(Op-ed originally published in JDN)
Territorial roots, networks built on trust, a long-term mindset: it's no surprise that French family businesses demonstrated remarkable resilience during the pandemic. While they rarely make headlines, they account for over 80% of our productive fabric.
The challenges of succession
Yet they all face the same challenge: succession. Indeed, more than two-thirds of them don't make it past the second generation, and this percentage drops further with each successive generation.
Passing down a legacy also means transmitting a certain relationship with the world. Here, it's the new generation of a major family organization refusing to fly to a multi-day seminar. There, it's a descendant channeling all their investments into agroforestry. When it's not an entire legacy business being redirected by an heiress seeking to reconcile with the family's history.
In a family business, concern for future generations isn't an abstraction: when it comes to passing on productive capital to your heirs, the connection is tangible. Passing it on means maintaining that connection.
So how can we facilitate intergenerational dialogue and create the conditions for a smooth transition? By (re)embedding impact into the company's DNA to ensure its long-term sustainability
A legacy that is passed down also encompasses human and intangible capital—the ability to create jobs, sustain local industries, and think in terms of generations. The key to long-term success lies in the capacity to redirect activities and redeploy capital to embrace the economic transformations of the time. Two centuries ago, the Peugeots were millers. Then the family mill became a foundry, the foundry became a manufacturing plant, and the plant evolved into automotive production lines. The industrial revolution underway today is the impact revolution. Accounting for the social and environmental consequences of one's business isn't a matter of noble ideals—it's the guarantee of maintaining future profitability.
For a business leader who genuinely cares about the long term, putting impact at the heart of their industrial project today is a way to navigate the critical stage of succession. It's a philosophy of action that brings everyone together: some because they want to see what they've built endure, others because they would be willing to turn down an inheritance they couldn't transform into a vehicle for meaningful engagement.
Becoming a driving force in the impact revolution for future generations
Investing in and engaging with impact entrepreneurs is one of the levers for initiating and spreading this approach—a form of learning by doing. Several options are available to family businesses: investing in evergreen funds, creating a dedicated investment vehicle, or participating in a specialized multi-family office. The most ambitious even go so far as to run an internal family impact club deal, which has the added benefit of creating connections across generations.
To fully express their potential, impact startups will need the efficient capital and experience of the leading families behind France's finest SMEs and mid-cap companies—families who, in turn, can find renewed purpose in their mission. Between impact finance and family businesses, this is both a marriage of passion and pragmatism.