"The first generation builds it, the second uses it, the third ruins it," or another version familiar in family business circles is, "The first generation builds, the second fights, the third separates." These phrases sound harsh, but in reality, they reflect recurring patterns in Thai and international business communities over several decades.
We see many family businesses that start from the founder's hard work, sacrifice, and vision, but when reaching the generational transition, they face conflicts, lawsuits, business splits, or regrettable decline.
I, Theerapap Anyanuphap, as head of the family business consulting team at Aunyanuphap Consulting, have found that the "three-generation curse" does not occur because those families lack love or ability, but because they lack serious succession planning. Many elders build stable businesses yet fail to systematically transfer power, knowledge, opportunity, and ownership to the next generation.
Successors grow up without feeling the organization belongs to them, lacking decision-making space and a clear future path in the business. When it's time to hand over, what is missing is not just a "successor" but the readiness of the entire system.
Therefore, Succession Planning is like a secret sauce that helps family businesses grow wealthy and sustainable across generations.
Succession Planning is not about waiting, hoping for fate, or expecting a single heir to save the business when it falters. It is a systematic process to transfer family businesses, creating three key elements simultaneously: knowledge, ownership, and wealth for the next generation. Without preparation, successors face pressure without sufficient information, context, or authority, resulting in discomfort, insecurity, and reluctance to continue.
Importantly, good Succession Planning must happen while the business still has a future. If the business has no future, think simply: would you want to take over? Many families say, "We built it, why won't the children take over?"
But the more important questions are: Is the business worth taking over? Does it have growth potential? Are opportunities given for the new generation to demonstrate their capabilities? If the organization is still managed in a centralized way, waiting for elders to decide everything, and no chance is given to successors to prove themselves, the business becomes more a burden than an opportunity.
The first secret formula is Business Growth: a business that can be passed on. It must be a business with real growth potential. The family must dare to expand operations, adapt the business model, and continuously increase sales and net profit in ways aligned with
the industry's future, management capabilities, and the family's passion. No one wants to take over a shrinking business.
The second secret formula is Business Professionalism: family businesses must develop more professional internal organizations. Set clear operational structures blending professionals and family members appropriately. Use fair selection, evaluation, and compensation systems for all without exceptions. Avoid arbitrary bonuses. Clarity and transparency form the foundation of trust within the organization.
The third secret formula is Ownership Transition, which has two dimensions. The first is creating a sense of ownership starting from childhood through family activities, internships, or appropriate organizational involvement. The second is gradually transferring shares and ownership rights systematically through structures like a Family Holding Company and clear planning to prevent stock issues from causing future conflicts.
The fourth secret formula is Management Transition, which must be strategic. It is not about holding on until suddenly handing over everything at once. Families should create trial fields for the new generation, such as roles in Business Development, allowing them to explore new markets, opportunities, and approaches with clear budgets, authority, and delegation documents.
The fifth secret formula is Family Harmony because a family business cannot be sustainable if the family itself is not. Maintaining close relationships among members is as important as making profits. Tools like family activities, family constitutions, family retreats, or family foundations help create spaces for members to communicate and understand each other better.
The sixth and final secret formula is Wealth Expansion because the family's wealth should not rely solely on business income. The business is Active Wealth requiring effort and time, but long-term wealth comes from maintaining and growing wealth through investments outside the business, such as equities, bonds, real estate, or other assets according to the family's risk level, creating a strong wealth base to support members and the future.
Ultimately, Succession Planning will not truly happen if families see it simply as finding "someone to take over." It happens when the family views it as designing a shared future for the business, family, and assets. These six secret formulas are essential components to make succession real, encouraging successors to take over, elders to let go, and enabling family businesses to grow, prosper, and sustain, truly breaking the three-generation curse.