When the CEO of a family-owned business hangs up the hat, bad things are likely to happen. According to recent McKinsey research analyzing more than 200 family-owned businesses across 50 countries and 10 sectors, these companies underperform on revenues, shareholder returns, and earnings for five years after a leadership transition, compared with the five years before. On average, returns fall 5.7 points. Revenue growth and earnings margins decline too.
So what makes succession in family-owned businesses so difficult to get right?
