Talking about women successors in leadership positions at family-owned businesses means acknowledging that a great deal has been done over the past ten to 15 years to overcome traditional, patriarchal patterns. The automatic assumption that the eldest son would take over the company has been replaced by more professional recruitment processes. There may still be exceptions, but the women of the NextGen are qualified and self-assured enough to demand what is rightfully theirs: to be considered just as seriously for top leadership positions as their brothers and cousins, given equal qualifications.
Taking over the reins is one thing. But another is navigating the array of very specific challenges that are directed in a particularly significant way at female successors. Neither a family nor a company is neutral regarding the gender of the person at the top (and for the sake of brevity, please allow me to refer here to a binary gender framework). Studies we have conducted at the Witten Institute for Family Businesses (WIFU), as well as many conversations with female successors, underscore how significant the influence of one’s own family is on daughters’ willingness to succeed to the business.
Willingness to take over the business is not the result of a short-term decision, but rather the outcome of a process that begins in early childhood. These days, it’s no longer just the sons who are taken on factory tours while the daughters are “allowed” to play, but the influences are often more subtle. Who actually helps a growing daughter clarify the question of what it means to be a “good daughter”: a career-minded young woman with ambitions to lead the company? Or a woman who, as a mother, ensures the continuity of the business family? And if both: How can these roles be reconciled?
Coming to terms with one’s self-image, personal aspirations, and life plans—as well as the expectations of others (from parents to the company’s workforce)—requires time, openness, and sometimes even advice from third parties to find one’s way out of the thicket of too many—and sometimes contradictory—expectations. The influence of mothers and grandmothers from the current MidGen or senior generation should not be underestimated. For them, having their daughter or granddaughter serve as CEO can be a source of friction if they view this, in hindsight, as a devaluation of the life model they once chose (or accepted)—that of being solely a mother and solely a wife by his side.
If a potential successor, despite her undeniable qualifications, has a vague feeling that she lacks her family’s support, the cause may lie in such a perceived slight toward her mother. It may sound trite, but it cannot be emphasized enough how indispensable the family’s unconditional encouragement is for a female successor. Female succession represents a break with tradition in many entrepreneurial families. This means that there are currently still (too) few role models, and the female successors from the current NextGen must pave the way for the female successors who will come after them.
When examining willingness to succeed to the family business, we in family business research observe a general trend: the willingness to follow in the footsteps of the (usually still) father is declining significantly—not only, but also in Germany with its often-praised Mittelstand. The once-strong sense of duty toward the company is loosening; the NextGen generation favors career paths that are more compatible with their lifestyle. Many potential successors prefer to start their own businesses; others pursue a lifelong dream far removed from entrepreneurial activity; and some live on the other side of the world and are connected to the family business only as shareholders.
The family business—now in its third, fourth, or fifth generation, rooted in a small or medium-sized town somewhere in Lower Saxony, Rhineland-Palatinate, or Bavaria—often does not offer the NextGen the kind of environment they’ve grown accustomed to through their studies and early career experiences. This can make female successors hesitant. It’s to be expected that proving oneself at the helm of the company won’t be easy (that’s probably true for every executive in every company). But what will it be like to be the young CEO of what may be the largest local employer, under the watchful eyes of the entire town? What personal freedom remains when everything—from clothing style and choice of car to one’s circle of friends—is under scrutiny? Will I find a partner who will follow me from Berlin or London to my small hometown? And if I meet someone locally—am I then merely a good catch?
For young female top managers in their own family businesses, choosing a partner is a delicate matter, and the very high divorce rate among female successors in operational roles shows just how often suboptimal decisions are made in this context. Two danger zones emerge here. Often, the “type” a woman seeks in a partner is modeled after her father. He is a successful entrepreneur, so her future partner should be the same.
That sounds plausible, since both partners know and understand the challenges faced by entrepreneurial families and family businesses. The partnership between two successors is put to the test when competition arises—either because both companies cannot have the same priority in the long run, or when the question arises of who will take care of the children. This is a weak point that—unfortunately—often cannot withstand the strain and breaks.
The second danger arises when the husband gives up his career and stays at home. For artists, writers, and scientists, such a decision may well be feasible. But even though this option is often dutifully welcomed, in practice such a partner will find that he is ridiculed as a “softie” (especially by the dominant business figures in his circle) and is by no means accepted as a “real man.” Added to this is a significant disparity in public attention, but above all a disparity in income and wealth. “Women marry up,” as the saying goes, but for men, social and economic advancement through marriage is not the norm.
This is not something one can simply brush off; the traditional gender roles are simply too deeply ingrained. It is not at all uncommon for the husband of a female entrepreneur, who feels he is in an inferior role, to begin compensating for this devaluation—which he perceives (and not entirely without reason)—by massively disparaging his wife, her activities, her behavior, and sometimes even her femininity.
This can lead to highly problematic situations. Time passes amid all these thoughts and considerations; ambiguities can be a hindrance, and uncertainties can be discouraging. Yet, as is well known, careers tend to gain momentum precisely during the phase of life when the time has come to start a family. Incidentally, this is where the situation also becomes contradictory for the fathers and grandfathers of these female successors. Of course, they want the family line to continue. But just as pronounced is often a family-unfriendliness (or indifference) that has developed over a long period of time—a problem that is by no means resolved by setting up a company daycare center or bringing the children to the summer party.
The daughter doesn’t want to set up the branch in Brazil because she now wants to have a child? Why doesn’t she want her child to be raised by a nanny? She leaves the sales meeting because she has to breastfeed her baby …? Does all this really have to be the case? Doesn’t the company come first?
As is so often the case, the double standards of the “family business” system are evident in situations like these. To briefly shed light on this imbalance, it should be noted that, according to a study by our institute (Otten-Pappas & Jäkel-Wurzer, 2017), while a significant number of successors are fathers, the majority of female successors, by contrast, are childless. Nevertheless, the question remains: Who, if not the owner family (and mind you: not just its female members), has the authority and power to create family-friendly organizational and leadership structures?
This ranges from a team-oriented leadership style—perhaps with a co-CEO—to flexible work schedules, all the way to questioning whether certain business trips are truly necessary at all. But attitudes and behaviors toward a female boss must also change on the part of the workforce and business partners. Depending on how male-dominated a company or its entire industry is, or in which regions of the world it operates, this won’t always be easy—role models in heavy industry differ from those in the service sector.
Another issue that should not be overlooked—and one with a significant impact on the company—is the international connections of male and female successors. Studying abroad, internships—there are many opportunities to form international and intercultural romantic relationships. They communicate in English and feel like equals. But the real test is yet to come. Role expectations for women and men in Germany differ from those in Sweden, which in turn differ from those in Turkey, and those differ from those in Japan.
Even in 2022, it is by no means a given or universally respected around the world that a husband (who is himself professionally qualified) would take a back seat in favor of his wife’s career. Depending on the family and its established governance structure, heirs are confronted with very unromantic questions before marriage. Discussions about a prenuptial agreement—which lawyers insist on—often put female successors to an even greater test than male successors, as this underscores particularly clearly who will have the (economic) say in the relationship.
Any entrepreneurial family that has clarified these issues in the development of its family strategy is to be commended, as its family-specific set of rules legitimizes such pragmatic approaches without exposing itself to the accusation that it views the groom as a gold digger. As in all cases where the systems of family, ownership, and business intersect, early consideration and action are crucial to success when it comes to the topic of “daughters in succession.”
This begins with upbringing and extends to preparing the children, the group of shareholders, and the company itself for (female) succession and also includes the highly advisable development of a family strategy and a family constitution, in which universally applicable rules for the entrepreneurial family are established without being colored by personal likes or dislikes.
On such a solid foundation, female successors (and male successors as well) can align their personal decisions with the interests of the company.
