Change pays, new generations at the top are worth 10% more growth
Six thousand family businesses will change leadership in the next ten years. 70% of new entrepreneurs graduated. The third generation no longer destroys.
3' min read
Key points
- One in two family businesses waiting for generational change
- There is more running with the change at the top between 70-year-olds and 50-year-olds
- Expected effects on GDP also in 2025-2026
- Seven out of six entrepreneurs graduate, the taboo of experience only in the company falls
3' min read
(IlSole24Ore Radiocor) Looking at the numbers, it seems a curse has been dispelled. "The first generation creates, the second maintains, the third destroys," has been said for decades of Italian family entrepreneurship, so much so as to speak of a third-generation curse, precisely. But the ending told by the data of recent years appears quite different, and Fabio Quarato, director of AIDAF-EY Family Business Strategy at Bocconi University, goes so far as to speak of 'a historic turning point'. A turning point that is good for companies and also for GDP. And which could represent an extra arrow in the bow of growth, considering that in the next ten years one in two of the large, small and very small Italian companies is expected to change generations.
Change at the top pushes growth
A scenario that Fabio Quarato summarises as follows: 'The covid was an accelerator, many seniors at the top decided to hand over, but with more planned and managed generational changes than in the past. And it went very well'. Growth, numbers in hand, is the indicator of change. Among the companies that have seen new generations take the helm between 2010 and 2019, in a scenario in which family businesses in general recorded +7-8% growth per year, the average was one point higher, at around 9%. Which translated means a 10% higher growth than companies where that turnover did not occur.
This is even more evident, according to data from the scenario outlined by Bocconi University, when the change is planned and accompanied rather than left to chance, as was often the case in the past: +1.2% in collegiate leadership models, +1.4% when it is preceded by coaching in previous years. Of course, age factors also play a role: when the person leaving the helm is over seventy and the person taking over is in his fifties, with sufficient experience to lead the company and at the same time innovative ideas and energy, the extra growth rate gained comes close to 2%. In short, change pays.
More complex is the farewell of the founder, for family businesses that often live off the name and authority of the person who created them. In these cases, some shocks remain. But, says Quarato, 'many lessons from the past have been understood, in recent years the generational transition has been planned and guided. On the one hand, the covid has convinced the older generations to hand over in a kind of accelerator. But, on the other, the transition was managed. Both with the appropriate preparation of those who were destined to take the reins of the company, and with a more or less long period of shadowing. And where there are no tears, the effect can be seen'.
The effects in 2025-2026 and the long wave in the next ten years
An effect that, precisely, translates into growth that will also show its results in the coming years. In 2025-2026, 10% more growth is still expected in the companies that chose the change at the top after the pandemic shock, when the rate of generational change at the top accelerated, with almost 600 companies in the last three years changing face.
