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