Generational Transition in Family Businesses

In family businesses, the transition from one generation to the next is one of the most critical turning points, both emotionally and strategically. On one side, there is a founder or current generation (NowGen) who has devoted years of effort to building the business and whose life has been shaped around it. On the other hand, the younger generation (NextGen) is expected to take over this legacy.

Throughout nearly a quarter-century of consulting experience across different sectors and numerous family businesses, Orhan Erkut has repeatedly encountered the same question:

“For the future of our company, to which role and how should we prepare our children?”

The traditional approach often looks like this:

  • Taking the children to the company from a young age,
  • Having them do short-term internships in various departments,
  • Entrusting them to a trusted professional with a “they’re yours to shape” mindset.

The good intentions behind these efforts are unquestionable. However, a changing world, growing business scales, increasingly complex ownership structures, and the need for corporate governance show that these methods are no longer sufficient on their own. When every family, every ownership structure, every sector, and every young person is different, it is unrealistic to expect a healthy generational transition through a “one-size-fits-all” method.

Orhan Erkut approaches generational transitions in family businesses through three key concepts: strategic, trustworthy, and transformative.

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Strategic

Because the real issue is not just who will take which title, but how the company’s legacy and culture will be carried forward over the next ten to twenty years.

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Trustworthy

Without a transparent, fair, and reliable framework for both the older generation and the younger members of the family throughout the process, a healthy transition is not possible.

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Transformative

Because a well-designed generational transition does more than transfer ownership; it elevates the company’s management, decision-making, and relationship culture to a higher level.

Family Businesses Are Not All the Same

Orhan Erkut’s field observations show that when we talk about a “family business,” we are not referring to a single, standard structure.

  • Companies founded by a single entrepreneur and later transferred to their children,
  • Businesses started by two or three partners that, by the second or third generation, evolve into cousin partnerships,
  • Structures where the family remains highly active but professional management also carries significant weight…

Each of these looks different:

  • The family culture is different,
  • The ownership structure is different,
  • Individual goals and expectations are different,
  • The sector’s dynamics and risk profile are different.

Therefore, when it comes to generational transition, what is needed is not a standard prescription but a framework tailored to each family. In designing this framework, Orhan Erkut also draws on the academic literature he has studied for many years. When examining family businesses and successor preparation studies written since the 1960s, and reviewing both successful and unsuccessful cases, he sees the same common pattern:

Most families start looking for solutions only after the problem has already emerged. Yet the real need is for an early, structured approach before the problem surfaces.

The Communication Axis: Bringing the Current and Next Generation to the Same Table

For Orhan Erkut, communication lies at the heart of generational transition. In many cases, he has seen over the years, the distance between generations is fueled by two main factors:

  • The difference in perspectives brought by the age gap,
  • The meanings and barriers imposed by family relationships.

One generation has built the business and wealth through heavy, hard work; the other has been born into that wealth and sees the world from a completely different vantage point. When there is no structure that brings these two perspectives onto common ground, generational transition is often either postponed or takes place amid crises.

In both his consulting projects and his one-on-one work with families, Orhan Erkut does not see generational transition as “selecting one person,” but as two generations embarking on a shared development journey. For this reason, his focus is on:

  • Making the current generation’s knowledge, experience, and values visible and transferable at an early stage,
  • Systematically understanding the interests, talents, and potential of the younger generation,
  • Creating a transparent and respectful space where both sides can speak within the same framework.

SPALDA Academy: Two Generations, One Shared Journey

Until 2018, Orhan Erkut focused on observing the field through consulting projects and building experience. From 2018 onward, generational transition in family businesses—both in theory and in practice—became one of the main pillars of his work agenda, and he focused on developing a robust, sustainable solution in this area.

Within this framework, he began systematically reviewing academic studies written since the 1960s. He examined successful and unsuccessful implementations and compared examples from different countries. This reading and analysis process is not a one-off—it is an ongoing effort that continues to be enriched with new publications and real-life cases. He evaluated his findings together with his field experience, noting what works and what cannot be sustained in the long term, and turned this into a model design. He shared these ideas with the families he worked with, discussed them, and refined them based on field feedback.

From 2022 onward, this accumulated knowledge took shape as a concrete program, SPALDA Academy, and began to be implemented. Unlike other trainings and programs that address generational transition in family businesses, SPALDA is a purpose-built, original model designed entirely for this goal. It can be implemented both as programs that support the development of all generations in large families and as structures involving fewer young people.

NextGen—the next shareholder generation—is at the heart of SPALDA. For each family, the current structure is first assessed alongside the ages, education, and experience levels of the young people, as well as the family’s expectations for the future. Based on this, a program tailored to that family and those young people—and designed to open up pathways for them—is created. In some families, this becomes a comprehensive academy model involving multiple young people from the same generation; in others, smaller and more flexible programs are preferred. In designing and updating the program, both new findings from the academic literature and lessons learned from field experience are taken into account.

SPALDA is the embodied model of this perspective on generational transition in family businesses:

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For each family, a personalised development path is defined. Rather than a one-size-fits-all approach, an individualised roadmap is created for each young person, tailored to their unique interests, capabilities, and potential.

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Generational transition is not only about “training future executives”; it aims to develop a sense of responsible ownership / stewardship at an early age. Young people are raised not just by being involved in the business but by understanding and visibly assuming the responsibilities that come with ownership.

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The program also provides an “observation space” for the older generation. It allows them to see, in a systematic and transparent way, what young people do across different settings and roles, and where they are growing stronger or facing difficulties.

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Experiences inside and outside the company, project work, and mentoring processes are carried out within a framework that the family can also follow. In this way, development is not limited to the young person and the mentor; it becomes a process that builds trust for the family as well.

Today, SPALDA Academy operates within an ecosystem of over 100 people, including independent assessors, mentors, and experts from diverse disciplines. As this ecosystem grows over time, the program continues to develop and be refined in light of new needs, feedback, and current research.

Next Generation (NextGen) Individual Mentoring

Not every family has a young generation group large enough to run a full SPALDA Academy program. Sometimes there is a single young shareholder, sometimes a single child, or someone the family sees as “closest to this role.” In some cases, even when the young person has graduated from university, reached their 30s, and is preparing to assume responsibility at a board level, they may still not feel fully ready.

In such situations, Orhan Erkut works through NextGen Individual Mentoring. In this work:

  • The picture of the family and the company,
  • The young person’s age, educational background, and experience,
  • How they see themselves, what they want to achieve, and in which areas they struggle

are all considered together. A personalised development framework is then created.

The aim is not only for the young person to have “been exposed to” certain roles in the company, but also to, just as in SPALDA Academy, gradually build a foundation on which they can see themselves as a responsible shareholder and leader who can take a role at the board level in the future.

In this mentoring process, Orhan Erkut:

  • Holds regular one-on-one meetings with the young person,
  • Designs a development path based on projects, readings, and relevant interactions,
  • When needed, introduce them to networks and experts that will enrich them and broaden their perspective.

In some cases, the family prefers to discuss the matter with Orhan Erkut first, independently of the young person. At other times, the young person wants to see their own roadmap before talking through all the details with the family. NextGen Individual Mentoring offers a flexible structure that takes these sensitivities into account, with its pace and scope defined jointly.

Preparation Mentoring for the Current Generation (NowGen): Retirement and Role Transition

When talking about generational transition, it is natural for the focus to shift mostly to NextGen. However, Orhan Erkut’s field observations make one thing very clear: if the current generation does not plan “what they will do after letting go,” it becomes very difficult to complete the transition in a healthy way.

Today, many business leaders who say, “I’m not thinking about retirement yet, I still have 10–15 years,” do not actually plan what kind of life they will build once they step back from the business. They leave the process to its “natural flow” without considering where, with whom, and how they will spend their time. This creates uncertainty both in their inner world and within the family and the company.

For this reason, in recent years, Orhan Erkut has been working particularly with leaders of the current generation—owners and active shareholders—through mentoring programs focused on preparing for retirement and role transition. In these engagements, they discuss and structure:

  • When and how they would like to step back,
  • What kind of balance do they want to establish in their lives after handing over responsibilities?
  • Which investments, projects, or social domains would be enriching and meaningful for them?
  • How the boundaries and expectations will be defined once they move into an “observer” role in the company.

This mentoring also supports the work carried out with NextGen and helps clear the way for them. A NowGen who has planned their future role, time, and presence can manage the transition on a much calmer, fairer, and more predictable footing—both internally and within the family.

Why focus on “raising a generation” rather than “choosing an heir”?

Orhan Erkut highlights that true success in family businesses depends not on choosing an heir, but on shaping the next generation into leaders capable of overseeing all the company’s assets and preparing their own successors.

This perspective aims to develop young people as leaders. They should be:

  • Not merely managers who take over a single department,
  • But leaders who can see the company and the family wealth as a whole,
  • Able to think at the board level,
  • Able to build healthy relationships both with professionals and with family members,
  • And capable of raising their own children in the future with the same sense of responsibility.

For this reason, generational transition is not, for Orhan Erkut, a simple “change of guard,” but a strategic, reliable, transformative investment that extends across generations.

When designed correctly:

  • Internal family tensions decrease,
  • Young people find a fair ground on which they can prove themselves,
  • The company’s institutional memory and culture are carried forward, enriched by the perspective of the next generation,
  • And solid foundations are laid for the next generational transition as well.

Which Approach Fits Which Situation?

Consider which of these tailored approaches best matches your family’s current needs, and take the first step in your generational transition journey with Orhan Erkut.

  • If your family has more than one next-generation member and you want to prepare them for the future together through a structured program, SPALDA Academy may be the right framework.
  • If you have a single young shareholder or only one child who is ready for this process, and you would like to design a one-to-one, flexible, personalised journey with them, NextGen Individual Mentoring would be a better fit.
  • If, as the current leader, you wish to clarify questions such as what to do after stepping back or how to redefine your relationship with the business, NowGen Mentoring for Retirement and Role Transition can help make this process more manageable and planned. Reach out today to ensure a smooth, thoughtful transition for both yourself and your business.