Future-proofing family businesses: Strategies for success across generations

Last month, our firm gathered family business leaders from various generations to share insights and explore strategies for navigating today’s rapidly evolving landscape. Family businesses remain a cornerstone of the global economy; in the Philippines, over half of publicly listed companies are backed by family offices. As these businesses diversify and increasingly invest in entrepreneurs and startups, their influence begins to extend beyond their own enterprises, creating a broader impact across various sectors.

As the keynote speaker during the forum, Dr. Peter Bartels, PwC Germany Partner and PwC Global Entrepreneurial and Private Business Leader, advised private and family businesses to prioritize three key areas in 2025: AI technology adoption, sustainability and climate innovation, and family capital.

AI is transforming industries, and businesses must leverage it to improve operations, enhance the customer experience and make informed decisions. Family businesses have a unique advantage in adopting AI due to the presence of NextGen members, whose agility and digital proficiency help seamlessly integrate AI into business practices.

Furthermore, sustainability and climate innovation should be central to a family business’s strategy. Stakeholders, including customers and investors, increasingly trust companies that demonstrate genuine commitment to these values. Mere claims of dedication to environmental, social and governance (ESG) practices or diversity, equity and inclusion (DEI) are insufficient; stakeholders seek tangible reports showing progress toward achieving sustainability goals.

Lastly, managing family capital effectively is more crucial than ever amid ongoing global geopolitical and economic pressures. The principle of diversification — avoiding concentration of assets in a single area — has never been more vital. Family enterprises should embrace diversification strategies, such as mergers and acquisitions (M&A), to mitigate risks across industries and regions.

In addition to focusing on these key priorities, we asked family business leaders at the event how they achieve success across generations. Here are some of the learnings they shared:

The Bounty Fresh Group, which began as a modest venture by the Cheng family in the 1980s, has grown into the country’s leading poultry integrator. Despite being privately owned, the company has increasingly welcomed the expertise of external professionals across various business units and management levels to drive its strategic goals. Caroline Chung, a third-generation family member and the Assistant Vice-President for Business Planning, Analysis and M&A at Bounty, highlights the crucial role these external experts play in the company’s success. “Working with non-family members has been a journey over time. They have a different style and a different way of working. As the business has grown, we have to recognize that there are other skills, experiences and capabilities that other people offer that we really need,” Caroline shared.

For family businesses, it’s vital to acknowledge that while keeping family members involved is important, growth can be limited without the input of non-family professionals. Bringing in external talent with a range of experiences can introduce new perspectives that benefit the entire organization.

VMV Hypoallergenics was founded in Bogo, Cebu in 1979 by Dr. Vermen M. Verallo-Rowell, a dermatologist and dermatopathologist trained in the US. Today, her daughter, Laura Verallo de Bertotto, leads the company as CEO and Creative Director. Although Laura initially pursued other career paths and hadn’t intended to join the family business, her mother eventually encouraged her to become part of the team alongside her stepfather and sister. Laura reflected on the initial challenges they encountered due to varying personalities and approaches, and how they ultimately found a shared purpose that propelled VMV to greater success.

“My mother is a scientific researcher, but at the core of that is the desire to care for people — which spoke to me as an academic who believes in representation, empowerment and inclusivity. Our ‘why’ became to save the world’s skin, not just in the dermatological sense but also to save the world from harm. That cascaded to the rest of the company and united all of our people, strengthening the organization as a whole,” Laura said.

In family businesses, it’s not necessary for members to think alike or share the same preferences. What’s important is finding common ground and a shared vision that allows family members to work together towards a common goal, despite their differences.

D&L Industries, Inc. (DNL), established by the Lao brothers in 1963, has evolved into the country’s leading chemical company, commanding significant market share across various industries. After being listed on the Philippine Stock Exchange in 2012, the Lao family has been vocal about future-proofing the business and overcoming the “third-generation curse,” which suggests that the third generation tends to destroy the business. In addition to emphasizing good governance and compliance, Alvin Lao, President and CEO of DNL, highlights the value of fresh ideas from the younger generation. “Senior members of the family business also need to listen to younger people. In our family, when it matters, people listen. In our organization, we have a culture of humility and accepting that we don’t know everything,” Alvin said.

We live in an exciting time where Generation X, Millennials and Generation Z are all working together within organizations. It’s essential for individuals to keep an open mind and appreciate the distinct insights and perspectives that each generation brings to the table.

The coming years will be pivotal for family businesses as many are transitioning leadership to the younger generation. In today’s world, gaining trust involves more than simply ensuring that family members receive adequate returns. Trust must also be cultivated among other stakeholders, including employees, investors, customers and the public. To succeed in this dynamic environment and maintain trust, family businesses should go beyond delivering excellent services and products by clearly communicating their purpose, committing to ESG principles and upholding transparency, thus building lasting relationships with all stakeholders.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.