Bernd

Bernd

  • An expert in Manage­ment, M&A Advi­sory and Succes­sion Consul­ting
  • Focus on Stra­tegy, Leadership, Orga­ni­sa­tion and Effi­ci­ency impro­ve­ment
  • An Inde­pen­dent consul­tant for more than 20 years 

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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 opti­mised 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.

Bernd

Bernd

  • An expert in Manage­ment, M&A Advi­sory and Succes­sion Consul­ting
  • Focus on Stra­tegy, Leadership, Orga­ni­sa­tion and Effi­ci­ency impro­ve­ment
  • An Inde­pen­dent consul­tant for more than 20 years 

Want to get to know Bernd?

Get in contact