5 traits that make a great third-generation family business leader

In my work as a family business consultant, one of the biggest challenges I encounter in succession planning is navigating the inevitable tension that arises when leadership transitions from one generation to the next — particularly in companies moving from Gen 2 to Gen 3.

In a family business setting, the next generation faces an uphill battle; they must prove themselves to their family, the team and most importantly, themselves. The main issue is often the differences in the path each generation took to get to the top. Many Gen 2 Baby Boomer leaders often worked with their parents who founded the business. They grew up in it — learning “on the job” from a young age.

But two generations of success in the family business often means that Gen 3 have had a formal education outside of the business. This can be a positive, but new ideas and new ways of doing things can often clash with the existing leadership. For Gen 3 this can lead to feelings of self-doubt about their ability to do the job the way their grandparents and parents did and the way they are perceived by the team, which can fester to the point of self-sabotage.