How to build a family-business handoff that still works in ten years

Start the handoff before the announcement

Stew Leonard Jr., who was 71, said his daughter Blake and nephew Jake Tavello would begin leading Stew Leonard's when he reaches age 75. For an owner preparing a leadership handoff, that fixed date is the first control: it turns a family decision into an operating plan. A 2023 PwC Family Business Survey found that 34% of family businesses have a written succession plan, while 76% plan to transfer ownership to the next generation.

Owners of family businesses often wait too long because the current leader still feels indispensable. Even when that leader is the best operator, the business needs a second set of hands that can be tested. That delay compresses the handoff into a crisis. Beginning succession planning at least five years before a leadership shift can turn the transition into a staged, deliberate process, allowing older leaders to coach successors and check whether they are ready.

Stew Leonard Sr. launched the Norwalk business in December 1969 as a 17,000-square-foot dairy shop carrying only eight products. A staged handoff is how a long-running business keeps its next decade from becoming a scramble.

The announcement can come later. The operating plan has to be tested first. A handoff that works in ten years survives the first board meeting, the first budget, and the first time the next leader must make a call without the founder in the room. The plan should be specific enough that the family can check it against the business, not against a memory of who the founder liked best.

• Assess candidates outside the family. Before Blake became president and Jake Tavello CEO, an external consulting firm evaluated the abilities of family employees at the Norwalk-based chain. Many family business owners bring in independent advisors or structured evaluations to judge leadership potential fairly, reducing personal bias when more than one candidate wants a leadership role.
• Gate eligibility on evidence. Successor selection should require outside evaluations, work experience away from the family firm, and clear evaluation standards, creating eligibility gates rather than relying on birth order. Successor evaluation should focus on contribution, initiative, and ability to lead others rather than birth order or family status. Stew Leonard's requires grandchildren to work at another business before returning to the family company for a leadership position. The gate should be written before candidates are named.
• Stage authority before exit. Jake Tavello has held the chief operating officer position at Stew Leonard's since March 2023. A staged role lets the next leader own outcomes, not just attend meetings. The founder remains available, but the successor is the one accountable for the result.
• Fix a mentoring runway with a date trigger. Stew Leonard Jr. intends to mentor his daughter and nephew for four years as they prepare to run the company. Family-business boards should start preparing the next CEO at least three years before the transition so they can evaluate and develop internal candidates while still considering outside options. Tie the runway to the age or date trigger that starts the process. The runway should say what the founder will stop doing, not only what the successor will learn.

The warning sits in the first step: a family can mistake affection for evidence. If the outside evaluator only confirms the heir the owner already prefers, the process becomes a formality. The evaluator's job is to make the hard answer defensible. Done well, the evaluator names the weakness, not just the heir.

Make the gates about work, not birth order

Eligibility gates protect the business from assuming bloodline creates readiness. A candidate may love the company and still lack the operating experience to run it. The gate should ask whether the person has led people, performed outside the family firm, and can be held to the same standards as a non-family executive.

Outside experience forces the next generation to prove they can operate where no family name is attached to their decisions. It also gives the next generation a chance to make mistakes where the cost is bounded. For a long-running chain, that proof matters.

A gate also protects the founder from making a decision under pressure. When the standards are fixed in advance, the family can see whether a candidate is ready, and the business can see whether the next leader can be held to the same standards as a professional executive. Once the criteria are public to the family, the conversation shifts from who is entitled to what to what the role demands.

Keep ownership and leadership separate

A family member can hold a 20% stake and still never run the company, while a non-family COO can run the company without holding equity.

The board can separate the two questions: who owns the company, and who runs it. That keeps the succession from becoming a single all-or-nothing decision. It also gives the family a way to protect the business while it learns what the next leader can do.

If the next generation is not ready to lead, the business can still transfer ownership while hiring or developing a professional leader. If a family member is ready to lead but not ready to own everything, the company can stage both decisions on different timelines.