Family businesses are a crucial and stable pillar of the Dutch economy. Perhaps less visible, but dominant in presence. In the Netherlands, approximately 60% of all companies with employees are family businesses (around 300,000 enterprises). The largest concentration is in industry and trade, followed by construction, transport, and business services. Of the 500 largest companies in the Netherlands, 200 are family businesses. In the segment of companies with 250+ employees, family businesses are fewer but still substantial. Substantial because one in three jobs and about 30% of added value are created by family businesses, which equals 17% of the Gross Domestic Product (GDP).
Family businesses generally have a solid financial structure, making them more resilient to economic ups and downs. Their focus on the long term and generational thinking means that strategic choices often prioritize continuity over profit maximization. This says a lot about the culture and leadership style in family businesses. Despite market turbulence and lifecycle phases, stability is found in values, norms, and family culture—traditions that bind and shape direction, behavior, and attitude. Especially in strategic decisions about succession, generational transfer, acquisitions, growth scenarios, or attracting external capital, family culture, values, and norms combined with the right leadership style form the core: professionalization while preserving identity.
The direct search for the right leader in family businesses is not a “one-size-fits-all” approach. It starts with gaining the right understanding—truly grasping the family business, family ties, ambitions, and the hurdles to achieve them. This includes understanding family values, culture in relation to long-term goals, and the influence of family and key stakeholders. And that cannot be done in an afternoon. It often requires multiple conversations to create a complete picture. This is perhaps the most important phase in the direct search process. It is often not about finding the “best” candidate, but the “right” candidate. A process built on trust and discretion that leads to first-time-right. It must be correct the first time.
Here are some tips to consider when facilitating new leadership in family businesses:
- Understand family culture and core values: Conduct a culture assessment before approaching candidates; EQ and CQ are more important than IQ. Ensure the candidate is not only competent but also aligned with the family’s long-term vision and norms.
- Communicate expectations transparently: Clearly state the family’s role in decision-making and governance. Explain how the balance between professionalization and identity preservation is maintained.
- Seek leaders with a long-term orientation: Candidates should be willing to invest in continuity and sustainable growth, not just quick wins.
- Engage family and stakeholders early in the process: Build support through structured understanding with family members and key stakeholders.
Use an objective process to avoid nepotism while maintaining involvement: Focus on leadership qualities and soft skills; Empathy, stakeholder management, and respect for culture are as important as strategic competencies. - Avoid an exclusive focus on corporate experience: candidates from large corporates may struggle with family business dynamics.
- Do not hide family influence: lack of transparency about governance leads to misfit and early turnover.
- Avoid rushed succession decisions: acting without a cultural fit assessment can cause identity loss and internal conflict.
- Do not ignore the emotional dimension: family businesses often have strong emotional ties; neglecting this undermines trust.
- Avoid a standard executive search approach: a “one-size-fits-all” method does not work; customization is essential.
Finding new leadership in family businesses requires a meticulous and customized process. Succes depends not only on competencies but also above all, on cultural fit, understanding of family values, and a long-term vision. A structured approach involving in-depth interviews, transparency, and the involvement of key individuals is crucial to achieving a ‘first-time-right’ appointment and ensuring continuity and identity. It is not a ‘long-haul-home-quick’ game.
Article written by Alfred Eilering.
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