Why is it that, especially in family businesses, business succession is predominantly male? And what dangers does this pose? We take a look at the causes. To do so, we shed light on the different approaches of the genders in their roles as leaders. We also explain the advantages of a female succession for the company. Finally, we clarify how female business succession can be strengthened.
The facts
The engine of Germany’s economic strength is small and medium-sized enterprises. Around 95 percent of all companies based here fall into the SME category. This means that more than two million German family-owned businesses play a major role in the economic strength of the Federal Republic.
The potential of acquirers is shrinking
The number of upcoming company successions will increase steadily until 2020.
At the same time, according to estimates by the Volkswirtschaftliches Institut für Mittelstand und Handwerk (ifH) of the University of Göttingen, the number of transferees will decline. This is because the number of people between the ages of 30 and 50 will decline by about 15%.
In the coming years, every second family business will be faced with a generational change and the associated question of who will sit in the boss’s chair. This is associated with the responsibility for thousands of jobs that will be secured through a company succession.
Unfortunately, female successors are still the exception
Small and medium-sized enterprises form the backbone of the German economy. In the meantime, more and more women dare to take the step to the top of a company. In doing so, they are making a very successful contribution to ensuring that Germany remains competitive as a business location in the future. And yet female succession is rare in German family businesses.
On the one hand, this is due to a value system that has matured over centuries, in which the gender-specific division of roles is clearly defined. This traditional way of thinking is still valid today. The still existing salary gap also contributes to the fact that the self-image of women as leaders is only 30 % present.
A rethink is more necessary than ever
Current studies show: About two-thirds of company owners have to shut down their business if they do not succeed with a business succession. Around 95% of all companies in Germany are family businesses with up to 50 employees. Against the background of the challenges of succession outlined above and the associated effects on our national economy, a rethink among companies and politicians is more necessary than ever.
In view of the enormous economic importance of successful company takeovers, it is necessary to increasingly promote the potential of women entrepreneurs. The current dynamics of economic activities originating from women show that they are already willing and able to assert themselves at the top of companies. Almost every third company in this country is already run by a woman. Compared to 1991, the number of female start-ups even increased by about a third by 2002, while the increase among male founders, on the other hand, was only half as high in comparison, at 16 percent.
These developments make it clear that women not only like to be in the front row, but are also very successful. An important goal should therefore be to give this positive dynamic greater validity in the area of business succession as well.
Currently, every 10th business succession is carried out by a daughter. Overall, around 15 percent of successors nationwide are women. A comparison of this status quo with the significantly higher entrepreneurial interest of women impressively shows that not all potentials are really being used.
Success characteristics of women in leadership positions
- Cooperative management style - Women lead cooperatively and holistically. They do not see their leadership position in terms of power. Rather, women live a style of leadership that, in addition to demanding, pays special attention to promoting the employees. Although the women in charge set the tone due to their leadership position, they also manage to take the voices of their employees into account. This cooperative management style promotes team orientation and thus motivation in the company. In addition, female successors, rather than sons, are open to tandem leadership with the transferor or siblings. They are also more willing than male successors to rely on the expertise of others and to make use of external help and support.
- Concentration on core competencies - Women leaders have mastered the art of delegation much more than their male colleagues. Concentrating on one’s own core competencies and at the same time integrating the professional resources of the employees leads to high efficiency.
- Openness for “typically male professions - It is evident that in the case of business start-ups, women concentrate more often than average on typically female fields of activity such as the service sector, health care and trade. In the case of company takeovers, on the other hand, female successors are open to typical male domains, such as crafts, technology and the automotive industry. Female successors have no difficulty asserting themselves in a male-dominated environment, even if they have not gone through the classic training paths of their industry. Flexibility, creativity and openness are some other success factors for female succession. In addition, they have the ability to acquire the necessary additional qualifications within a very short time in order to meet the demands placed on them.
- Reconciling family and career - Through the female perspective, female entrepreneurs are able to realise the compatibility of family and professional life. Entrepreneurial women are thus role models and in this way significantly shape new working models. This strengthens the position of women in business life far beyond their own careers.
How can female business succession be promoted?
In order to strengthen the economic position of women, there is an urgent need to improve the framework conditions. This requires the expansion of childcare services, as well as tax relief and the promotion and recognition of fathers who are involved in raising children.
Successful business successions have macroeconomic significance. It is therefore in the special interest of Germany’s economic prospects not only to increase the popularity of business successions, but also to focus even more specifically on women as succession candidates. It is therefore more necessary than ever to focus on the high potential of business successions by women and to sensitise entrepreneurs who are looking for successors to the fact that women have long been an alternative to be taken seriously when it comes to securing a company’s future.
Tips for further reading:
Lack of entrepreneurs becomes a future issue in the SME sector
Succession planning - creating the right conditions
Comment: Unresolved company successions endanger our prosperity.
Free webinars on business succession
The number of upcoming company successions will increase steadily until 2020.
At the same time, according to estimates by the Volkswirtschaftliches Institut für Mittelstand und Handwerk (ifH) of the University of Göttingen, the number of successors will fall, as the number of people aged between 30 and 50 will decrease by about 15%. And yet female succession is still rare in German family businesses at present.
On the one hand, this is due to our value system that has matured over centuries. This still clearly defines the gender-specific division of roles. The still existing salary gap also contributes to the fact that the self-image of women as leaders is only 30 % present.
1. cooperative management style: the employees are involved in the management. This promotes team orientation and motivation.
2. focus on core competencies: Women can delegate better. They focus on their core competencies and integrate the know-how of the employees. This increases efficiency.
3. openness to ?typically male professions: Compared to female entrepreneurs, female successors are much more open to male professions. In addition, they assert themselves and learn quickly.
4. reconciling family and work: The female perspective makes it possible to reconcile work and family. As role models, female entrepreneurs also shape new working models and strengthen the social position of women.
