Intergenerational Knowledge Transfer in Family Firms during Times of Digital Innovation

In the fast-changing digital age, the unique governance of family firms, unifying ownership,management and control, characterized by long-lasting knowledge, makes digital innovationparticularly challenging. On one hand, the incumbent generation (especially if senior) has developedspecific knowledge throughout the experience in the business, being thus more likely to adopt atraditional and conservative approach towards the business model. On the other hand, the nextgeneration of family members’ (especially if junior) has grown up accessing and developing digitalknowledge, but might lack the specific skills, organizational know-how and authoritativeness to make itrelevant to the family business model. Therefore, the paradigm ‘incumbent generation teaches, nextgeneration learns’ becomes obsolete. How can family firms manage intergenerational knowledgetransfer in times of digital innovation? To address this issue, we conduct a multiple case study on fiveGerman family firms that have recently digitalized their business models. Building on our findings wedevelop a model of intergenerational knowledge transfer through which family firms successfully fosterdigital innovation and introduce the concept of generational metamorphosis as the role swinging in theapprenticeship process requiring family members of different generations to either acting as teachers or learner depending on the knowledge domain. Our study offers contributions to research on family business generational transition, innovation and knowledge transfer.