June 9-2025

By: Dhania Puspa Purbasari

Behind the success of many family businesses in Indonesia lies a hidden challenge that too often goes unspoken until it’s too late: the third-generation curse. The saying “the first generation builds, the second enjoys, the third destroys” may sound harsh, but statistics support the reality—only around 13% of Indonesian family businesses survive into the third generation.

This phenomenon isn’t caused by market forces or external competition. More often, the downfall comes from within the family itself. A lack of structure, preparation, and open dialogue often causes the very legacy built with hard work and values to fall apart over time.

Why Do So Many Family Businesses Fail to Last?

Research by PwC and McKinsey identifies several common reasons:
– Lack of succession planning – Critical conversations are often delayed or avoided entirely.
– No formal governance – Undefined roles and responsibilities lead to confusion and conflict.
– Emotional decisions – Personal dynamics interfere with professional judgment.
– Over-reliance on one founder – When everything depends on one person, the business becomes fragile.
– Nepotism and resistance to outside talent – A lack of fresh perspective hinders innovation.
– Poor next-gen preparation – Many successors inherit wealth but not leadership or wisdom.

The Solution: Transformation Without Losing Identity

To thrive beyond one generation, a family business must transform intentionally—not by abandoning its roots, but by strengthening them through structure and clarity.

That transformation starts with family governance: a system that brings transparency, defines roles, manages succession, and preserves both harmony and purpose. It’s not about controlling the family—it’s about protecting the legacy.

Stronger Together: Turning Challenge into Opportunity

The third-generation curse is not inevitable. Many families across Asia and beyond have broken the cycle by embracing structure, succession planning, and professional support.

At Qando Qoaching, we believe that family businesses are not just economic drivers—they are stewards of culture, values, and national strength. That’s why we created Stronger Together, a program designed to help families in Indonesia build sustainable family governance, prepare the next generation, and align their business with long-term vision and shared purpose.

Legacy is not just about what we leave behind—it’s about what we build together, now.

Want to ensure your family business thrives across generations?

Begin your journey with Stronger Together, our dedicated family business consulting program at Qando Qoaching.

Visit us: www.qq.co.id
Learn more: campsite.bio/qqgroup
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