into the business.
Succession Is a Process, Not an Event
Best practice succession unfolds over years, not days. It cannot be triggered by crisis, illness, or urgency without significant risk.
Effective succession requires time to:
- transfer knowledge
- develop leadership capability
- shift authority and identity
- test new structures
- resolve emotional resistance
Rushed succession almost always leads to power struggles, resentment, and destabilisation.
Succession as a Conflict Catalyst
Succession rarely creates conflict. It exposes it.
Over decades of work with family enterprises, the same underlying issues appear repeatedly:
Lack of clarity
When leadership transitions are vague or ambiguous, frustration builds until it erupts or paralyses decision-making.
Generational misalignment
Older generations often prioritise stability and preservation. Younger generations seek growth, innovation, and change. Without deliberate alignment, conflict is inevitable.
Identity and control issues
For founders and long-term leaders, stepping back can feel like losing relevance, authority, and identity. Resistance often appears as control, dominance, or obstruction.
Too little, too late
Late planning compresses complex transitions into crisis timelines, leaving no space for learning or adjustment.
Poor preparation
Ad-hoc processes invite grievances, opportunism, and the weaponisation of old resentments.
Weak family governance
Without clear forums, rules, and decision-making structures, families lack the scripts needed to navigate difficult moments constructively.
Strategies That Reduce Succession Conflict
Start early
Succession conversations should begin long before they are needed, ideally within structured family forums and councils. Transparency reduces surprises — and litigation risk.
Build family governance
Establish family councils, family forums, advisory boards, and a family constitution. These provide clarity, continuity, and a shared reference point when tensions rise.
Deal with issues directly
Avoidance fuels resentment. Sensitive topics — fairness, contribution, entitlement — must be discussed openly, often with skilled external facilitation.
Embed succession in the Family Plan
Succession should be part of an ongoing family strategy, with clear milestones, roles, and accountability — not a standalone project.
Support the humans
Succession is emotional. Coaching, mentoring, counselling, and facilitation are often the most valuable investments families can make during transition.
Get the facts
Independent valuations and objective data can help defuse perceived unfairness — even when the real issue is emotional rather than financial.
Final Thought
Succession is one of the most demanding challenges a family enterprise will ever face. Done well, it strengthens legacy, relationships, and continuity. Done poorly — or not at all — it becomes a predictable source of conflict, fragmentation, and loss.
Failure to plan is not neutral.
It is, as Benjamin Franklin observed, planning to fail.
Succession is not about endings.
It is about earning the right to continue.
Taken from the up coming book:
Making Sense of “Family Business”
(60 Common Causes of Family Business Conflict, and how to deal with them)
