Family businesses, the backbone of the UAE economy, play a key role in the private sector. Their significance reflects their value and impact. However, despite their importance, many still face one main challenge: generational succession. This complex and often emotionally charged transition can either secure the future of a family business or threaten its survival.
A recent UK study found that over two-thirds of family business owners lack a succession plan. In the GCC, roughly 50% of family-owned businesses also do not have a clear plan for succession.
Succession planning and implementation in family businesses are shaped by a variety of internal and external factors and their complex dynamics. These include individual family members, groups of family members, current family leaders, future successors, and cultural and business influences.
Family business leaders often prioritize growing their business over planning for succession; they think the latter can be dealt with later.
Generational Change Is Emotionally Complex
In family businesses, personal relationships, cultural values, and emotional legacies are often closely linked. These factors make the transfer of family and business leadership a very sensitive process, often involving emotional challenges.
Family business founders often hesitate to give up control, even when the next generation is ready to take over. This reluctance stems from factors like emotional ties, fears about retirement, and worries about protecting their legacy.
Therefore, succession planning in family businesses is rarely merely a strategic exercise—it’s a family journey.
4 Key Highlights in Succession Planning
While there’s no one-size-fits-all method, here are four key elements that UAE-based family businesses should keep in mind when planning for generational change.
1. Succession is a lengthy process, not just a single event.
A successful transition rarely happens overnight. It unfolds over a period of time, months and years, especially in larger or more complex organizations. Effective succession requires time to:
- Identify the most suitable successor
- Groom the successor for his/her multifaceted leadership role
- Handover to the successor
2. Start Early
The planning phase starts early by deciding to initiate the succession process, agreeing on the process schedule, and beginning the agreed-upon process.
This early engagement ensures future leaders align with the business’s goals and family values, which is especially important in the UAE where family reputation is closely linked to business identity.
3. Open communication is essential.
In succession planning, open communication isn’t just important; it’s crucial. It helps clear up misunderstandings and ensures everyone’s perspectives are heard, which lowers the chances of conflict and division.
A major obstacle to succession planning is the absence of open communication. Many families avoid difficult conversations about leadership, equity sharing, or performance expectations—especially in cultures that strongly value hierarchy and respect for elders.
However, without communication, misunderstandings and misalignment can occur—risking conflict and fragmentation.
Regular family meetings led by external advisors, when necessary, can help uncover issues and make sure everyone feels heard. These advisors can offer objective insights, guide difficult conversations, and share best practices from their experience working with other family businesses.
4. Anticipate and Address Resistance
Research shows that more than 20 common resistance factors can block successful succession planning. These include:
- Founder’s fear of loss of identity
- Family disagreements
- Lack of clarity about roles
- Resistance from employees loyal to the outgoing leader.
When Is the Right Time to Transition Leadership?
There’s no one-size-fits-all “right time”. Here are some good indicators:
- The founder is nearing retirement age and is willing to initiate and support succession discussions.
- The second-generation family is actively involved in the business and demonstrates good knowledge, commitment, and leadership qualities.
- Operational governance structures are established in the family business, including a well-functioning board of directors.
Conclusion: Start the Succession Conversation Today
Succession planning is not just a business strategy—it’s a commitment to your family legacy. While emotions, culture, and family dynamics can complicate the process, avoiding the conversation puts everything at risk.
At Flairworks we help UAE family businesses navigate these transitions with discretion, empathy, and strategic clarity. Whether you’re just starting the discussion or already grooming the next generation, we can provide frameworks, tools, and governance systems tailored to your unique needs.
Contact us at info@flairadvisory.com or visit www.flairadvisory.com to learn how we can help your family business plan for a smooth and successful generational transition.