In many medium-sized family businesses, a succession is due in the foreseeable future. In most cases, the company is to remain in family ownership. But not all daughters and sons are talented entrepreneurs. Or simply no one wants to do it. Then an external manager can be appointed.
When an external manager takes over the management of a family business, there are many challenges – for both sides. At the same time, the cooperation also holds many opportunities: External managers can professionalize the company with their experience and bring fresh momentum into the business. For the collaboration to succeed, a systematic approach is advisable – starting with the onboarding phase.
A good transition needs a clear roadmap
The initial situation for an external management team can vary: Either there is no one in the entrepreneurial family who is a candidate for succession, and they are permanently installed in the company. Or it is used on a transitional basis to bridge two generations of the entrepreneurial family. In both constellations, the clear division of responsibilities and cooperation between the management and the group of shareholders must be defined. Only in this way can the equation “one comes, one goes” work well in practice. To ensure that external management is accepted from the outset, it is important to involve the stakeholders at an early stage.
Close cooperation with clear rules
In order for the cooperation between the owner family and the external management to be efficient and effective, it must be cleverly organized. Powers of attorney, authority and responsibilities must be carefully clarified. Who has which task? How does the management team work together? Roles should be clearly delineated, and competencies defined. Business transactions or important decisions requiring approval can be specified in a catalog and defined in the process. There should also be absolute clarity at the micro level as to which decisions external management needs the consent of the shareholder group – and which it should make without consent. The most important thing is good communication. An imbalance in the level of information can quickly lead to uncertainty and conflict. The necessary transparency in all areas creates a solid basis for successful cooperation.
Your own in someone else’s hands
Especially in the transition situation, both sides are challenged in their entrepreneurial spirit: Building something is one thing. Handing over your life’s work to a stranger is another. The managing director must be prepared to let go and handle the change as confidently as possible. Otherwise, there is a risk that the external manager will withdraw. It is important for the external managing director to familiarize himself with the owner’s strategy and to identify with the company’s values in order to be accepted as a successor by the stakeholders. At the same time, he will help to develop both. At the same time, he should always keep in mind that it is not his company. Even if it may feel that way after a short time. The external management needs the freedom to think things differently and in a new way in order to be able to lead the company successfully into the future.
For a good cooperation, it is of course important that the external manager and the owner family “get along” well. Trust and a good dose of pragmatism facilitate professional and personal cooperation. Expectations on both sides should be communicated transparently. Clarity and structure in the coordination and the processes are important success factors and create the basis for a successful cooperation.
THE MAK`ED TEAM has already developed succession solutions for very different constellations in medium-sized family businesses. We have many years of experience in the successful organization of company successions and accompany companies in the phases of generational change with professional methods and our interdisciplinary team.