Fit for the Grandchildren: How the World's Smartest Family Businesses Reinvent Themselves and Win Across Generations

In the boardrooms of old family companies, the founders never really leave.

Their portraits hang on the walls, painted in oil, watching every meeting with the same unmoving expression. Professor Thomas Clauss has sat in dozens of those rooms, and he has noticed what happens the moment someone proposes to change something the founder built. People glance up at the painting. They wonder, quietly, what the old man would have said.

For most of business history, that glance has been treated as the enemy of progress, the dead hand of the past holding a company back. This is the story of why it might be exactly the opposite.

Because the same companies watched over by their founders are also the only companies on earth built to think in generations rather than quarters. Family businesses are the quiet engine of the global economy, creating more jobs, holding more wealth, and carrying more history than any other kind of company in the world. And they hold an asset a quarterly-driven corporation can only envy: permission to play the long game.

The Germans have a word for the instinct behind it. Enkelfähig. There is no clean English translation, but it means something close to "fit for the grandchildren." The idea is that the real measure of a business is not this year's profit or even the next leader's tenure, but whether the choices made today will still deserve to exist when the founder's grandchildren inherit them. It is the longest game in commerce, and the families who play it well compound trust, brand, and know-how across decades in a way most public companies never can.

The catch is that thinking in generations and moving at the speed of a market being rewritten by e-commerce and AI usually pull in opposite directions. The rare companies that do both, that honor the portrait on the wall while reinventing everything beneath it, are the ones worth studying. That was the subject of a recent Good to Great podcast episode, which brought together two people who see the challenge from opposite ends of the table. One has stood inside the fire. The other has spent a career drawing the map.

In the fire is George Hartel, Chief Commercial and Development Officer of Thailand's GQ Apparel, part of the Supara Group. When Hartel joined in 2019, GQ was a third-generation Thai institution with six decades of heritage, more than twenty thousand points of sale, and almost no e-commerce to speak of. Within a few years he had helped turn it into the number one men's apparel brand on Shopee and Lazada, a genuine force on TikTok Shop, and a viral-marketing machine that has drawn more than a billion views in Thailand alone. He is also a builder in his own right, having co-founded SchoolMaskPack, a direct-to-consumer business that scaled past half a million customers, won a licensing partnership with Crayola, and hit number one on Amazon two years running. Behind all of it sit more than two decades transforming brands across Southeast Asia, China, India, and the United States.

Holding the map is Professor Thomas Clauss, one of the world's foremost authorities on digital transformation in family enterprise. At Germany's Witten/Herdecke University he holds the WIFU-Foundation Chair for Corporate Entrepreneurship and Digitalization in Family Business and serves as Vice Dean for Research at the Faculty of Management, Economics and Society. He co-edits the International Journal of Entrepreneurial Behaviour and Research, sits on the board of the STEP Project Global Consortium, and helped turn enkelfähig from a quiet German value into a serious framework for how companies thrive across generations.

The practitioner and the professor, on one question. What follows is not a cautionary tale. It is a blueprint for the families who intend to build something that outlasts them.

01. The Only Companies That Think in Generations

Here is a fact that contradicts almost everything we assume about big organizations. In a family business, a transformation that would take a public company months of committees and politics can be approved before lunch.

"If you have a family CEO who truly believes in a transformation project," Clauss says, "this decision could be made in an instant." Large budgets, too, can be allocated at a speed a politically fragmented corporation can never match, because the authority is concentrated rather than diffused across a dozen stakeholders who each need managing. Speed is supposed to belong to the startup. In practice, the family firm can be the fastest mover in the room.

The long horizon multiplies the advantage. When a leader weighs a decision by what it will mean for a grandchild rather than a quarter, bold bets become defensible, brand promises get kept for decades because the people making them expect to still be standing there, and relationships with staff and customers are allowed to deepen over a lifetime. This is the rare company that can genuinely afford patience, and patience, used well, is a weapon. The art is to pair that long view with the nerve to keep reinventing. The families who pull it off do not merely survive the handover. They use it as a launchpad.

The myth this breaks: Family firms are not the slow, cautious laggards of the popular imagination. With decision-making concentrated in a few committed hands, they can be the fastest and boldest movers in their market. The constraint is rarely ability. It is nerve.

02. The Three People Inside Every Family CEO

Ask Clauss what still fascinates him after a career studying these companies, and his answer is disarmingly simple. "What makes family firms so special is they are inherently human," he says. There are always people involved, and people are gloriously not one hundred percent rational. They decide with conviction and emotion, and that is the source of their character, not a flaw in it.

The reason sits at the center of his framework. A family CEO, Clauss explains, is three people at once. A manager who sets strategy. A family member who carries the same surname to the dinner table. And an owner whose personal wealth rises and falls with the company. "You cannot really separate these three roles," he says. "We call this the three circles of family businesses." A decision that looks irrational on a spreadsheet often becomes perfectly logical once you realize all three people are voting at the same time.

That conviction can be a kind of armor. Clauss tells a story that has stayed with him. At an event on cybersecurity, one of the companies he worked with was hit by a ransomware attack. The family CEO's answer was immediate and absolute. He would never pay, because paying was not in line with the family's values, and he meant it even if the alternative was losing the company. A purely financial actor would have run the numbers and quietly wired the money. The family leader had a line he would not cross, and that backbone is precisely what builds the trust and loyalty competitors find so hard to copy.

03. Earning the Room

This is where the portrait on the wall stops being a metaphor.

George Hartel arrived at GQ as the consummate outsider, a leader of international businesses walking into a Thai family company whose instincts and relationships predated him by half a century. He had a mandate to transform it. He learned quickly that a mandate is not the same thing as the standing to use one.

The first surprise was the texture of the work. "If you step into any family business, you're stepping into a whole new world," he says. In a multinational, a few big decisions cascade down into thousands of smaller ones. Here it ran the other way. Real change had to be built in "hundreds, if not thousands, of little micro decisions all of the time," each one requiring a rethink and a bit of patient handholding. Transformation was not a single grand move. It was ten thousand small acts of trust.

And trust, Hartel insists, is the whole game, which is the hopeful part, because it can be earned. "The importance of building that deep partnership and relationship with the key decision-maker in the family" cannot be rushed. "That trust doesn't come overnight," he says. The family takes a leap by bringing you in. You step up, you deliver, and the trust that follows becomes rock solid. Until then, you roll up your sleeves. "If you like to operate, it's a lot of fun."

Clauss frames the same idea more precisely, and it is the most useful thing an incoming leader can understand. You arrive with technical permission, the credentials the hiring process screened for. The prize you actually need is the second one. "Besides this technical permission to facilitate change, they would also need to get an emotional permission," he says, "and this is way more complex." It is granted slowly, on the basis of shared values and delivered results, and it is the thing that converts a job title into real authority. As for the founders on the wall, the skill is not to defy them but to bring them along, to treat the legacy as a foundation rather than a cage.

04. The Unlock: Bounded Trust

For all the talk of strategy, the single move that made GQ's reinvention possible was structural, and any family can copy it.

Hartel is candid that the most common arrangement quietly suffocates the next generation. The successor is often brilliantly prepared, sent to the best schools and trained to think big, and then handed a deal that takes it all back: you can do whatever you want, as long as I sign off on it. "We're going to let you take over," he says, describing the trap, "but as long as we can just have a hand in every single decision along the journey." Run that loop enough times and the would-be reformer simply stops reforming. The energy leaks out of the room, and the company drifts back to the way it has always been done while the market moves on without it.

GQ did something smarter, and Hartel credits the family's CEO for designing it. Rather than relitigate every call, the family ring-fenced a sum it was comfortable investing in the transformation, an amount it could lose without endangering the business. The terms were explicit. Here is the budget. Go build what you believe in, and we will look at the results together. That single act of bounded trust set everything loose.

What it bought is best measured in product. Freed to act, the team poured its energy behind one hero item rather than a sprawling catalogue, engineering the GQ White shirt around stain-proof and sweat-proof technology and pairing it with viral marketing that pulled roughly fifty million views and sold two hundred thousand shirts in sixty days. None of that, Hartel says, would have survived a traditional board meeting, where half the room is risk-averse and the other half is asking whether you are really sure you want to do it differently. The genius of the structure is that it protects everyone. The family caps its downside to a number it can live with. The new leadership gets the autonomy to move at the speed the market rewards.

The unlock, in numbers: Given a ring-fenced budget and genuine autonomy, one hero product, the GQ White shirt, drew about 50 million views and sold 200,000 units in 60 days. Bounded trust is not a soft idea. It is the structure that lets reinvention pay for itself.

05. The Ability and Willingness Advantage

Clauss has spent years measuring why some family firms transform and others stall, and his finding rewrites the usual story. The difference is rarely capability. It is appetite.

On the ability side, he argues, family firms are better equipped for bold change than almost anyone credits, because they own assets that never show up on a balance sheet. Years of earned trust. Unusually loyal employees. Customer relationships measured in decades. A long horizon. Funding that often comes from inside rather than from nervous outside capital. Add the speed that concentrated ownership allows, and the raw capacity for transformation is formidable.

The variable is willingness, and willingness can be grown. Because owners carry personal and emotional stakes in every choice, they weigh what Clauss calls socio-emotional wealth alongside the economics: what a move means for the family's name, for the grandchildren, for the project of building something lasting. That care makes them superb at steady, compounding improvement and more hesitant on the radical, uncertain bets, which is the exact shape of most digital change.

The fix is specific, and it is the line every family business should underline. Clauss's research finds that the deepest transformations are led by people from the family, or by those with the family's clear backing, not by outside consultants. So the highest-return investment a family can make is in its own fluency. "If they lack some fundamental understanding of, for instance, AI, they make decisions about things they don't understand," he says. Teach the family enough to decide well, and the willingness catches up to the ability it already had.

The lever: Family firms already hold the ingredients for bold transformation. The one thing that activates them is digital fluency inside the family itself. Educate the owners, and you unlock the capability that was there all along.

06. Proof Over Persuasion

When the pandemic shut Thailand's retail floors, GQ faced the kind of moment that ends weaker companies. What happened next is the clearest demonstration of Hartel's whole philosophy of change.

Rather than wait, the team scrapped a product in development and designed a face mask from scratch, taking it from idea to launch in roughly ten days and selling more than a million units in six weeks. The sprint did not just generate revenue. It taught the organization, in real time, what speed and scrappiness could do, and that lesson became the engine of everything that followed.

It is the same instinct Hartel used to win the bigger internal argument, the push to sell online at accessible price points without diluting a sixty-year reputation for quality. He did not try to win it with slides. "It doesn't really matter sometimes how much data I can show," he says. "It's like showing them by doing." So he proposed experiments. One marketplace. One category at a mid price point. Then he let the volume, the profitability, and the five-star reviews make the case no spreadsheet could. He calls it a drip. Introduce a change, let a few of them deliver an outsized win, and the room converts itself.

He pairs it with a piece of wisdom that doubles as his product method. Start with the problem. "White shirt stain. Socks smell." Name the real problem the family and the customer already feel, agree on it first, and the path to change opens on its own. Solve something people genuinely want solved, and you never have to sell the solution.

07. The Confidence to Fail Forward

Not every bet lands, and Hartel is refreshingly willing to say so. He describes a product the team loved, backed with real insight and real spend, that simply got its price wrong. The marketing worked and millions watched, but the launch underperformed. "That was on us," he says. "We missed it."

What happened next is the actual lesson. There was no hunt for someone to blame. The leadership's trained reflex is a single question. What did you learn from this? They have had videos they were certain would soar and did not, launches that fell flat, plenty that taught them something on the way to the wins. Each time, the conversation turns on learning rather than fault.

That, Hartel argues, is psychological safety, and it is a quiet superpower for any company trying to reinvent itself. "There isn't a layer of psychological safety inside" many family businesses, he says, where one mistake can become "a mountain on top of me," a public loss of face that teaches everyone to stop trying. Build the opposite, a place where a miss can be named openly and the team moves straight to the next idea, and you get people who take smart risks and keep their nerve. Reinvention runs on experiments, experiments produce misfires, and only a culture safe enough to absorb them can keep experimenting long enough to win.

The multiplier: Transformation is a sequence of experiments, and experiments fail. Psychological safety is what lets a team treat a miss as tuition instead of a verdict, and it is the difference between a company that keeps swinging and one that freezes after its first public mistake.

08. The Winner's Blueprint

Across years of fieldwork in Europe and beyond, Clauss has distilled what separates the transformations that take root from the ones that fizzle. Read together, they form a practical playbook.

It begins at the top, which in a family firm means the family. The strongest results come when change is genuinely owned by family leadership or by trusted partners working shoulder to shoulder with them. Clauss offers a German intralogistics company as the model: its family CEO had been captivated, years earlier, by what he saw at a trade fair, and then personally championed the change until the whole company moved with him. The takeaway is the power of leading by example. The people steering the change have to be visibly living it.

From there the blueprint is concrete. Know your strengths and your limits, and bring in outside expertise where it genuinely adds horsepower instead of insisting on building everything in-house. Treat the work as a marathon, not a gesture. That same CEO told Clauss, after a decade of effort, that they had "failed successfully," meaning the return was hard to put on a spreadsheet yet he was certain the company would have been in trouble without it. Start with the unglamorous foundations, beginning with your data, because, as Clauss puts it, "if you don't have your data digitalized, if you do not have the right interfaces in place, it won't work." And communicate relentlessly. He describes a heating-device maker whose CEO and digital chief walked the entire company, office by office and across the shop floor, explaining why the journey mattered and listening as much as they spoke.

The thread tying it together is empowerment. When a family backs its leaders, gives them authority equal to their responsibility, and commits to the long road, transformation holds. The most common way it dies is the opposite move, naming a head of digital and then quietly withholding the power to act. "They give a person all the responsibility," Clauss says, "but they don't give them the power to make it happen, and then they wonder why the company doesn't transform."

The blueprint: Family-backed leadership, honest awareness of strengths and limits, a multi-year horizon that begins with data, and constant two-way communication. Give your change-makers authority to match their responsibility, and the gains compound.

09. Built for the Grandchildren

Ask Hartel what he hopes survives at GQ long after his chapter ends, and the answer is the line written, most days, on the company's walls. Design generational products, not seasonal ones. "We're designing products that will last a generation and not a season," he says. The wish is unexpectedly tender: that when the current CEO's children one day walk the aisles of a store, products developed in these years will still be on the shelf, perhaps in a new color or with a new waistband, but recognizably the same ideas, still serving the same people.

The deeper inheritance, though, is not any single product. It is a reflex, the agility to keep moving as the market moves. He has watched GQ travel from marketplace selling to discovery-led commerce on platforms like TikTok Shop, and he expects the channels to keep shifting, perhaps toward buying through AI assistants in a future none of them can yet picture. What he wants to leave behind is a team built to adapt, one that prizes trying things before they become obvious. Get that right, and the specific products matter less than the instinct to keep renewing them.

It is, in the end, the idea Clauss named at the very start. Enkelfähig. Fit for the grandchildren. One man arrived there through a decade of launches and bold bets, the other through decades of research, and they met in the middle, on the conviction that the finest businesses are the ones built to be handed on.

Conclusion: The Most Rewarding Game in Business

The generational handover is usually called the hardest game in business. The more useful truth is that it is also among the most winnable, and the families who win it are not lucky. They are deliberate.

They grant bounded autonomy instead of demanding a signature on everything. They invest in their own fluency rather than outsourcing judgment. They lead change by demonstration, starting from problems people already feel. They build the psychological safety that lets teams take smart risks. They back their leaders with real authority, begin with the unglamorous foundations, and commit to the long road. None of it is secret, and all of it can be learned.

Which returns us to the portraits on the boardroom wall. The founders are watching, and the temptation is to read their gaze as a warning. The leaders who succeed read it as a charge instead. The point was never to keep the company exactly as the founder left it. It was to hand it on stronger than they found it. George Hartel and Professor Thomas Clauss have shown, from the boardroom and the research desk, that this is plainly possible. The only open question is how many leaders will choose to play the long game well, and make the choices today that will still deserve to exist when the grandchildren inherit them.