PwC's 2025 "Family Business Survey" reveals that Vietnamese family businesses are among the highest growth-oriented globally, with nearly one-third pursuing aggressive expansion strategies.
However, after decades of development, many founder-built businesses are entering the phase of preparing for succession to the next generation.
During this process, common concerns include the readiness gap of the next generation, differences in vision, and a lack of structured plans, according to the survey.
Globally, unsuccessful transitions of leadership in family businesses are not uncommon. In the United States, inheritance disputes among ultra-wealthy families are increasingly prevalent as they become more prosperous and live longer, according to expert Scott Rahn of the law firm RMO. CNBC gathered four recommendations from experts to facilitate a smooth transition.
**Communicate as early as possible**
Mallory Findley, an expert at Rockefeller Capital Management, states that the biggest mistake families make is waiting for a crisis, such as a stroke or a disagreement, before discussing succession. By then, emotions are often high, and trust among members can be fractured.
"The better approach is to start when everyone is still capable of truly thoughtful participation, when everyone is happy, healthy, and present", Findley said. Opportunities for discussion include the birth of a new family member or changes in ownership structure.
BJ Goergen Maloney, global director at J.P. Morgan Private Advisory, suggests families establish a routine of regular conversations to make discussing the transition feel natural. These gatherings do not need to be overly formal; they can be as simple as a Sunday dinner. "The key is to create a space for everyone to communicate transparently and listen to each other's opinions", she noted.
**Gradual transition**
Early health assessments are necessary if the family head shows signs of cognitive decline or dementia. However, the succession process should not be rushed.
According to Valerie Galinskaya, director of Merrill Center for Family Wealth, cognitive decline often occurs gradually, and the needs of older individuals change over time. The transition process should evolve accordingly.
Specifically, instead of focusing on the family head's cognitive abilities and attempting to seize control, family members should identify who is best suited to take over each specific task. Dan Griffith, director of wealth strategy at Huntington Bank, warns that children who try to gain control too quickly or constantly question their parents' decisions can be counterproductive. "In such cases, they inadvertently push their parents into the hands of those seeking to exploit them", he cautioned.
**Respect the founders**
Mark Parthemer, director of wealth strategy at Glenmede, emphasizes that tact is key. Those who built the family business often tie a significant part of their personal identity to their executive role. "They were once the pivotal figures everyone relied on. Therefore, immense delicacy is required when transitioning them from that position", he said.
There are many ways to make the transition an empowerment rather than a divestment of power. Inviting them to honorary chairman or senior advisor roles is a common method. In these capacities, even if they are no longer handling complex business deals, they can still attend strategic meetings and contribute their insights. This helps seasoned founders feel useful and valued.
If parents can no longer participate in the business, the next generation should discuss and acknowledge other values they impart. "For older individuals, that value often includes wisdom, family history, the ability to maintain emotional balance, an advisory role, or simply the capacity to unite family members", Mark Parthemer stated.
**Foster family consensus**
According to Valerie Galinskaya, director of Merrill Center for Family Wealth, it is rare for all siblings in a large family to share the same views. She believes it is important for them to reach a certain level of consensus before discussing matters with their parents.
Organizing family meetings is the solution in this situation. Experts recommend that members establish ground rules beforehand, such as excluding spouses or partners. If it is difficult to arrange a full in-person gathering or if one member tends to dominate the conversation, online meetings can be effective. "There, everyone is just a rectangle", she said.
The goal of these meetings is not necessarily to achieve universal agreement, but to address unspoken issues. Discussions during these occasions aim to reduce suspicion, accusations, and fractures caused by a lack of complete information. "The next generation in a family does not always need to agree with the decisions made. But if they understand the reasoning behind them and the decision-maker clearly explains the rationale, they will often accept them", she added.
Phien An (via CNBC)
