)
Succession planning remains the biggest challenge for family businesses, according to a new report, despite the rising generation being an experienced cohort of leaders who are ready to take charge.
The 2025 Family Business Report released by Grant Thornton reveals that more than 30 per cent of the rising generation are aged between 44-64, presenting a wealth of experience and knowledge that makes them well prepared to step up.
But according to Kirsten Taylor-Martin, Grant Thornton partner and national head of family business consulting, the subject of succession often makes for “complex” and “uncomfortable” discussions in the family environment.
Highlighting the generational divide, the report finds that succession planning is the top challenge for the rising generation, while the incumbent generation is most concerned about attracting and retaining staff.
Succession planning ranks as the third top challenge among the incumbent generation behind cashflow issues.
“The report revealed interesting insights, with succession planning continuing to be a shared challenge across generations,” says Taylor-Martin.
“Both generations share this challenge because succession planning is complex and often uncomfortable to talk about, requires strategic foresight, emotional readiness and, it’s fair to say, succession is still thought of alongside retirement."
Taylor-Martin says the age profile of the rising generation was an insightful finding in the report.
“With more than 30 per cent of this group aged between 44-64, it shows we have a cohort of experienced leaders in waiting – so succession planning is more critical than ever,” she says.
“If you’re only thinking about succession planning alongside retirement, you may not be giving yourself enough time and space to plan well to ensure your family business is growing for generations to come.
“Succession planning is not synonymous with retirement – it should be a strategic priority as it’s about being ready for change, whenever that may come.”
Grant Thronton notes that succession planning is critical as Australia prepares for an “unprecedented $3.5 trillion intergenerational wealth transfer”, adding that the “stakes have never been higher” for getting succession right.
The global advisory group says succession planning focuses on strategic priorities for the family business and being ready for change, whether within the family, economic factors or across the industry they operate in.
But the report finds that only 19 per cent of Australian family businesses currently have a documented succession plan in place.
“Both incumbent and rising generations agree succession planning is critical to effectively transition leadership within family businesses, but when it’s thought about alongside retirement, often there’s not enough time to plan a smooth handover,” says the report.
Highlighting the complexity of succession planning, the report finds that “challenging family relationships” are listed by the rising generation as the fourth biggest challenge for family businesses. However, this issue doesn’t rate a mention in the top six for the incumbent generation.
Apart from succession and a rising generation eager to step forward, the 2025 Family Business Survey results also exposed differing priorities across the generations.
“The incumbent generation focuses on business operations and external risks, whereas the rising generation focuses on internal family dynamics,” says the report.
Digital adoption is also influencing operations, decision-making and collaboration.
“While some of the incumbent generation approaches technologies like AI cautiously, most of the rising generation is embracing its potential,” says the report.
)
