Rebecca Archer
Welcome back to Beyond the Numbers with Grant Thornton – a podcast unpacking marketplaces shifts in today’s dynamic business landscape.
I’m Rebecca Archer, and today I’m joined by National Head of Family Business Consulting Kirsten Taylor-Martin and Accredited Advisor Heather Gouveia.
Grant Thornton recently released their 2025 Family Business report, exploring key challenges, opportunities and changes for Australian Family businesses. With an ageing population and up to four generations within the workforce, the next steps for family businesses are about empowering the rising generation, fostering generational collaboration, which can lead to innovation, productivity and long-term success.
But succession planning and handing over the business doesn’t necessarily mean retirement for the incumbent generation. So, how can Australian family businesses design their workplace where generations can work alongside each other to collaborate and continue to grow the family business for generations to come?
Welcome Kirsten & Heather!
Kirsten Taylor-Martin
Thank you for having us.
Heather Gouveia
Nice to be here, Rebecca.
Rebecca Archer
Okay, so first off, tell me about your survey.
Kirsten Taylor-Martin
The purpose of our survey was to gain a really good understanding on how we can support the rising gen to lead family businesses. So, this survey was a little bit different to ones we've done in the past in the sense that we interviewed both the incumbent generation and the rising gen to get their perspectives on different questions, and we got some quite interesting results, and we look forward to discussing them further with you today.
Rebecca Archer
Right now, what are the top five challenges for Australian family businesses according to your report?
Kirsten Taylor-Martin
Yes. So, the survey results I'm going to go through for both the incumbent and the rising gen together. Coming in at number five was reduced sales due to cost of living. With the current economic climate, I can understand that, coming in at number five; number four was cash flow issues. Number three was attracting and retaining staff, which is interesting because our survey in 2023, that was the number one challenge that family businesses were experiencing, so it's come down to number three; number two was economic uncertainty, and coming in at number one is succession planning.
Now, succession planning was number three a couple of years ago, but as we start to go through the different responses from the rising gen and the incumbent generation, it's going to become quite clear that succession planning is what's keeping family businesses awake at the moment.
Rebecca Archer
It's interesting, isn't it? Because I know succession planning came up in the last survey and it seems to sort of be that common thread that's travelling through for family businesses. I guess, from your experience, are you able to give us some insights into why you think this is an issue?
Heather Gouveia
Safe to say that we always anticipate for succession planning first of all to be one of the most challenging issues for families in business together. So, Rebecca, there are no surprises really from the results from our most recent survey. What we find is that as businesses evolve, families grow, more people are involved – succession can actually be really complex and it's just a very common challenge for family businesses.
At its core, I guess you would say that succession is about understanding and managing change. You know, new leadership, new governance, often a new ownership model and what that might look like and how that might be funded, and it often forces families to have some conversations that may feel really uncomfortable and for some quite confronting.
Something else too, Rebecca, is that there is…there's often a common misconception that succession planning is only associated with retirement planning and the conversation can be deferred until that time. No need to think about that now. I think when succession is planned, yes, it often involves the incumbent generation retiring or transitioning to retirement. However, life doesn't always go as planned and we've worked with a number of businesses where succession has taken them by surprise and has come actually as an unplanned event.
You know, whether that's a health issue of a key family member, it might be an accident or even the death of a family member. You know, just the other day I had a call from a client who unfortunately have had to take a step away from the business because of health issues and unexpected health problem that they're facing, but for that business, they do have some good plans in place.
So, it's just an interim measure that they've got some plans in place so the business can keep rolling on and they can focus their attention on the family matters for the time being and not have to be distracted by the business as well.
So, for this reason, I think succession should always be on the agenda for a family business. The earlier the conversation the better and the longer the time you allow, the more hurdles you can overcome.
Kirsten Taylor-Martin
So, leading on from that, we have a FREEDOM framework which is our seven hurdles that families need to overcome for a very successful succession plan, and as Heather is saying, you need the time to be able to make sure that you have covered off on every single hurdle.
So, the one that we're seeing at the moment that is causing a lot of problems for families is the first hurdle – so, ‘F’ is financial security. So, what we're finding is families are having all their money inside the business and they haven't actually put anything aside for them to be able to step away from the business, and this puts so much pressure on the business because then it means that it needs to be remunerating two generations worth of family members – some of them may not be working in the business, may not be contributing to the, to the profit of the business. So, it's an extra pressure that just didn't need to be there.
So, if we just can break down and understand that succession is not about retirement. It's a long process. If you actually allow the time, you can bring in dividend strategies, superannuation strategies – there's so many different things you can bring into play to enable that incumbent generation to have sufficient wealth outside of the business to set that business up for success, and we do see generate the next generation might want to grow the business to sell, but you've put so much pressure because it's paying all these extra salaries for family members not even working in that business.
The other thing that we're really seeing – so there's three big challenges that we're seeing that is creating this succession planning, I guess, problem – but the incumbent generation, they don't know what they're going to do. So, we do have a lot of that can be in the incumbent generation – they can be 80 years of age. They do not want to retire, so they don't want to pass the baton. They don't want to have a conversation about succession planning, but the thing is, you don't need to step out of the business. It's actually a really great opportunity, and families that do it well, they enable the person to either go back to what they originally loved or to run strategic projects for the business. So, they're still there and they're supporting the rising gen in the leadership role. They just don't have that leadership role anymore, and this will enable them to – if they want to work four days a week – start to have longer weekends and start to have a bit more balance in life, it enables them to do that as well.
So, succession doesn't mean retirement and it doesn't mean you have to step out of the business, and I think if people can stop framing it that way, we can start conversations way earlier.
Rebecca Archer
Now when it came to challenges in your survey, did you see a particular difference between the incumbent generation and the rising generation?
Heather Gouveia
Yes, we did. So, the incumbent generation, they were more focused on business challenges, things like attracting and retaining staff, cash flow issues and economic uncertainty, and I guess not surprising given the economic landscape that we have all been faced with over the last 12 to 18 months.
Whereas, interestingly enough, the rising generation, they were more focused on family dynamics and challenging family relationships. So a really interesting observation – for the rising generation, perhaps that their concern comes as a result of potentially a lack of communication, a lack of governance in their family business. Perhaps it's unclear where their role is at the moment, how it's going to transition and what their future is going to look like.
Kirsten Taylor-Martin
So, there's a few interesting statistics that relate to these differences as well. So, the rising generation are very aware that they need to learn more about the business. So that was really positive to see. So, the number one area they want to learn more about is the value drivers of business.
Heather Gouveia
And Kirsten, that was such a pleasing result to see that the rising generation move beyond their operational management, where we usually see the rising generation come through, and to see that they see the need to shift to a strategic focus and to understand the drivers of value of a business, focusing not only on improving profitability, but also turning their minds to other things, like, you know, how do you integrate your marketing strategy into your growth strategy? You know, should we be expanding product lines and distribution channels, looking at whether there's any customer centricity and reliance on owners? So that was really pleasing to see, I think.
Kirsten Taylor-Martin
And further to that, Heather, what was also interesting was we asked questions in a 2021 survey and we were very keen to see has the pendulum swung? So have we. With all the talk we've been doing with family business, the insights, the work we've been doing, have we seen an improvement of where we were in 2021?
So, it was good to see there was an improvement in the governance space, but what was quite interesting, and it goes back to focusing on family versus business, but in 2021, 56 per cent of family businesses had a strategic plan, but in 2025, only 50 per cent had a strategic business plan. So, one, that's really concerning. Number two, what can be a problem, and you need to be careful in a family business, between family governance and the strategic plan. We have got a situation recently where we started working on a strategic plan with a family business, but they hadn't worked on their family governance. So, every initiative they're trying to do family matters are actually getting in the way and stopping it from strategically moving forward.
So, it's good more is happening with family governance because if we can actually have a framework and have family matters discussed in a family meeting, allowing the business to focus on the business, it will set us up for more success with strategic plans in the business. So, I am hoping that this pendulum has gone a little bit backwards to go a long way forward, but it is concerning that only 50 per cent of family businesses have a strategic business plan in place.
Rebecca Archer
And when we look at the phrase rising generation, what's the age bracket? What did you find?
Heather Gouveia
So, we anticipated that the majority of the rising generation age bracket would be around 25 to 40 years of age, and that was exactly the outcome. So, no surprises there. However, what we were surprised with is that over 31 per cent of the rising generation were actually over 45 and 10 per cent were actually over 55.
Kirsten Taylor-Martin
We have a real ‘Prince Charles in waiting’ sort of scenario happening here in Australia, and I do talk a bit about the Royal Family, but anyone who's watched The Crown, there was a really interesting scene where Prince Charles was trying to convince the Prime Minister that his mother had lost touch with the people, and when you look at the ages here, it really does feel and resonate like is that what's happening here in Australia.
Now, if you think of people that are over 55 years of age, as much as the incumbent generation might be 80 and don't want to speak about retirement, one thing you do find with the rising gen is they have a much better understanding of life-business balance.
So, at 55 years of age, they actually probably do have a retirement plan. They probably want to step away from the business. So, a lot of the things we're talking about and challenging family matters and succession being really high issues, you can really start to understand when you've got 55-year-olds that are still in that rising gen position.
Rebecca Archer
It's so interesting, I think, how it reflects the different sort of personalities of different generations. It's great to see that reflected in the survey.
Kirsten Taylor-Martin
Absolutely, and what we are seeing at the moment is with an aging population, we're seeing up to three, three generations working in the one business at the one point in time and four generations alive. So, everything Heather and I are talking about at the moment and we're talking about two generations, but this is just going to continue to escalate as we have an aging population because you're going to have three, four generations working together
Rebecca Archer
And there'll be all the complexities that come with that as the generations hash out what they perhaps don't love about each other's generations. So, talk to us about the difference in other responses between the generations.
Heather Gouveia
Let's start with AI. I think always a topic of conversation at the moment. So, what we saw was 18 per cent of our respondents in the incumbent generation saw AI as a challenge. This actually surprised me. I thought that there would be more of the older generation that would see AI as a threat, and interesting, the respondents from the incumbent generation that did find it as a challenge were predominantly in professional services and finance industries.
In comparison, there was only one respondent from the rising generation that saw AI as a challenge. So, I don't know, perhaps the rising generation only see AI as an opportunity. They don't see it as a challenge or a threat and are more potentially willing to embrace the change that AI is definitely going to bring over the next couple of years.
Kirsten Taylor-Martin
I think this result of all the results is going to create really great conversation because it's one thing to see the statistics, but what do they mean in business? And I've already started to sort of bounce it off a few businesses to get their understanding of what does this say to you? But I think there's a big question around, is AI going to cause a disruption that the rising gen have never seen before? And the incumbent generation are very aware of. Are the incumbent generation fearful of the AI?
The other thing that's sort of interesting, which ties back to our previous question is, the rising gen includes people, you know, over 55 years of age, but they didn't see it as a challenge. So, at what age is it?
And to Heather's point, is it more the industry they're in rather than the age that they are? But I did bounce it off my 19-year-old, my own rising gen, and yeah, he said he would never use AI and challenge in the same sentence. He just thinks AI is the greatest opportunity he has ever seen. So much to Heather's point, this is going to be a great one to discuss with family businesses to see how do they see AI in their business.
Rebecca Archer
What are some of the things that family businesses are doing to really showcase the rising generation? Did you sort of unearth anything interesting there?
Heather Gouveia
Yes, we see some family businesses that we work with really wanting to encourage the rising generation into their next role in leadership and to set them up for success. What we see with some of the clients that we work with, how they've gone about that is actually introducing some of the rising generation to attend some of their board meetings or family council meetings initially just to observe or perhaps sometimes they might give them a challenge and get them to come and present at the meetings, and sometimes as early as the age of 18 years old, which brings great learning experience for that rising generation to come through, for them to understand how a meeting should be held, you know, what topics are discussed, what's particularly important for their family business, and also for them to watch how family members interact and solve problems together. So, that's one way that I think is a great way of preparing that rising generation for leadership.
We also have some clients that have separate rising generation meetings to board meetings. So, they have kind of like a separate advisory board where the rising generation might be given a particular issue or a problem to solve for their business. So, they get the rising generation together to meet together and to work together on how to solve that and present it back to the board. So great way to introduce them, encourage teamwork and decision making because they are the future. I think, you know, mentoring is key to preparing the next generation for their success in leadership.
Another thing too that I think is really important in preparing the rising generation for leadership is, is financial acumen training courses – just a great way for them to be introduced to different topics, broaden their skill set and broaden their way of thinking as well. Sometimes you don't know what you don't know, so that's another good way, and also at those training courses to network with other people too, I think is really good way that we've seen success.
Kirsten Taylor-Martin
We've also seen families introduce entry rules. So that might mean what qualifications or what experience some families like their family members to travel before they come back into the family business, but just setting the criteria of what the expectations are should they ever want to come back into the business. A lot of family businesses want the person to apply for a role and to be the best candidate before they'll take them on. They don't just get the role because they are a family member. We've also seen really great initiatives done by different family businesses. So, they might be a brand ambassador or required to attend different PR events for the family. So they're probably are receiving some sort of financial reward, but putting some level of responsibility and ownership and an understanding that you're part of this family business and you need to support us in these different initiatives.
One thing that we really do love seeing and some family businesses just do it so well, and I have written an insight on this, but we call it like ‘gamification’, but where they enable the next generation to have a smaller pot of money, an amount that the family is happy or willing to lose for them to learn, and they might enable them, as Heather said, sometimes the rising gen will have their own meeting where they get together and they get given a project.
So, we've seen families where they'll be given an investment pool of funds that they can go and invest it themselves. It does bring out a bit of the competitive spirit within family members and they'll want to compete and get a better return than what their parents are. We've seen property development where they enable one of their children to run a small development so that they can learn what you need to learn along the way before they come in to be like CEO of the really large developments they're doing.
There are a few wine companies that have done it quite well and enabled the younger generation to have their own wine label and to be able to market it the way that they want to market it. It's usually got its own sort of website because you'll find that the family brand will be quite mature, and a mature audience and the younger generation are trying to attract really young people in to get their wines.
But it's another really great way where you're giving them an opportunity to, to learn, but on a. On a smaller scale before they come into the family business.
Rebecca Archer
I want to look ahead a little bit now and ask you what do you want to see from survey results in the next three to five years? What sort of areas of change or potential for growth would you be hoping to observe?
Heather Gouveia
A few that I might touch on. I mean, I would love to see a positive swing in family governance for not only family businesses to put in place some formal family governance documentation, but actually use it on the day to day understand the rules of their business, how decisions are made, you know, the definition of their roles and responsibilities and remuneration. It would be great to see them actually putting that governance into action – definitely that.
And also, we want family businesses to see there are people who can assist them with succession. I think that's really important too. Succession, as we've already spoken about, can be complex at times and. And to have an external party to navigate some of those conversations and to chair meetings and to put together a framework on what the way the way forward looks like.
And definitely also we want to see an understanding of the importance of a strategic business plan.
Rebecca Archer
So was there anything that the survey didn't explore that you'd like to see covered in the future.
Kirsten Taylor-Martin
I think AI really showcased us. We didn't quite ask all of the questions we probably should have asked. So, we did ask the family businesses what challenges they saw ahead. Next time, I'd really like to ask them about what opportunities they think lay ahead, just to really see the, I guess, the positive light and what, what they're looking forward to and where they see their business going in the future.
Another area, and it was good that we had ‘other’ and we enabled people to put comments, the comment that came through quite regularly was in particular to agricultural businesses. So, what we didn't list as a challenge is the weather, and that is their biggest challenge that they have, and if you look at Australia at the moment, you have got South Australia that has been in drought. Northern New South Wales has had floods this year. So, it was just really an area that thankfully it came out in ‘ other’, but I think it's an area that we need to include that as challenges because it was probably the number one challenge for agricultural businesses.
Rebecca Archer
This might be a bit of a tricky question, but talk to us about the ideal future state. What does that look like?
Kirsten Taylor-Martin
Well, I guess for our survey, what we really want is we want family businesses to understand that there are people out there who understand what they're going through and who can assist them.
So, what you often find is being in a family business, it can feel very lonely. It can feel that it's only your family that's having the problems. People don't really want to discuss it with other people because they feel like, what have we done that's wrong? So, what we're really trying to get people to understand is these sorts of matters happen in everyone's family business. It's not just yours; there's nothing that's going wrong, and the more generations that come into these businesses, the more challenges that are going to lie ahead.
So, we just want people to understand, reach out, there are people that can assist, that are going to listen, are going to understand and have frameworks that actually do work and can help you overcome whatever issues your family is currently facing to enable your business to prosper. And the most important thing to every family is they want to be able to celebrate all those really important occasions together as a family and not have the problems that they're currently seeing get in the way of that.
Rebecca Archer
And just finally, what are some takeaways that you'd like people to learn from? The report findings and the state of play for Australian family businesses.
Heather Gouveia
Two takeaways – important takeaways. I think firstly how challenging and important succession planning is. If you haven't already, start the conversation today, the earlier the better to move forward. You know, you've got to keep looking to the future and what that might look like and have a plan in place, and also, to remember with succession planning is by including a family business advisor it can take some of the complexity away in terms of having an independent party who can navigate discussions, take away some of that emotion, I guess, that can happen at times and guide the family forward with the right framework.
Second thing too is the importance of education for the rising generation. Setting them up for success and exposing them to different issues and to foster that strategic mindset which is necessary because they are the future.
Kirsten Taylor-Martin
So, my first key takeaway is aligned with Heather's because it is a hard conversation to have, and what it does enable with having an independent facilitator have in the conversation is it enables us to ask the question of what does good look like?
The best time for us to have these conversations is when the family doesn't have any problems and they can start to think about what they want the future to look like. I'm going to go back to the Royal Family again, but before Harry and Meghan decided they wanted to leave the family business, there would have been a real opportunity for an independent facilitator ask what would good look like if someone wants to leave the family business? That would have enabled them to have all of the conversations to put everything on the table.
So, there's very clear understanding of from a both a Harry and a Meghan perspective, but the rest of the family members, if someone says they want to leave, this is what it's going to look like and that enables you to continue to have the good family relations as well.
By having these conversations early before someone's asked to leave the business – it’s not personal – it’s really just talking about different scenarios and it is okay for family members to want to leave, but it's good to have that conversation about what does good look like?
The second thing – we keep saying family governance and it's really important to understand what is the difference between a family charter or a family rule book and a shareholders agreement. So, a family charter, it's not binding, it's not a legal documentation. So, when we talk family governance we're really talking about the process and it's a matter of the family coming together, agreeing on rules and frameworks that they want to be their guidelines in in going forward, and it's those discussions that they have that are going to add the true value.
A shareholder’s agreement is legal documentation. It defines the shareholders rights, their obligations, the rules to transfer a share within a company. So, when we are talking about family governance, we're not talking about binding legal documentation. It could result in that.
But the first starting point is having really good, robust conversations to discuss the guidelines that you want for your family and going forward.
Rebecca Archer
Kirsten and Heather, thank you so much for making the time to come onto the podcast. For those people listening who would like to connect and maybe delve deeper into your work or potentially explore ways that you could even assist them, what's the best way for them to reach out?
Kirsten Taylor-Martin
Look, there's a few ways definitely follow us on LinkedIn. We'll be sharing the full survey report but also a lot of insight surrounding it, but feel free to contact Heather or myself directly at any point of time. We also have a lot of insights and material on the Grant Thornton Australia website as well.
Rebecca Archer
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