What the Odyssey teaches us about generational succession
The real hero of The Odyssey isn't Odysseus; it’s Telemachus, and every family business should know why....
Family business
Should your kids leave the family business before they lead?
Why encouraging the next generation to build something of their own may be the best way to prepare them to lead yours.
Rapid read:
- Encourage entrepreneurship before succession: Next-generation family business leaders who gain entrepreneurial experience outside the family firm are more likely to return, and do so with stronger leadership, ownership, innovation, and decision-making capabilities.
- Invest in entrepreneurial development: Succession planning should focus on building an entrepreneurial mindset through training, internships, job rotations, and opportunities to experiment and fail, not just formal education or early family business roles.
- Make the business worth coming back to: High-performing, dynamic family firms that offer autonomy, innovation, growth opportunities, and open succession conversations are far more likely to attract entrepreneurial successors back into leadership roles.
Family business owners are investing enormous amounts of time, money, and energy in preparing the next generation for leadership. Formal succession plans include formal education, philanthropic initiatives, structured work experience, incubator programs, and early involvement in the family business – exposing the next generation to the business they will one day take over and helping them develop the skills they need to make it happen.
But enterprising families are missing a trick – one that is quicker, cheaper, and a lot more effective at creating successors who can truly carry the business, and the family behind it, forward.
The key to succession isn’t to bring the next generation in as early as possible. Instead, encourage them to leave and embark on a journey of entrepreneurship outside the family ecosystem. We followed 8,274 potential successors in Sweden from 2001 to 2019 and found that those who gained entrepreneurial experience outside the family firm were more likely to take over the family business.
What’s more, they returned with a stronger ownership mindset, greater leadership ability, sharper financial acumen, and the strategic judgment needed to sustain the family business for another generation.
This unconventional take on succession comes with a twist: not every entrepreneurial journey leads home. For some, entrepreneurship is a stepping stone on the path to succession. For others, it is a detour that never leads back into the family business.
This article explores how business owners can encourage the next generation to gain entrepreneurial experience outside the family firm – and how to create a compelling reason for them to return.
Rather than looking at themselves as a business, entrepreneurial families need a new perspective.
How to encourage entrepreneurship
Our research demonstrates that early founder experience makes for better leadership. However, sending your children off to start a business without the skills to make it happen risks setting them up for failure and limiting the value the family can gain from the experience. It is imperative that you foster their entrepreneurial spirit and their capabilities before encouraging them to leave.
This is where investing in succession programs and structured educational opportunities remains essential. This does not mean simply sending the next generation to business school, placing them in junior roles within the firm, or inviting them to sit on the board. Instead, it means developing entrepreneurial capabilities through next-generation training programs, internships, and practical experience. Job rotation programs can also create opportunities for next-generation family members to develop entrepreneurial skills, experiment, and learn from failure.
Rather than looking at themselves as a business, entrepreneurial families need a new perspective. They should think in terms of an entrepreneurial family galaxy, where the business or businesses are planets that exist within an ecosystem, made of different kinds of organizations that the entrepreneurial families create to take care of their assets. This could be a family office to take care of financial assets, a foundation to take care of things like cultural philanthropy or family social impact, or even a family museum like many families are setting up in Europe today to take care of their historical or heritage assets.
It is this shift in mentality that creates the foundation of a robust, resilient, and future-looking organization – one that basks in creativity and innovation – and one that encourages entrepreneurship within each new generation.
Two roads diverged
This early entrepreneurial spirit readies the next generation to ‘go it alone’ on the outside, creating credible, self-directed career alternatives outside the firm. At the same time, it prepares potential successors for the ownership and leadership demands of the family business.
Potential successors who pursue entrepreneurship learn what it means to be ultimately accountable while acquiring and coordinating resources, building teams, managing stakeholders, and identifying opportunities – all competencies that are difficult to cultivate through conventional pre-succession routes. They also develop resilience, strategic judgment, and familiarity with novel technologies and products – entrepreneurship-specific capabilities that are becoming increasingly valuable as successors are charged with driving innovation and renewal while honoring continuity.
Enterprising families who encourage their children to leave before they lead will benefit from better firm performance and stronger leadership upon their return. Yet, it also creates a tension that could jeopardize everything.
The continuity of the family legacy depends on the involvement of the next generation. Yet, the more successful their entrepreneurial ventures become, the less likely potential successors may be to return home. Their willingness to join the business is shaped not only by emotional attachment and family obligation, but also by financial returns, personal fulfillment, autonomy, and reputational capital. Family businesses need to position themselves as an attractive opportunity that brings future successors back in, renewed, and ready to lead.
The objective is not to pressure children into joining the family business but to create clarity around what the future could look like.
Four ways to win them back
Drawing on 18 years of succession data from Sweden, our research identifies four ways to encourage entrepreneurial offspring to return.
Here are four ways to position the family business as an attractive career option, even when potential successors have abundant opportunities elsewhere.
- Build a business worth returning to: A high-performing family business signals a stable and potentially rewarding environment with higher economic returns and a lower risk of failure. It reduces the sacrifice associated with giving up independent career prospects and makes potential successors more likely to recommit to the family business. Similarly, a thriving family firm may offer greater legitimacy, reputational benefits, and influence than an external career. The stronger the business, the stronger the pull.
- Be dynamic (and open to change): Potential successors with entrepreneurial experience thrive in dynamic environments that allow for fast-paced change, technological progress, and ongoing competitive pressure. They seek innovation, autonomy, and professional growth. If the family firm is dynamic – and the family is open to this level of change – it signals that it has the resources, organizational slack, and credibility to support change initiatives or growth efforts. Returning should feel like an opportunity to build rather than simply preserve.
- Engage in difficult conversations: Parents and potential successors considering an entrepreneurial career benefit from engaging in open, balanced conversations about succession. These should focus on whether, why, and to what degree parents regard their children as suitable successors, and how appealing succession appears to them in turn. Future leaders should be transparent about their alternative career options and whether eventually redeploying their entrepreneurial capabilities in the family business might appear most meaningful to them. The objective is not to pressure children into joining the family business but to create clarity around what the future could look like and what needs to happen to achieve it.
- Shift your perspective: Families need to recognize entrepreneurial activity as a potential contribution to their own long-term vitality, even when it occurs outside the core business. Rather than viewing entrepreneurship as a departure from the family legacy, families should see it as a meaningful developmental path that expands the family’s entrepreneurial potential and may open future opportunities within or beyond the established firm.
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Succession planning has traditionally focused on formal education, structured career paths, and gradual involvement in the family business, often reinforced by early exposure to the interconnected family, business, and ownership systems through conversations around the dinner table. While these investments remain fundamental, they are no longer sufficient to prepare the next generation of leaders for an increasingly complex, uncertain, and rapidly changing world.
Entrepreneurial experience is a highly relevant but often overlooked developmental path for future family business successors. It develops a distinctive combination of ownership thinking, leadership capability, and innovation skills that prepare next-generation leaders for ownership and managerial responsibilities.
Entrepreneurial career moves outside the family firm should be seen as investments in the broader entrepreneurial potential of the business family, rather than as signs of detachment or rupture. In fact, our research demonstrates that those who leave are more likely to return to lead. When they do, they return with stronger leadership capabilities, a more developed ownership mindset, and greater entrepreneurial experience.
However, their return is not guaranteed, particularly when a venture has been highly successful and alternative opportunities outside the family firm are abundant. Family businesses must position themselves as a compelling and dynamic destination, offering growth, innovation, autonomy, and fulfilment alongside, of course, the ability to preserve, continue, and renew the family legacy for generations to come.
Read the full case here: Sieger P., Brinkerink J., Bau M., Karlsson J., De Massis A. (2026). Fly solo, then return home? Offspring’s entrepreneurship experience and their future as family business successors. Journal of Management Studies.
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