Generational Transition

Over 65% of middle market business owners express a desire, during their lifetimes, to transfer their companies to the next generation.

However, it has been estimated that (on average) fewer than 30% succeed in doing so.

Family Enterprise Business Services

When a business reaches a point of generational transition two things occur: (i) there is no way to "put-on-hold" the ongoing year-to-year competitive pressures associated with being in business, especially not in today's world and, on top of that, (ii) typically 70% or more of the key shareholders, directors or advisory board members, and C-level executives and senior officers must be replaced within 7-to-10 years. Managing through a period of generational change is no easy task.

Further, companies are often slow to begin. Based upon our experience, we know that it typically takes 2-to-3 years to be assured that you have "got it right" with finding the replacement for any one person. Generational transitions are, therefore, best addressed early on, but often are not.

These facts underscore that successful generational transition planning and execution is a complex management challenge. In addition, there is an understandably broad array of stakeholders that are often dependent upon a successful outcome. These include shareholders, heirs and beneficiaries, and also employees, their families, customers, suppliers and frankly "the community at large". We, therefore, most often think about the transition of a business from one generation to the next as "Generational Stewardship" because of the broader economic consequences relating to the results.

As businesses grow and transition from one generation to the next, the ownership structure typically becomes more complex, as control is shared among a larger and more diverse group of stakeholders (e.g. future generations of family members, family trusts or entities, directors and management, or outside investors). Evolving and transitioning ownership and control requires rigorous and effective shareholder and corporate governance processes.

HWSC's services focus on protecting businesses during generational transitions and managing the key disruptors of successful transitions, such as ineffective growth strategies, shareholder conflicts, weak succession plans, incompatible trustees, unprepared heirs, and insufficient time and effort. A successful business generational transition plan should recognize that value erosion factors, such as lack of market comprehension, poor strategic resource management, or tribal warfare and organizational misalignment could arise. Tomorrow's governors and leaders must be capable of addressing and eliminating such value erosion factors.

Generational Transition Support



Generational Transition Plan Development

Assisting businesses through generational transitions, while growing larger, more valuable businesses.

Ownership Governance & Monitoring

Advocating the parallel governance systems; one for ownership development and the other for business oversight.

Business Governance & Monitoring

Helping clients develop and monitor their business governance systems and processes.

Organization Design & Succession Management

Examining the current organizational design, changes that might be made to improve performance or to support the future growth or direction of a business, and to prepare for succession management.

Business Transfer Plans

Assisting in extending ownership into the next generation or beyond.

Questions our clients frequently ask

Clients are often struggling with the following types of generational transition matters:

  • When should we start planning a generational transfer?
  • How do we prepare the next generation of owners?
  • Does our Business Governance Model change at the point of generational transition?
  • Are there Best Practices used by other businesses owning families for generational transfers?
  • Is generational transition a plan or a process?
  • How do we address succession management?
  • What needs to be done differently in the next generation?


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Business Growth Shareholder Liquiedity Company Capitalization Generational Transition