Business succession is a multi-faceted issue because every case is quite different and can therefore only be arranged individually. While the main focus is often on how the succession can be optimized with regard to fiscal aspects there are also the three closely related areas of strategy, leadership and successor development that are equally important and need to be examined. Since a company succession is usually a mixture of business and family and involves emotions, entrepreneurs are well-advised to ask for independent external advice for the whole process in order to make conceivable decisions.
When addressing the issue of strategy the first step is asking whether the corporate strategy should be continued one-to-one or be “re-sharpened”. On the one hand it can be advisable to sell less gainful marginal businesses, to refloat
loss-makers or in some cases to part with foreign activities for the purpose of focusing. The objective is to field the next generation free from legacy issues if possible and to secure the handover ability. On the other hand a clearly phrased forward
strategy could include intentions to invest in other products/market segments and in the company or to open the company for selected business developments.
Furthermore as a second step it makes sense to ask whether the business in its present form will still exist in 10 or 20 years, which challenges lie ahead (digitalisation, industry 4.0, new technologies, new competitors, great investment needs) and how
opportunities and risks are assessed. While the digitalisation basically offers great opportunities for the development of new business models, in certain cases the best decision might be to sell the company in due time if no appropriate profits are
to be expected or the risks including personal liability seem greater than the prospects.
When talking about leadership first of all the predecessor should self-critically think about his key individual risk and to transfer his knowledge really early to other executive personnel. In general companies are well-advised to
build a stable second level in order not to become a permanent bottleneck. Furthermore it should be assessed free of emotions how the demands on the company management will change in the future. In a given case one might come to realise that it is
better to install a foreign business management and to strengthen the internal management team instead of fielding one successor alone with one’s eyes open.
Closely related to the issue of reorientation of the leadership is the systematic successor development. For a long-term succession planning it is necessary to give thought to the question how the succession can be
organised at least 5 years in advance (better 10). Are the children qualified and motivated to succeed their parent? Not every young person is willing to bear the responsibility as executive partner. How can they prepare themselves for the new role
with regards to education and external work experience? When should they join the company? What should be done if there are no children or if the children are not interested in succeeding the parents? These are a lot of questions to which there are
no easy answers, yet to which answers must be found.
The accountable selection of a successor is especially demanding. First of all criteria for a successor have to be established in an iterative process – ideally with the support of an external facilitation. Which hard skills and executive
experience should he or she have? Is a generalist, a CFO or a sales professional required? Do the potential successors have enough enterprising spirit to bring the company to the fore and not only manage it? It is obvious that the successor generation
must be given the chance to grow into the new role and must also be allowed to make mistakes. What matters is the essential self-motivation and the enterprising “edge” of the successor.
Was the successor through a systematic selection process found, the transition management between predecessor and successor has to be detailed. Who manages the company when and how? Ideally the successor or the successors get the
opportunity to assume responsibility gradually as part of a binding introductory and collaboration model, after that they become part of the management and finally bear the sole responsibility from a certain day. A prerequisite is that the predecessor
supports the introductory training actively, retires step by step and gives the successor the opportunity to develop.
It can get difficult if children who are differently talented manage the company together or if the respective spouses intervene without being able to or wanting to bear responsibility. There is no general solution but tact is called for and – if requested
– active support of an adviser or coach with a good sense of business.
Again and again successors have to assume duty without a sufficient settling-in period, especially if the predecessor drops out due to an accident, a precipitate illness or dementia. In this case the issue of consulting & coaching of successors becomes very important because the strategy often has to be challenged and re-sharpened and the successor needs to be supported on the strategic and operative management. The same applies if the successors feel overwhelmed by the numerous
duties and are prepared to accept help in order to grow into the “big shoes” of the predecessor. A personal coaching can support the expansion of one’s skills, the exploitation of one’s potential and the development of a leadership ability.