The transition between generations is one of the most delicate moments in the life of a family business. In Italy, where 85% of companies are family-run and these businesses generate 80% of the country’s GDP, managing succession is a strategic issue not only for individual companies but for the Italian economic system as a whole. Mozzanica & Mozzanica has chosen to explore this topic through a series of interviews with the children of entrepreneurs who have already gone through this critical phase. This article introduces the subject and raises awareness of the importance of second- and third-generation Made in Italy family businesses. The statistics on succession in Italian family businesses paint a picture that calls for serious attention. Only 30% of family-owned companies survive the first generational transition, while just 12-13% make it to the third generation, and a mere 3-4% reach the fourth. Over the next ten years, around two million Italian businesses will have to face this transition, with a direct impact on the country’s economy. Of the approximately 35,000 family businesses involved in this process every year, only a minority manages to ensure continuity beyond the first generation. A particularly telling figure concerns the age of Italian entrepreneurs: the average age rose from 53 in 2007 to 60 in 2018, with around 30% of business leaders now over the age of 65. This increase points to a widespread tendency to postpone the handover, often with negative consequences for successor preparation and business competitiveness. Succession planning is typically addressed only after the entrepreneur turns 60, when the time available for an effective transition is already limited. The Italian landscape of family-owned businesses shows several characteristics that set it apart from other European countries. In Italy, 66% of family businesses are managed exclusively by family members, compared to an average of just over 30% across Europe. While this model strengthens the bond between family and business, it can also limit the inflow of specialized managerial skills. Only 14% of companies report having a formal succession plan, and most family businesses do not view succession planning as an urgent priority in the next 12 months, even though they acknowledge its importance. Italy also stands out for the significant number of entrepreneurs over the age of 70 who continue to run their companies through highly centralized decision-making, with little delegation of authority. This model, typical of the first generation that built the company, can hinder the necessary transition to more articulated structures and can create difficulties when the time comes to hand over leadership. Founders often see the company as a personal creation and, despite being aware of the need for evolution, may struggle to relinquish control to the next generation. The complexity of this phase stems from the need to balance two interconnected systems that can at times be at odds with one another: the family and the business. The family is oriented towards care and mutual support, while the business is driven by results and competitiveness. When this delicate balance is lacking, one of the two systems tends to prevail over the other. The absence of a clear succession plan creates uncertainty and can trigger conflict both within the family and the company. The next generation may lack the skills and experience required to manage the business effectively, especially when the handover process has not been planned in advance. Not all family members are willing or suited to continue the business, and identifying who in the next generation is genuinely motivated becomes essential in order to prevent future conflict. But the deepest challenge is often an emotional one. For the outgoing founder or entrepreneur, stepping aside after years of work requires courage, empathy and patience in accepting that the next generation may bring different ideas and values. Many entrepreneurs built their companies through sacrifice and determination. Letting go therefore means facing a shift in identity as well as a professional change. Accepting that the next generation may bring different approaches, while preserving continuity with the company’s founding principles, is a necessary part of this process. Despite the critical issues involved, generational change can also represent a major opportunity for renewal in family businesses. Younger generations bring fresh perspectives, greater familiarity with digital technologies and a stronger ability to interpret market changes. This can translate into product innovation, new business strategies and openness to international markets. The transition phase is often the right moment to review and strengthen governance structures. Introducing boards of directors with a broader mix of skills can significantly improve business performance. The 2024 AUB Observatory showed that companies with higher levels of diversity in governance, including members under 40, women and non-family professionals, performed better in the period from 2012 to 2022. Opening up to external managers or expanding the board to include independent professionals can bring specialized know-how and reduce the emotional component of decision-making, particularly when there are no heirs within the family with the right skills. Generational change can also be an opportunity to better distinguish the different roles family members may take on within the business, from ownership and governance to leadership and operational positions. This clarity helps reduce potential conflict and enables each person to contribute according to their capabilities. When roles are clearly defined and expectations are aligned, the family can focus on shared strategic objectives without personal dynamics interfering with day-to-day management. The transition between generations is a multi-year process that calls for careful planning. It is not a single event, but a journey that involves preparing the next generation, defining future roles and gradually transferring responsibilities(18). Preparing successors means giving them structured learning experiences both within the company, through progressive shadowing and increasing levels of responsibility, and outside the business, through targeted education and experience in other organizations. An effective transition requires that members of the next generation be truly prepared for their future roles. The development process should start early and include the transmission of the family business’s founding values and history, helping to foster a sense of belonging and responsibility. A gradual entry into the company, with limited responsibilities that increase over time, allows younger family members to build technical and interpersonal skills. Support from senior figures, both family members and external professionals, facilitates the transfer of tacit knowledge and the development of sound decision-making skills. Italian legislation offers several tools to facilitate the transition, from family holding structures and family agreements to lifetime transfers and corporate governance mechanisms. Italian Legislative Decree 139/2024 introduced a full tax exemption from inheritance and gift taxes for the transfer of a business to direct descendants, provided the activity is maintained for at least five years. These tax breaks reduce the risk of business fragmentation and provide greater stability for family-owned SMEs. An open and transparent culture of communication is essential. Involving all family members in decision-making, listening to different perspectives and taking into account what is perceived as fair by everyone helps prevent conflict and build consensus around strategic choices. Families that invest time in frank and regular conversations about succession are better equipped to navigate the transition more calmly and with more positive outcomes. The success of the transition also depends on the outgoing generation's ability to prepare for a change in role. The departing leader should gradually reduce their operational involvement, moving from a position of command to one of supervision and guidance. This means transferring real responsibilities, not just formal titles, to the successors and accepting that they may handle situations differently from the past. For many entrepreneurs, the business represents a core part of their identity, and preparing emotionally for this separation by identifying new areas of interest is essential to ensure a smooth transition. Defining a gradual exit plan helps both the outgoing entrepreneur and the successors manage this delicate phase. When the handover happens too quickly or in an improvised manner, the risk of conflict and poor decisions increases. In contrast, a transition planned over time allows the next generation to build confidence and skills progressively, while giving the outgoing generation the opportunity to assess the successors’ readiness and step in, if necessary, to provide support. This process requires patience and the acceptance that results may not be immediate. The transition between generations affects not only the day-to-day operations of the business but also the transfer of ownership. Families face complex choices, starting with understanding which members of the next generation are interested in retaining ownership of the company and which may prefer other ways of managing family wealth. Options range from family holding structures to closed shareholding arrangements, each offering specific advantages in terms of governance and flexibility. Transferring ownership during the entrepreneur’s lifetime offers greater control over the process than a post-mortem transfer, making it possible to train the new owners under direct supervision. This approach allows the handover to be organized more strategically, clarifying who remains involved in the business and who is compensated through other family assets. When the transition occurs only after the founder’s death, based on succession rules, tensions and conflicts may arise that could have been avoided through planning in advance. Ownership structure has a direct impact on a company’s ability to make strategic decisions and adapt to market changes. Ownership fragmented among multiple family members, without clear governance rules, can paralyze the business precisely when greater agility is needed. By contrast, a well-structured ownership model, supported by clear protocols and effective governing bodies, can become a competitive advantage, ensuring stability and a long-term vision. Succession in Italian family businesses is a challenge that can no longer be postponed or handled reactively. The next generation represents an opportunity for renewal that must be seized through careful and structured planning. Family businesses that succeed in managing this transition will not only secure their own continuity but also contribute to the overall competitiveness of the Italian economic system. In a context of rapidly evolving global markets, the ability to combine the values and experience of senior generations with the innovation and vision of younger ones represents a distinctive competitive advantage. This transition is not simply a technical or legal matter. It is a transformative phase that involves entrepreneurial, family and emotional dimensions. Facing it with awareness, professionalism and openness to change can turn this challenge into an opportunity for lasting growth for both the business and the family that leads it. The statistic showing that only 30% of businesses survive the first change in leadership should not be read pessimistically, but as a call to action. Entrepreneurial families that invest time, resources and attention in succession planning demonstrate a significantly higher likelihood of success. The difference between businesses that thrive beyond the first generation and those that fade away often lies in their ability to anticipate challenges, address family dynamics honestly and build solid structures capable of supporting future growth.
685 Views The numbers behind a national challenge
The distinctive features of the Italian context
The challenges of the transition: balancing family and business
From crisis to opportunity: the potential of generational change
Planning ahead: the tools of succession
The crucial role of the outgoing generation
Ownership and control: the choices that shape the future
Looking to the future with awareness