A common topic for business owners is that of succession. In Germany alone, between 2014 and 2018, about 138,000 family-owned companies are about to hand over the company. The starting situations are quite different. One statement, however, prevails when it comes to the handover to the daughter or son: “I do not see my children as a successor.”
Children are not Clones
A problem for many entrepreneurs is that they cannot let go. The way they have run the business so far, they see as the only right way. Likewise, they expect the continuation under the new successor. However, the son or daughter is not a clone of the father.
The one, who does it differently, may be in his mid-30s, the father retired, but does not trust his offspring. It all depends on how the junior is introduced to his new role. If he becomes familiar with the company and the processes at an early stage, the later entry into the new role as managing director will be much easier.
From training to the Executive Chair?
Son or the daughter has often studied elsewhere and come unprepared and without any experience in the parental business. Such an introduction is not perfect, because the knowledge about the processes as well as the problems in the individual areas is almost completely missing. It takes time to learn and handle this. Should the junior take over the company, for example, you should start with smaller clients – and not only professionally, but also in the leadership: Then he gets responsibilities in production, but also goes into the accounting department just to learn how to with a BWA controls, but also to get in contact with third parties such as tax consultants, lawyers, etc. He needs to know the customers as well as the suppliers.
Often it happens that the offspring do it differently than the senior. It may change things that have worked well for decades. The senior often does not see it at first glance that times have changed.
Lack of confidence in the future
We often observe that business owners do not worry about the future. The daily business needs is all their attention, the processes are running and the order books are well filled. If, for example, health problems suddenly occur, good advice is expensive. Finding someone who takes the lead quickly is rather difficult. Anyone who plans in good time and systematically incorporates a potential successor will have made good provision in case of emergency.
It takes more than expertise
Depending on the industry, the desired successor might be a good painter and varnisher, baker or heating engineer, but he has no experience in acquisition – which the father has basically taken into his own hands. Then the junior does not necessarily have to learn acquisition, but this task must be taken over by someone else in the company, who is strong in the acquisition.
Not every junior is suitable as a Successor
One thing must be said very clearly: not everyone is suitable as a successor. It makes no sense to put someone in the executive chair whose interests are somewhere else. Anyone who grows up in an entrepreneurial family knows the entrepreneurial life. If the son or daughter focuses on something completely different, because they have found their passion in it, that’s fine. There are other ways of following the business.
In any case, the interview with the junior and the question of why is recommended. Whatever the answer is, there are ways to keep the company in good hands later.
The following steps can greatly simplify entry into the parent company:
Think about your succession at an early stage and make an appointment as to when this should happen because goal requires time.
If the follower says he cannot or will not, ask the question why. You may then find that your child can not phrase that, because it is usually a feeling. Follow this.
If you do not trust your son or daughter to take over the business, then openly tell them and help them find the right job.
Do you know such and similar situations with company succession? You have already experienced it yourself or are in the middle of it? Blog with us!