Family misfortunes  Outsiders are often a better bet

Gucci is a prime example of a revealing statistic from recent McKinsey research: family businesses which transition to a non-family chief executive are more likely to create longer-term business value. This would explain why only a third of the billion-dollar family companies in Deloitte’s similar study expect a family member to become CEO. Most are choosing commercial success over what could be seen as nepotism.

“Family ownership can mean that people stay longer than actually is healthy for the business,” explains leadership coach Tess Cope, founder of The Transformation Agency. “So, when they shift to a ‘commercial’ leader, there’s a tighter muscle on performance management, and they tend to bring in more controls and measurement. They bring in a lot more discipline.”

Is it time for family businesses to stop keeping it in the family? As the data suggests – is this the end of the ‘nepo-CEO’?

Welcoming the outsider

Creating long-term value as a non-family member is something Joseph Grigsby is keen to prove. Grigsby became chief executive of high-end haircare brand Philip Kingsley in November 2025. He is the third chief executive to take the helm since Kingsley himself died in 2016, aged 86.

At the centre of Grigsby’s five-year strategy are plans to return the brand to prominence in the premium haircare space, pursue further international growth and boost visibility across the industry, while strengthening its position in the professional salon market. “The brand was the original scalp and hair health leader, so we had insights that were way ahead of our time, but the competitive environment has drastically changed over the last ten years, when more haircare products have been launching,” says Grigsby. “I think the brand lost its way.”

Grigsby says the board was open to an outsider with deep industry experience. His CV includes spells with major beauty brands such as Estée Lauder and Sephora. Yet Kingsley’s original successor was similarly experienced and, after taking the helm in 2017, lasted less than two years. What makes Grigsby different?

As Christine Scheef, professor of strategy at Vlerick Business School in Belgium, notes, many family businesses often need two attempts to find the right non-family CEO.

“It often has little to do with the qualifications of the non-family CEO – but rather the family’s openness to change, and the non-family CEO’s careful approach towards change while respecting the family culture,” explains Prof Scheef, who recently completed a 20-year study on CEO succession.

Grigsby certainly feels an alignment with the company board, whose members include Kingsley’s daughters Anabel and Katherine. Kingsley’s widow, Joan, is chairman.

“The family and the board of directors were very keen on bringing someone from the outside who had industry experience, who had proven experience of building brands, and growing internationally,” says Grigsby. “I was very fortunate to tick those boxes.

“It’s a true British heritage brand, and they wanted to give it a second life. How do we futureproof the brand to be around for 60 more years? It was agreed that they needed to bring someone from the outside – and give the brand a fresh look with a new set of eyes.”

While Grigsby is confident in his approach – to the point that he has even seen fit to ‘sunset’ a number of product lines that don’t fit the strategy – he has been careful to treat his new position with humility, curiosity and a collaborative spirit.

“There are rites, rituals and cultural things about family-owned businesses, so I think that was really the most important thing for me, to understand that part of the business and the dynamic with the family,” Grigsby acknowledges.

“Being aligned and holding each other accountable is incredibly important, but you also need to be respectful of the past. It’s so easy to look back and say, ‘why did this happen?’ or ‘why is it this way?’ but you have to be respectful of the legacy, of the living leaders and family members, and really show why evolution is needed.”

Honour, honesty and hope

Whether or not it was intentional, Grigsby echoes Cope’s ‘3H’ model – Honour, Honesty and Hope – that she advises incoming leaders to adopt, wherever they are going.

“You need to honour the history, and not go in with huge critique and judgement, because the minute you create an ‘allergic reaction’, then the commercial leader can get rejected,” says Cope. “In the transition between family-run and commercial leader, family-owned businesses often churn through commercial leaders, because the way [the outsiders] enter the system is disrespectful to what has come before.”

Cope’s second ‘H’ is about having honest conversations about what the business needs in order to move forward. Executed successfully, the path is then paved for the third ‘H’ – hope – which is when change can be introduced against a backdrop of positivity and optimism, rather than resentment and friction.

“When you honour, then you create the capacity and safety for honesty, and then people are ready to help you co-create what is right for the future,” says Cope. “I’ve just had a conversation with a CEO who told me this framework has stood her in good stead for ten years.”

King or kin?

Bradley Russell has advised numerous family businesses on leadership transitions as head of global wealth management firm UBS for Manchester and the North West.

He describes two types of founder visions when it comes to family firms: to preserve a legacy that keeps future generations in the company; or to seek business growth. “Is my number-one priority growing the business as fast and as big as I can? Or is it passing it down to my son or daughter at some point?” says Russell.

He gives the example of a client who was expanding his business into the US and had appointed his son to lead it there. The client was also considering taking private equity investment to fund further growth.

Russell raised the point that while bringing in external investors would help the business grow quickly, it would also make passing from father to son more complicated.

“He chose the slower, organic growth,” recalls Russell. “He wanted to retain that complete control. Once you reach a certain level of wealth, sometimes the incremental benefits beyond that aren’t worth the risk.”

Often, family-first and global dominance are mutually exclusive.

Passing the crown

Yet Crown Worldwide, a global logistics and data-management company, is showing that is not always the case. The firm is now under the leadership of Jennifer Harvey, who was appointed chief executive in 2023 after working her way up through the business for 33 years.

Harvey is the second CEO since James Thompson, Crown Worldwide’s founder, stepped down in 2019. She is also his daughter.

Thompson started the business in 1965 from Japan with just $1,000 in his bank account. He initially handed over to then-CFO Ken Madrid, who was CEO from 2019 to 2023. When Madrid died, Thompson appointed Harvey.

Harvey says it was never her intention to become CEO and she never felt such expectations. She remembers a conversation with her father before she started university.

“He said, ‘There’s no pressure, but if you ever want to join the business, we would be very happy to have you.’ I was that responsible student who was upset if I didn’t get an ‘A’,” Harvey recalls. “He didn’t give me any special opportunities so, in some respects, I was less prepared than if he had said, ‘You’re going to do this one day, and I’m going to make sure you know what to do.’”

Harvey adds: “I don’t want to speak for him, but my impression is that legacy and family continuity is something that he envisioned. But he’s a very commercial person, and he’s not going to do that at the expense of the company being financially sustainable.”

While Harvey was in the unique position of uniting the company after Madrid’s death, she says she also felt the same humility Philip Kingsley’s Grigsby experienced.

“Humility really is important, because people don’t always associate positively with a family successor. They might think something about you that’s not the case,” says Harvey. “And you need to earn trust rather than just expect it. If you don’t earn the trust, you’re not going to get anywhere anyway, because you need all those people to follow whatever the vision of the organisation is.”

So should family businesses seek to stay that way, as Crown Worldwide has inadvertently ended up doing? Or should McKinsey’s point on more long-term value coming from a non-family successor be taken as gospel?

UBS’s Russell believes there’s no right or wrong answer – but he says it’s imperative for family business founders to decide as early as possible. “You can start down a certain path without thinking of the consequences, and then when you come to ten, 15 years down the line, you can’t do what you want to do,” Russell warns.

“You do need to start thinking much earlier on about, what are my long-term plans for the business? Where do I want to get it to? How am I going to pass the business down? Who am I going to pass it down to? Have I spoken to my children? Have they actually got any desire to run this business – or do they just see it as a job?’”