Podcast #127 FAMILY BUSINESSES – CHALLENGES IN 2025 and how to meet them! – Prof. Dr. Nadine Kammerlander

In this podcast episode with Prof. Dr. Nadine Kammerlander from WU's Institute for Family Business, we discuss the key challenges that will shape family businesses in 2025. We first clarify what exactly makes a family business and shed light on why generational change is so essential for every family business. In the following, we will also show you how investments in digitalization, AI and sustainability make family businesses fit for the future.

Challenges for family businesses

1. Succession and generational change

   • Succession planning remains one of the biggest challenges for family businesses. Many family businesses are hesitant when it comes to identifying the right leader – whether within the circle of owners or through external managing directors.

   • The generational change raises questions: When will the next generation join in? How can motivation and leadership skills be promoted in the long term?

2. Economic uncertainty and investment pressure

   • Family businesses are struggling with a tense economic situation, which is exacerbated by geopolitical tensions, volatile markets and regulatory uncertainty.

   • Financial challenges influence the willingness of family businesses to invest – investments in new technologies, process optimization or international expansion are often postponed.

3. Digitization and technology

   • Technological challenges such as digitization are also a burden on many family businesses, as outdated ERP systems and a lack of IT infrastructure are slowing down development.

   • The development of digital skills and the consistent digitization of all business processes are crucial to remain competitive.

4. Innovation, AI and ESG governance

   • The use of AI and machine learning opens up new potential for production process optimization and data-driven decisions.

   • Sustainability and ESG governance are increasingly becoming a mandatory task: Family businesses must integrate ecological and social criteria into their strategies in order to meet social expectations and regulatory requirements.

Solutions and best practices

In order to meet the challenges mentioned, family businesses need three central success factors:

1. Courage to make decisions

   • As a family business, those who develop a plan for generational change at an early stage minimise risks and create clarity.

   • External managing directors, search funds or private equity models can close gaps in succession.

2. Trust in new impulses

   • Corporate start-up collaborations and the use of AI technologies promote the innovative power of family businesses.

   • Strategic investments in digitalization, digitalization training, and digital infrastructure create competitive advantages.

3. Exchange and networks

   • An open dialogue with other family businesses, startups, investors and political decision-makers accelerates learning processes.

   • ESG governance and sustainability initiatives are best implemented in cooperation with industry associations and research institutes.

For each of the challenges mentioned, there are practical best practices, which we present in detail in the podcast.