Burden or pleasure? Generational change in family businesses

Genera­tio­nal change in family businesses

The 5 biggest mista­kes in genera­tio­nal change in family businesses. 

In the meanti­me, more than 50% (!) of German business leaders are heading towards retire­ment at a fast pace and there­fo­re have to solve perhaps the biggest chall­enge in their lives: Who will take over my life’s work?

What makes genera­tio­nal change so complex and why do so many compa­ny owners fail?

Interes­t­ingly, one of the biggest stumb­ling blocks lies with the trans­fer­or himself. For decades, a business is the frame­work and content that deter­mi­nes much of an entrepreneur’s life. It is compa­ra­ble to a warming campfi­re around which I, as the owner, sit and am not only ‘warmed’ finan­ci­al­ly through my income, but also recei­ve comple­te­ly diffe­rent, emotio­nal and vital ’nourish­ment’ on the side. My compa­ny also gives me an important goal in life. Why am I here and what do I want to achie­ve? For enthu­si­a­stic entre­pre­neurs, the compa­ny can literal­ly be the drive, the motor of life. Through their work, they recei­ve recogni­ti­on, respect, appre­cia­ti­on and a colourful varie­ty of social relati­onships at all levels. Values, learning, develo­p­ment, vitali­ty, joy, confirmation?and?and.

And then comes the time, and now for more than half of all family businesses, when it is time to step back from this warming, safe source. How unplea­sant? How lacking in perspective!

Why should I let go of every­thing that was and is so important in my life in the genera­tio­nal change?

After all, the wish of many SMEs is to trans­fer the business to the next genera­ti­on. Child­ren should conti­nue what was so close­ly connec­ted with the family and their own lives as entre­pre­neurs. After all, is a Genera­tio­nal change in family businesses also the successful expres­si­on of one’s own repro­duc­tion in the figura­ti­ve sense. As the trans­fer­or, I leave behind not only a materi­al frame­work, jobs and other values, but also the biolo­gi­cal and very perso­nal succes­si­on in genetic form through my child­ren as the trans­fe­rees. How beautiful this could be. At the same time, more and more compa­ny leaders feel that this ideal can only be reali­sti­cal­ly reali­sed in about 40% of family businesses.

Child­ren may want to leave their own footprints in life. They are less and less likely to follow in their parents’ entre­pre­neu­ri­al foots­teps. Another hurdle for a successful genera­tio­nal change in family businesses is the perma­nent role change between the systems of the family and the company.

Do I think, speak, listen and act as an entre­pre­neur or as a father or mother?

This is crucial and is often undere­sti­ma­ted in its great diver­si­ty and even more rarely conscious­ly reflec­ted by those affec­ted. Almost all Conflicts in family businesses are caused by the lack of clari­ty of roles in daily coope­ra­ti­on. It does not matter whether it is about the trans­fer­or or the trans­fe­ree. If the roles as members of a family and the roles as share­hol­ders or owners of a compa­ny are not conscious­ly separa­ted from each other, quarrels and arguments are almost guaranteed.

What are the 5 biggest mista­kes in a genera­tio­nal change in family businesses?

  • The possi­ble takeover of the compa­ny is not volun­t­a­ry, but an obligation.
  • Respon­si­bi­li­ties and compe­ten­ces in the hando­ver of the compa­ny remain unclear. Who does what and when?
  • There is no timeta­ble for the trans­fer­or and transferee.
  • The genera­tio­nal change remains unclear for many years and the transferor(s) cannot break away and hold on.
  • The ?roles? as a member of the family and as a person in charge of a compa­ny are more often confu­sed and remain unreflective.

The merci­less reali­ty of demogra­phy makes it clear that there will be a large gap in the next genera­ti­on of entre­pre­neurs. The low birth rates of future genera­ti­ons mean that succes­sors within families are alrea­dy dwind­ling in numbers. It is there­fo­re all the more important that the possi­ble oppor­tu­ni­ties of a genera­tio­nal change in every family business are conscious­ly and atten­tively seized at an early stage.

Gift for readers: Free online seminar on genera­tio­nal change!

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Tips for further reading:

Inter­view: Prepa­ring the succes­si­on within the family well

5 important trends in business succes­si­on in 2019

Lack of business succes­sors threa­tens family businesses

Image: Fololia.de


What makes the genera­tio­nal change diffi­cult?

Almost all Conflicts in family businesses are caused by the lack of clari­ty of roles in daily coope­ra­ti­on. If the roles as members of a family and the roles as share­hol­ders or owners of a compa­ny are not conscious­ly separa­ted from each other, quarrels and arguments are almost guaranteed. 

What are the biggest mista­kes in genera­tio­nal change?

1. the possi­ble takeover of the compa­ny is not volun­t­a­ry, but an obliga­ti­on.
2. respon­si­bi­li­ties and compe­ten­ces in the hando­ver of the compa­ny remain unclear.
3. a timeta­ble is missing.
4. the genera­tio­nal change remains unclear for many years and the trans­fer­ors cannot detach themsel­ves and hold on.
5. the ‘roles’ as a family member and as a person in charge of a compa­ny are more often confu­sed and remain unreflective.