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Handing over your own company is a challenging subject. Many entrepreneurs find succession difficult, even when, like one of our clients, they engage with it early. The mid market entrepreneur Frank S., in his early sixties, had begun thinking about succession in his mid fifties. He was therefore in good time. It had been clear early on that his only son would not take over the firm. So how to proceed? Sell the company? To get everything right in this complex decision, Frank S. brought in an expert.
Succession has too many facets
In the period that followed, many options were opened up and many approaches developed. The seasoned entrepreneur found it very hard to decide which path was the right one for him. The questions and discussions with the expert led to even more possibilities and variants. For the entrepreneurial family the chapter of succession therefore became more and more of a strain. For everyone involved it was an unsatisfying, drawn out and exhausting process. Not only the question of who would take over was hard to grasp, but also the question of how. In the end a great deal was analysed and discussed. And nothing happened. The feeling that we are not going to manage this overshadowed an otherwise well running daily business. That is the point at which we joined the process, and it quickly became clear: focus was urgently needed in order to prepare and take a decision.
Focus on the objectives
An individually fitting succession solution is of course not easy to identify: succession within the family, a sale, MBI, MBO or external management. Those are only the big questions, which branch out into many sub topics the more concrete things become. That is why we at THE MAK'ED TEAM place great value on a structured approach. Because whatever the individually optimal solution looks like, one thing is clear: in a succession process too, you cannot keep every option open.
Structured succession processes
We subsequently worked out a succession solution with a systematic approach, one that is viable and satisfying for the entrepreneur, the entrepreneurial family and the family business. To achieve that, Frank S. and his family engaged intensively with their ideas and wishes for the future. And they did so at first entirely independently of the technical questions of succession and its practical implementation, with a clear focus on the question of which constellation could produce satisfaction. The family talked to us at length about their understanding of themselves as an entrepreneurial family, and it became clear that they wanted to remain one. The two daughters of the only son, who had taken a successful career path in another industry, should therefore keep the possibility of leading the family business in future.
Whereas until then Frank S. had always felt he wanted to keep one or two options open, the succession planning was now clearly focused on one goal, which is being pursued consistently. The earlier the better. Because everything needs systematic preparation geared to the company in order to make the succession step successful and secure the company's future viability. Long before the change of generation, succession management may be about the next leadership generation acquiring competences, for instance. Or about relevant points of detail to be considered within the future group of shareholders. Whatever succession looks like in a given company, in most cases it brings a complex task with it, one that can be managed well with a clear objective. That is why THE MAK'ED TEAM does not only work with broad professional expertise. We accompany succession processes with the necessary sensitivity as well. Our structured approach has already proved itself in many succession processes. In the case of the entrepreneur Frank S., succession within the family shifted to shareholder level, while an external managing director was appointed. In preparing this step, the interplay between the group of shareholders and the external management was designed just as carefully as the transfer of the company shares to Frank S.'s son and his children. Steps were also defined for how the daughters can prepare over the coming years for a possible role in leading the company. The time until the next decision, on whether the entrepreneur's granddaughters might take over the management, has been bridged. To that end a suitable managing director was sought and the competences of the leadership team in the company were developed further.
Our mid market client Frank S. is one example among many. Again and again we observe succession processes dragging on because many entrepreneurs find the decision very hard, the right decision. In succession processes THE MAK'ED TEAM concentrates on an approach that is meant to give the entrepreneur the necessary clarity about their goals and about what is feasible. That creates a good basis for preparing and taking decisions.
You can find more on succession here.
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