53% of companies looking for a successor by 2026 are likely to resolve their succession issue via an internal family succession. (see IfM Bonn 2021)
As entrepreneurs, managing directors and shareholders, the topic of company succession is an essential part of company management. At least 3-5 years should be planned for a holistic internal company succession. Starting too late or letting go too late are the primary reasons for failed handovers to the next generation. General experience shows that succession planning is underestimated by many entrepreneurs and companies and is addressed too late, which can result in considerable losses of assets for the owners and shareholders.
A handover process basically runs as follows:
- Analysis of the current situation
- Definition of objectives
- Clarity about the succession strategy to be pursued
- Legal and tax preparation
- Practical implementation
The complexity of the process is due to the fact that 4 different levels are involved in this process at the same time.
- Personal level
- Family level
- Owner or shareholder level
- Entrepreneurial level
Psychological aspects play one of the main roles. Transparency, participation of all those involved and joint decisions are key elements. This is achieved through constructive and open communication between all persons and family members involved. Only if all family members, including those not directly involved in the succession, are in favour of the succession can the handover to the next generation be successful. Conflicts should be uncovered, openly communicated and resolved. Unresolved conflicts can be an enormous disruptive factor for the sustainable continuation of the business. Drawing up a family constitution can be a valuable tool here.
THE MAK’ED TEAM supports and accompanies your company throughout the entire succession process.
Succession is also an enormous opportunity for the further development of your company. In order to identify a suitable successor, it is advisable – especially in the case of family businesses – to take a professional view from the outside in order to objectively assess suitability and potential for successful future company management. The three aspects of leadership skills, business management expertise and entrepreneurial thinking and behaviour are of particular importance here.
To ensure the long-term success of the company, it is important to consider the family and company systems separately. In the family, equal treatment and security take centre stage, while in the company it is all about performance and suitability. It is not always easy for the people involved to separate the two systems and make the best decision for the company.