What used to be taken almost for granted—and was often reflected in company names, such as “John Doe & Son”—has long since become a matter of debate.
Generation Y—those aged 25 to 35—is questioning the supposed inevitability of succession within the family. Why should I join my father’s company when I could start at XY—without taking on risks, with regular working hours, and the chance to work abroad?
Potential successors are better informed and more independent, and those handing over the business have often learned the hard way that a “forced” entry into the family business doesn’t always lead to happiness.
In the following, we will deliberately focus on the so-called “soft” factors. Legal and tax issues will not be addressed here and, in practice, do not represent the actual stumbling blocks.
Before a business owner sets out to select a successor, it is important to clarify their own motivation for an intra-family succession: Why do I want to hand over the business to my son or daughter? And: What exactly do I hope to achieve by doing so? Supplemented by the counter-question: What would be different if the successor came from within the company or from outside?
The family successor should also reflect on the same questions: Why exactly do I want to take over the company? What do I expect to gain from this? If there is initially only very limited willingness to do so, the following question is worth considering: What would have to be different or happen for me to be able to imagine taking over the company?
All answers should be documented in writing and discussed in detail. Nothing is more important than openness, transparency, and trust in this early phase. And if business owners approach the process responsibly, they will engage an experienced and neutral facilitator to lead the discussions, as many of the questions above will lead to further questions and must be resolved collaboratively.
At this stage of the process, accurately articulating the concerns of both sides is crucial for future success and a central task of the facilitator. Parents and children are entrenched in their respective roles and perspectives and find it difficult to switch positions or reflect on their own viewpoints from a meta-level.
The effort required and the profound impact of such facilitation processes should not be underestimated; they form the foundation for a solid generational transition in family businesses. Experience shows that failing to adequately address these issues as the succession process progresses leads to conflicts, which then become significantly more draining to resolve or, in the worst case, lead to a rift.
Siblings, life partners, and grandparents—all individuals closely connected to the company—must also be involved in this complex process. This naturally extends to tax and legal considerations, which serve as a framework and guidelines for the wishes and needs identified among the stakeholders involved.
So take this opportunity to discuss everyone’s motivations in detail and thereby lay the groundwork for a solution that is sustainable and effective for both sides.
