The scientific facts are sobering: While a 2017 study by the Witten Institute for Family Businesses (WIFU) found that 42% of executive positions in German family businesses are already held by women, the AllBright Foundation in Berlin, in a study conducted three years later, reached the almost opposite conclusion: that only 7% of executive positions in the 100 largest German family-owned businesses are held by women.
How can academic research arrive at such different results when addressing the same issue? And what can we learn from this?
1. The Age of the Family Business
The older the family business, the more conservative and entrenched its succession structures tend to be. In such companies, it is customary for the firstborn son to succeed the family business across generations, while daughters are not even considered.
Revitalizing this corporate tradition, which has evolved over generations, often requires more than just entrepreneurial courage. No business owner willing to hand over the reins is eager to risk the success of their own company by breaking with tradition; instead, they fall back on the familiar, perhaps preferring to play it safe.
The opposite is true for young companies being passed down from the first to the second generation. A shift is currently taking place here, in which daughters are eager to take on responsibility and work with their fathers to find smart ways to align the company with the needs of female successors. They recognize the opportunities, assert their right to succession, and seek ways to create new structures in dialogue with the transferor.
2. The Question of Willingness
When it comes to the role of women in the discussion of gender equality, I often perceive an expectation that decades-old role divisions will be broken overnight. In my coaching sessions, I observe that daughters rarely feel confident in their ability to take on the responsibility of succession, and only a small fraction of them are even willing to claim their place in the company and actively embrace the new role.
What matters here is how the groundwork for potential succession is laid as early as childhood. If the daughter only sees her harried father at the dinner table and private conversations always revolve around the company, her willingness to succeed her father and subject the family to the same stress is usually low.
3. Renewing Old Power Structures
To encourage women to “want” to take on this role, the support of fathers—and indeed, of both parents—is essential. Power structures that have developed historically—and which have been embodied and reinforced by the owner, the classic patriarch—must be broken down and redistributed. With the support of the person handing over the business, this can be implemented more effectively, thereby preparing the company for female leadership.
This is because women are rarely interested in power—and thus in individual CEO positions—but rather seek sparring partners and sounding boards; in short: a team behind the team—with whom they can jointly steer the company’s fortunes. Tandem leadership structures and active advisory boards can foster the willingness of female successors to take on leadership roles and also ensure that the transition succeeds in the long term.
German family-owned businesses still have a long way to go when it comes to gender equality in corporate succession. Or, to put it positively: the potential for female succession in Germany is immense.
Through its survey of the 100 largest—and therefore typically very tradition-oriented—family businesses, the AllBright Foundation demonstrates how difficult it is to break with family customs and traditions. WIFU, on the other hand, confirms the shift in mindset that has already taken place in young family businesses and that, at 42%, a significant portion of succession is already passing into the hands of women.
