The Risk Enterprise-Owning Families Tend to Underestimate
Most business-owning families think they have a handle on risk. They don’t, at least not fully. The operating company they built is almost always their largest single asset, and it almost never makes it onto the risk register.
Webb Stickney, Partner at SeatonHill Partners has spent 40+ years working alongside enterprise-owning families – inside their businesses and their single family offices. In a recent conversation with The Family Office Project, he laid out the risks he’s seen play out again and again.
The Operating Company: a Single Family Office’s Largest Unmanaged Risk
When Webb sits down with a family to look at family assets and wealth, he sees the first big risk. The family generally has investments in real estate, stocks, bonds, maybe hedge funds and private equity. The family may even have a yacht, an airplane, art, wine and other collectibles, but the family operating business is often not mentioned at the start. “Your largest single investment in most cases is your core business — and you don’t have as much control as you think you do.”, Webb shared.
The reason is understandable, Webb advises many business owners who are first-generation entrepreneurs. They built the business from the ground up and they’ve been at it for twenty, thirty years or longer. The business doesn’t feel like a risk — it feels like something they understand completely.
COVID changed that for a lot of owners. Many business owners who did not think of their core operations as vulnerable found themselves facing serious financial disruption. For many, it brought home just how much risk there is in their most important asset which is both illiquid and concentrated.
Family Business Succession: Why Family Members Aren’t Always the Right Choice
The second risk Webb identifies is one that plays out in many enterprise-owning families. It’s the belief that family members are the natural next leaders of the family business, sometimes that is correct but not as often as you might think.
Webb makes sure that professional management is considered before promoting a family member. Professional management is the norm everywhere else. Most business owning families resist it. Bringing in outside executives often requires what Webb describes as an emotional realization, not just an intellectual one.
In Webb’s experience, “It’s not just an intellectual realization. It has to be an emotional realization. This is a family brand. They’ve built it. They’ve become emotionally attached to it.”
Webb points to one example that illustrates the upside of getting this right.
A consumer-facing business whose founder recognized early that his children, his siblings, and other family members were not the right people to run the operation, so he brought in professional management. The business is now one of the most successful of its kind in the world, and the founder’s descendants are among the wealthiest individuals alive. None of them run the company.
When to Start Family Office Succession Planning
Owners almost always wait too long. The instinct is to start planning when there is a transaction on the table – when it forces the issue. Webb pushes clients to start planning well before that.
In interviews with prospective clients, Webb will ask directly: What are your long-term goals? Does the next generation know what you have in mind? Are there shared objectives? The questions and the answers can outline the planning and communication needed in the work ahead with the family.
Webb's goal is clarity — well before any transaction. That means working through philanthropy, governance, and what the family actually wants wealth to do for the next two or three generations. Post-transaction planning is possible, but some of the most important decisions end up made by default rather than by design.
The Three Circle Framework: Ownership, Management, and Family
The three-circle Venn diagram — ownership, business management, and family — represent the overlapping roles that concentrate risk in enterprise-owning families. In most founder-led businesses, one person sits at the center of all three. The founder owns the business, manages it, and is the family’s dominant voice on it.
Webb's work helps families understand when and how to start separating the roles — before circumstances force it.
His advice, consistent across four decades: the best thing you can do for the next generation is not what you think, “If you want your great grandchildren and their children to benefit from what you’ve built, your best shot is not to give them a job.”
For family offices navigating governance, technology selection, or succession planning, explore the Family Office Project on YouTube or connect with Jon Carroll + Family.
