How Family Businesses Should Plan for Generational Success

Goldman Sachs EMEA and investment banking chairman FX de Mallmann and global wealth management chairman Tucker York discuss why family-owned businesses rarely survive to a second generation and how enduring ones structure governance. They describe succession as two separate decisions — management continuity and transfer of asset ownership — and note the shift founders face after a sale or IPO, moving from a concentrated operating business to liquid wealth.

1. Companies with significant family ownership generate roughly 70% of global economic output and 60% of jobs, but only three in 10 survive to a second generation.
2. Succession works best when founders separate management continuity from asset ownership transfer, start early and build in operational flexibility.
3. Both diversified-ownership-with-professional-management and family-controlled-and-managed models have produced successful companies.
4. A sale or IPO moves founders from a concentrated business to liquid wealth, requiring a mindset shift about what to do with it.