Three steps to a successful generational transition

Twenty-five percent of leaders in Italian family businesses are over 70 years old and that percentage is rising. Meanwhile, those under 50 make up just 15%, and the trend is declining.

With these figures, Carlo Salvato, Professor of Corporate Strategy at SDA Bocconi School of Management and Bocconi University, highlighted the growing relevance of generational transition for Italy’s family firms and opened the first 2025 event of the “Idee per la Crescita” (Ideas for Growth) series, organized in partnership between the weekly magazine Affari&Finanza by Repubblica and SDA Bocconi.

Research shows that companies undergoing a generational transition tend to improve their performance on average, but the outcome depends on several specific factors. “We must remember that generational transition,” Professor Salvato said, “is not a one-time event but a process that must be carefully planned.”

That process can be broken down into at least three stages, each with its own challenges:

• Identifying and preparing successors. Common pitfalls at this stage include a lack of interest or inadequacy on the part of the next generation. A lack of motivation, or the presence of the wrong kind of motivation, not aligned with the long-term growth of the business, can prove dangerous. Successors most likely to improve company performance are those with at least a master’s degree and with work experience outside the family business and abroad.

• Entering the company. Here, the risk is that entry is governed by family logic rather than business logic. Next-gen members should take on roles that the company actually needs, not positions created just for them. Ideally, they should report to non-family managers and have their performance objectively assessed. The presence of shared principles or, better yet, formal agreements, on how to manage the transition process can reduce the risk of internal conflict.

• Intergenerational coexistence. Senior family managers must overcome their reluctance to delegate authority to the next generation and avoid nepotistic behavior, especially as the number of heirs grows. If they fail to do so, only the least capable successors may end up staying in the business. The process tends to be more effective in companies with modern governance structures, such as those with a board of directors rather than a sole administrator, and which include under-40s, women, and non-family board members.

The event, moderated by la Repubblica Deputy Editor and Affari&Finanza Editor Walter Galbiati, featured contributions from Silvia Rimoldi, Partner at KPMG and Head of Family Business; Angelo Taffurelli, Head of Wealth Advisory at BPER Banca Private Cesare Conti; and Marco Mandelli, Chief Corporate and Investment Banking Officer at BPER Banca.

The full event is available (in Italian) in streaming on the Repubblica website: https://www.repubblica.it/dossier/economia/affari-e-finanza-idee-per-la-crescita/

SDA Bocconi School of Management 

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