Ep. 72 — James Bly and Carrie Hall: Why Generational Transition Is a Process, Not a Plan

5 min read

Subscribe: Apple Podcasts · Spotify · YouTube · Amazon Music · iHeartRadio · Pandora · RSS

Episode Summary

You’ve built something real, and now you’re staring down the question every family owner eventually sits with: does this thing outlive me, or does it die with me. The 30-13-3 statistic gets quoted as bad news (30% make it to gen two, 13% to gen three, 3% beyond gen four), and Carrie reframed it for me: family businesses actually outlive non-family businesses by a wide margin, and “exit” can be a success, not a failure. James and Carrie from EY’s family business practice came on to walk through what the upper-middle-market families who’ve made it to seven, ten, fifteen generations actually do differently. We got into why it’s transition not transfer (8 to 15 years, not an event), the 11 facts-and-issues categories that take emotion out of the room, parallel governance (business governance for operational competence, owner governance for patient capital), and why succession management beats succession planning: you’re not replacing today’s CEO, you’re building tomorrow’s organization. Real talk on active vs. non-active heirs, why that line is blurrier than people think, and why almost every failure traces back to the same root cause: the current generation acted like the next one would take care of itself.

Watch on YouTube

## Top 10 Takeaways
  1. The 30-13-3 survival rate sounds bad until you compare it to the S&P 500’s 15-year average lifespan.
  2. Call it generational transition, not transfer. It takes 8 to 15 years and it’s a process, not a plan.
  3. Prepare the next generation for the business of tomorrow, not the business of today.
  4. Vision and strategy answer where you’re going. Mission answers how you’ll get there. Don’t conflate them.
  5. Bringing on a board is the move when senior and junior generations start pulling in different directions.
  6. The 11 facts-and-issues categories give you a way to take emotion out of the room and make decisions on data.
  7. Parallel governance separates business governance (operational competence) from owner governance (patient capital).
  8. Succession management beats succession planning. You’re not replacing a person, you’re designing tomorrow’s organization.
  9. Active versus non-active is a false binary. Family members can serve as board members, advisors, council members, or community ambassadors.
  10. Most failures trace to one cause: the current generation assumed the next one would figure it out without a process.

Sound Bites

“We refer to generational transition as a process, not a plan, because implementation typically requires multiple people and steps over a number of years. The focus must be on preparing the next generation for the business of tomorrow, not the business of today.” (@TBD) — James Bly

“There are more than 20,000 companies in Japan over a hundred years old, and the oldest of which is believed to be a hotel founded in 705. Those that have studied this longevity have concluded they survive so long because they’re small, mostly family run, and because they focus on things that aren’t necessarily tied to making a profit.” (@TBD) — Carrie Hall

“If you’ve had a CEO who’s done a great job of building a large and more valuable business over the last 35 years, it’s not inconceivable that to extend the growth of that business and tackle other challenges during the next 25, it could be a different skill set than what’s brought it along for the last three decades.” (@TBD) — James Bly

“The largest, oldest, most profitable family businesses have a dual focus on the business and the family. It’s not one at the expense of the other. That cohesive family really is a benefit when adversity is there.” (@TBD) — Carrie Hall

About This Episode

Carrie Hall is an EY partner and the Americas leader of EY’s Family Business Network, with 30+ years specializing in family businesses across all service lines and global geographies. James Bly is an executive director with EY Family Enterprise Business Services and one of the founders of a practice (started in 1982, acquired by EY) that built a unique model for helping upper-middle-market families grow larger, more valuable businesses and transition them across generations. Together they bring 65+ years of combined experience working with family-controlled companies ranging from $100M to $3B+ in revenue, including families currently in their 15th generation. This episode is a deep tour through the frameworks the most successful multi-generational families actually use.

Resources Mentioned

  • EY Family Business Network — EY’s globally integrated practice serving family-controlled businesses
  • EY NextGen Program — Global one-week program at top-tier universities for young members of business-owning families, with three age and experience tiers and a 600+ alumni network
  • Generational Transition Risk Assessment Survey — EY tool families use to gauge readiness across the key transition factors
  • DGF (Defining the Family Office) panel — Referenced for NextGen members sharing what they wish prior generations had communicated
  • Carrie Hall — carrie.hall@ey.com
  • James Bly — james.bly@ey.com

Connections

Phase + Modules:

Milestones:

Concepts referenced:

Graph View