70% of family businesses fail during the transition from the first to the second generation. This startling statistic inspired students of the Mastering Family Businesses course at CATÓLICA-LISBON to create the first Founders Forum. Its purpose? To explore solutions that reduce the failure rate of family businesses and ensure their longevity.
Thanks to its relevance, the CATÓLICA-LISBON FOUNDERS FORUM successfully brought together business leaders, academics, and students on November 22 for an in-depth dialogue about the challenges and opportunities family businesses face.
In his opening remarks, Filipe Santos, Dean of CATÓLICA-LISBON, highlighted the importance of the topic: "We do not talk enough about family businesses in Portugal. Family businesses account for about 75% of all companies in Portugal and Europe, contribute approximately half of the added value to the economy, and generate around 30–40% of jobs, which is roughly half of all employment." Filipe Santos further emphasized: "Family businesses are essential agents of social and economic progress, playing a fundamental role in the regional and geographic development of the country."
First Things First: Why Is Succession So Challenging?
Discussions during the morning panels made one thing clear: succession is often marked by conflict, lack of preparation, and an absence of strategic planning.
Liliana Dinis, professor of the Mastering Family Businesses course at CATÓLICA-LISBON, noted: “Many times, the next generation is not ready to take over because no capacity-building plan has been defined for potential successors, nor has a succession plan been put in place.”
There was no doubt among the various panels held throughout the morning: succession is often a process marked by conflict, lack of preparation, and the absence of strategic planning.
Liliana Dinis, professor of the Mastering Family Businesses course at CATÓLICA-LISBON, believes: “Often, the next generation is not prepared to take over because no capacity-building plan for potential successors has been defined, nor has a succession plan.” She explained the main reason behind the difficulty of this critical process: “For founders, talking about what will happen after they are gone means confronting their own mortality. And that is far from easy.”
What happens when no succession or capacity-building plan exists? “Only financial succession is planned,” revealed Liliana Dinis, surprising the audience with the insight that, on average, after receiving an inheritance, the new generation takes about 19 days to purchase a new car. “This means that the new generation is unprepared to handle this wealth. And they are unprepared because they were not trained for it. The next generation needs to know the company’s path and legacy. It is essential to ensure they are aligned and have all the resources to carve out a path of continuity, even if this involves external professionals to manage the business.”
For João Rodrigues Pena, Founder & Managing Partner of ARBORIS, there is another factor contributing to the challenge of succession: “Often, merit is not given the importance it deserves, as founders focus exclusively on their children. The key is to involve the whole family in the process and ensure that the successor has the skills, vision, and above all, the ‘calling’ to lead.”
This view is shared by Liliana Dinis, who pointed out: “We are still focused on bloodlines” when choosing successors for family businesses. She used Japan as an example, a country with some of the oldest family businesses on record: “The Japanese are very rational when it comes to succession. What matters is maintaining the family name, not necessarily the bloodline. That’s why in Japan, 90% of adoptions involve people in their 20s and 30s. They make succession decisions based on merit and competence, literally adopting future leaders. They aim to preserve not the bloodline but the family name.”
The power of choice and the courage to choose
For Daniela Simões, a third-generation executive at Luís Simões: “It’s essential to have the courage to choose who will lead the company or decide who will hold each position, regardless of whether they are family members. While families may have very capable individuals, they might not be the right fit for a particular role.”
Daniela Simões also highlighted another need: “It is equally important to have space to address the family issues that arise. As we move through generations, understanding becomes more difficult, so it’s vital to have a platform to discuss the family challenges that emerge.” At Luís Simões, training programs were developed to prepare successors from an early age, combining family tradition with the skills demanded by the market. “It’s a process that takes time, but it has been essential to ensuring the continuity of our legacy,” she revealed.
Daniela Simões also highlighted the creation of a family forum, an annual event that brings together all family members, regardless of their involvement in the business. This forum provides updates on the company, including new projects, and strengthens family bonds. “These initiatives help preserve founding values while also fostering innovation by adapting the business to current demands.”
Purpose as a driver of profitability
Balancing profit with purpose was another topic discussed, as a company’s purpose can become less clear during generational transitions. For Cristina Amaro: “The true purpose of a business must be the priority. When it is authentic, profitability follows as a consequence.”
The CEO cited her company, Imagens de Marca, as an example: “We didn’t start thinking about profit, but about impact. That focus allowed us to grow sustainably and authentically.”
This idea of purpose was also shared by João Rodrigues Pena, who stressed the importance of aligning business strategies with the founding family’s values. “When a long-term vision is built on values, decisions are more cohesive, and the company is better prepared to face challenges.”
Responsible leadership: a pillar of business continuity
Responsible leadership also took center stage, broadening the discussion beyond succession.
Nuno Moreira da Cruz, Dean for Executive Education, brought a clear perspective: “Today, responsible leadership goes far beyond generating profit. Family businesses have a unique opportunity to lead by example, with values at the heart of their actions.”
The Dean for Executive Education emphasized balancing financial goals with social and environmental impact: “Without the planet and people, there is no profit. This triangle – profit, people, and planet – must form the foundation of any sustainable business strategy.”
Governance: the foundation of business resilience
The importance of solid governance was also discussed. Miguel Athayde Marques, Vice-Rector of Universidade Católica Portuguesa (UCP), stated that governance is the cornerstone of sustainable continuity for family businesses. “Governance is not just about creating formal structures; it’s about establishing clear decision-making processes that respect family values and business needs.”
He warned of the dangers of excessive informality: “Many family businesses function well while the founder is present, but without a robust governance system, transitions become chaotic.”
As a practical recommendation, he suggested creating advisory boards with independent members: “Including independent voices brings strategic perspectives and reduces the risk of internal conflicts, especially during succession.”
Closing: a call to new generations
Rita Coelho do Vale, Dean for Undergraduate Programs at CATÓLICA-LISBON, closed the Forum with an inspiring message for new generations of leaders: “This event has shown us that the challenges facing family businesses are complex but not insurmountable. With strong values, clear strategies, and a commitment to sustainability, it is possible to build a future where these businesses remain drivers of innovation and progress.”
She praised the students for organizing the Forum: “The Founders Forum is proof that young people can be agents of change, bringing fresh perspectives and energy to issues that directly affect Portugal’s business fabric.”
This sentiment was echoed by student Constança Taborda, who felt the event exceeded all expectations: “It was incredibly enriching to gain new perspectives beyond the classroom and realize that, even though I am not part of a family business, I could still contribute to one in the future.”
CATÓLICA-LISBON FOUNDERS FORUM: A legacy for the future?
The CATÓLICA-LISBON FOUNDERS FORUM was more than an event – it was a starting point for discussions that could transform the reality of family businesses.
As for a second edition, Professor Liliana Dinis stated firmly: “It will be up to future students of the Mastering Family Businesses course to decide if they want to organize a second edition. The challenge will be theirs.”
At CATÓLICA-LISBON, the commitment to developing leaders who can balance tradition and innovation remains unwavering, with the hope that this initiative will pass to the next generation, ensuring continued dialogue about how family businesses can not only survive but thrive.