Succession in family businesses is often anything but straightforward. This is due to a wide variety of initial circumstances. Should the company be sold outright—yes or no? If the company is to remain in the family, are there competent and widely respected successors within the company—or must the search be conducted on the open market? Do some shareholders want to be bought out? Or is there an excess of silent partners?
The KPMG study “From Heir Apparent to Perfect Match—(New) Succession Processes in Family-Owned Businesses” has now shed some light on the matter. A startling finding: 50 percent of companies define succession based solely on the situation that exists at the time of the handover. Other succession experts see this figure confirmed in their daily practice. “In our day-to-day consulting work, we clearly see the need for long-term, structured planning and implementation of business succession,” says Jean-Claude Baumer, managing director of Omegaconsulting, diplomatically.
Still, according to another finding of the study, competence is now the decisive criterion when filling a position—around three-quarters of respondents share this view. Consistent with this professional perspective, three-quarters of respondents also consider meeting a clear job profile to be important.
Another finding of the KPMG study: Only five percent of respondents believe that only family members can become managing directors. Just ten years ago, this figure was significantly higher. And only 12 percent of respondents would create a special position for family members.
Succession expert Baumer says from his experience: “The decision on the right successor must be made within the context of the overall system comprising the company, the entrepreneur, and the entrepreneurial family. We apply the methodological executive search approach that has been successfully used to fill critical leadership positions.” Specifically, Baumer’s experts work with the entrepreneur early on to define the specific requirements for the successor—professional, personal, and entrepreneurial. “The identification and assessment of potential candidates then takes place systematically based on this expanded competency model,” says Baumer.
Another finding from the KPMG study: 64 percent of respondents consider a clear division of responsibilities in leadership succession to be important. In contrast, 14 percent of participants believe that responsibilities may overlap. Harmonious collaboration is important to 55 percent of participants. Thirty-eight percent of respondents believe that the right balance between harmony and contrast is the key to successful business management.
Christian Drewes of GFEP I STAFFELSTAB also knows that the succession process does not always proceed harmoniously. He frequently facilitates workshops where owner families come together to discuss succession. “Nothing is more important than involving all affected family members so they can understand the complexity of the decision. Nothing is worse than not being involved—sooner or later, many will take a stand.”
Conversely, Drewes knows from experience that the response is very positive. “It opens the eyes of the participating family members; they suddenly realize that the father—who also has to juggle the roles of owner and CEO—often can’t make everyone happy and ends up falling out with at least one person.” But it is precisely this open atmosphere, according to Drewes, that offers the opportunity for the family to come together—and for constructive, sustainably successful succession decisions to be made.
Drewes also observes that today’s generation of heirs tends to be less interested in following in their parents’ operational footsteps. “The generation of people now over 18 has grown up to be very independent and self-assured; they want to pursue their own paths much more than their parents did,” says Drewes. This does not rule out taking on the responsibility of ownership. However, as the succession expert has also noted, unlike earlier generations, today’s generation of business owners—those aged fifty and older—does not necessarily want a family member at the helm of the company—but rather the best candidate available on the market.
