Harvard Business Review LogoAugust 11, 2026Victor Torres/StocksyFamily businesses often fail to prepare the next generation for their most important role—not as executives, but as owners. As a result, families can gradually lose the ability to direct theWhen the patriarch of a third-generation media company* died suddenly, the family believed the business was secure. The patriarch had built a fledgling operation started by his father into one of the largest privately-held newspaper empires in the country. Revenues were strong. A $1 billion valuation was within reach. His five adult children, all talented in their own fields but lacking closeness after a lifetime of competing for their father’s affection, joined the board determined to protect what he had created.
Why Family Businesses Lose Control
Family businesses often fail to prepare the next generation for their most important role—not as executives, but as owners. As a result, families can gradually lose the ability to direct the enterprise, not because of a single crisis but because ownership capability erodes across generations through predictable governance and succession mistakes. To preserve long-term control, family businesses must deliberately develop owners who can exercise sound judgment, govern effectively, and hold management accountable.
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