Family-Owned Companies Archive - transformis Consulting SE https://en.transformis-consulting.de/category/family-owned-companies/ Systemic Organizational Consultancy Mon, 25 Jan 2021 17:08:51 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 https://en.transformis-consulting.de/wp-content/uploads/2018/12/Logo_Icon-150x150.png Family-Owned Companies Archive - transformis Consulting SE https://en.transformis-consulting.de/category/family-owned-companies/ 32 32 Successfully managing generational change https://en.transformis-consulting.de/generational-change/ Tue, 19 Jan 2021 17:08:59 +0000 https://www.sedlak-partner.com/?p=29712 Der Beitrag Successfully managing generational change erschien zuerst auf transformis Consulting SE.

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Why it pays off to prepare the generation change at an early stage

Successfully designing generational change in family businesses

Family businesses are often described as the backbone of the German economy. They enjoy a special level of trust among the population and are generally perceived as reliable employers characterized by sustainable and value-oriented corporate management, cross-generational thinking, and a great commitment to their region and society. They are regarded as the “human face of the economy”. In times of crisis, family businesses repeatedly prove to be particularly resilient and adaptable.

Compared to other types of organizations, however, family businesses face particular challenges. Especially times of transition, such as the process of business succession, can create a great deal of vulnerability in the company. Therefore, particularly careful and sensitive preparation is required to manage the existing paradoxes and to successfully shape the generational change.

Julia Kobert - transformis®

Julia Kobert
Corporate Communications
+49 4102 6993 21

Family businesses - a special type of organization

Family businesses are different from other types of organizations. After all, there is more than “just” a business to manage – it is also necessary to take into account the sometimes paradoxical interests, needs, and goals of the family and the shareholder group at the same time.

The interplay of these three systems, which are constantly growing, makes transition processes such as the already challenging process of generational change even more complex. However, when skillfully balanced, the interaction of these three systems represents an enormous source of strength for the company.

Family businesses

The generation change puts established routines to the test

In the process of generational change, numerous profound shifts take place at the same time:

Not only do roles in the company change; established communication and decision-making routines are also put to the test. New structures are formed, and management structures and management cultures, some of which have existed for generations, are called into question. A generational change can turn the entire company upside down. The many aspects of change can cause unrest and uncertainty both in the company and in the family.

A sensitive approach is necessary to absorb the sometimes intense feelings – time is a valuable factor here.

Why early preparation for the generation change is sensible

The topic of generational change is present in every entrepreneurial family in one way or another. However, serious discussion of it is often postponed or it is simply not possible to get beyond a certain point.

Even with great determination on the part of all those involved to carry out the generation change, the process of business succession can stall if there is a lack of clarity about the “how”. Different expectations, unclear responsibilities and, not least, personal needs within the entrepreneurial family and the circle of shareholders can cause a standstill or even regression in the process. As a rule, such developments do not go unnoticed by the workforce, customers, and business partners.

An automotive trading group in Bavaria was also faced with these challenges. Read our practical example  to find out how the generation change finally succeeded.

Addressing the process of corporate succession at an early stage provides a valuable time budget to carefully prepare the generational change and thus enable a smooth transition.

The generational change in a family business is a highly complex process with many opportunities and risks. The way in which it is planned and implemented has a significant influence on the outcome.

– Robert A. Sedlák
CEO | Head of Consulting Field Organization and Human Resources

Robert A. SedláK

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Clarity on day X

If succession planning is started at an early stage, the day of the handover can be prepared in advance with sufficient time. In this way, the successor can immediately focus on the operational business when taking over management responsibility.

Early preparation makes it possible to work on all these aspects without pressure, so that by the time the handover takes place, it is clear to everyone how the company will position itself in the coming years and what structures are required for this.

Preparing for generational change at an early stage has numerous advantages:

Positioning the company for the future

A change at the top of the family business creates uncertainty in many places within the company, the family, and the circle of shareholders. Established routines and structures, roles and leadership cultures are questioned – by the successor management, but also by numerous executives who want to balance their position and potential in the new management constellation.

If the process of corporate succession is tackled at an early stage, the company’s management, together with the family and the group of shareholders, can use sufficient time to analyze how the company needs to position itself and strategically align itself in order to maintain its future viability in the long term. If the company management, the family, and the shareholders agree on the path to be taken in the future, everyone involved will have a sense of security and a common goal. Communication with the workforce can also be clear and unambiguous, thus counteracting in advance any uncertainties associated with the generation change.

Finding the right people for the right positions - inside or outside the company

One of the most difficult and consequential tasks of corporate management is to put the right people in the right place in the company. Sufficient time is a valuable factor here.

Particularly those in charge are under special pressure in the process of company succession in family businesses. A decision made solely on the basis of family logic can have fatal consequences for the company. However, if the family logic is disregarded and thought of solely from a business logic, this can have an impact on the family life.

The necessary resources are not always in the family – or in the company – at the right time. In these cases, it becomes necessary to recruit external people, even if individual members of the family or the company have a different opinion.

In any case, the decisions made can cause tensions and grievances. A structured process for identifying and preparing the appropriate people for the envisioned roles and the use of objective decision-making tools such as assessments can help prevent this.

The qualification of potential company successors or future members of the shareholder group should also be addressed at an early stage. Although those responsible are now becoming increasingly aware of the importance of this process, too often qualification is limited to business knowledge and neglects knowledge of the corporate culture and the values of the company – aspects that are of great importance for making wise decisions for the company.

Establish decision-making ability: Exposing paradoxes and conflicts, discussing perspectives

Unresolved conflicts, misunderstandings, and differing ideas about the strategic positioning of the company among family members, shareholders, and managers can paralyze family businesses and render them incapable of making decisions. In order to resolve such conflicts, it is necessary to disclose the existing, sometimes paradoxical interests, values, objectives and also the feelings of those involved and to bridge existing differences of opinion. Following this, courses of action are developed together.

Once the different points of view have been made explicit, all parties are given a clear view of the possible solutions. In this way, decisions can be made and supported jointly, and the company is once again able to act.

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Design corporate succession

A successful practical example

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Services for family owned companies

We have decades of experience in supporting family businesses that are facing significant transitions – such as generational change or, more generally, corporate succession.

Our competencies enable us, in cooperation with our customers, to develop new structures and organizational routines around the particular conflict situations of a family business, to concretize the associated functional challenges and to translate them into requirement profiles for key players.

Find out more about our solutions for family businesses.

Solutions for family owned companies
Julia Kobert - transformis®

Julia Kobert
Corporate communications
+49 4102 6993 21

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Capture the initial situation - discuss paradoxes

Read in the brochure how the Seitz Group dealt with the existing paradoxes and how it successfully managed the process of corporate succession.

Excerpt from the brochure

In order to capture the initial situation, transformis® first had to take up the different interests, expectations, values and objectives within the family of entrepreneurs, the group of shareholders and the management. The different social systems family, shareholders and companies were observed separately.

After the different perspectives could be communicated transparently, transformis® developed a process architecture for the generation change. In addition to working on the different personal goals and interests within the family, the shareholders and the management, the core was a broad-based strategy process with extensive participation of managers and employees of the Seitz Group.

Generation Change Seitz - Excerpt
Generation Change Seitz

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Read in the brochure “Successful corporate succession” how the Seitz Group dealt with existing paradoxes and successfully managed the corporate succession process.

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Der Beitrag Company succession – a successful practical example erschien zuerst auf transformis Consulting SE.

]]> Family businesses have a different logic https://en.transformis-consulting.de/family-businesses-have-a-different-logic/ Thu, 22 Dec 2016 12:19:13 +0000 http://sedlak-partner.com/?p=11453 Der Beitrag Family businesses have a different logic erschien zuerst auf transformis Consulting SE.

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In the next five years, the business succession is expected to take place in approx. 135,000 companies in Germany. Within the context of such generation change, transformis® will support a leading bread and baked goods producer.

Family-owned businesses follow their own logic

Time and again, the organizational type “family-owned business” confronts stakeholders and the management with exciting and challenging paradoxes that result from the specific construction of a family business. The social systems family, company, and owners follow a different logic, thus leading to unavoidable paradoxes.

The strategy process has to master these particular requirements.

Companies need impulses from outside

Consequently, the contracted strategy process includes both an external market assessment of the B2B and retail market segments, as well as an innovative customer segmentation for the B2B business. This ensures that existing hypotheses, observations, and evaluations are critically questioned and prevailing blind spots are revealed within the internal market assessment.

Strategy means sharpening the positioning in the market

A significant step in the strategy process will be the development of different options for a strategic positioning based on the obtained market and customer insights and organizational core competences. The options present a decision-making basis for a sustainable vision.

The vision will support the stakeholders in answering the currently open and central question in which markets and customer segments to invest, taking into consideration the massively changing environment.

Request further free information concerning our consulting approach for family-owned businesses

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Der Beitrag Family businesses have a different logic erschien zuerst auf transformis Consulting SE.

]]> Business Succession – Not only a Challenge for Family-Owned Enterprises https://en.transformis-consulting.de/business-succession/ Thu, 20 Sep 2012 08:04:15 +0000 http://www.sedlak-partner.de/blog/?p=4788 Sooner or later, not only family-owned enterprises are confronted with the challenges of business succession. As media reports have shown, the subject can also become relevant to large corporations, such as in the case of IKEA: According to initial reports, the overall responsibility for the company, once established by its founder Ingvar Kamprad, was to…

Der Beitrag Business Succession – Not only a Challenge for Family-Owned Enterprises erschien zuerst auf transformis Consulting SE.

]]> Sooner or later, not only family-owned enterprises are confronted with the challenges of business succession. As media reports have shown, the subject can also become relevant to large corporations, such as in the case of IKEA: According to initial reports, the overall responsibility for the company, once established by its founder Ingvar Kamprad, was to be handed over to Kamprad’s three sons. The rebuttal soon followed; “As a senior consultant, Kamprad is still involved in making important decisions” states IKEA-Speaker, Ylva Magnusson.

Although the business succession challenge particularly confronts family-owned business, the example of the IKEA-Corporation makes obvious that many entrepreneurs are incapable of detaching themselves from their positions within the company.

We accompany you during your Business Succession

This is very logical as many entrepreneurial personalities have invested the greater part of their life’s work in their company. Although, in one way or another, the matter is present, explicit measures concerning active successor searches as well as determining the related qualifications of a suitable successor are often neglected; particularly a relevant planning process in reference to long-term intentionally planned business transfer preparations appear in need of improvement.

During the parental generation’s retreat, various factors play an immense role for the successful continued existence of the family-owned enterprise. The imminent change process is typically connected with emotional denial, irritations within and outside the company as well as economical risks. Therefore, the transfer process should be prearranged in a manner that leads to restructuring in three subsystems; the entrepreneurial family, partners and company, who will then stand up to the future challenges.

Successful Business Succession

A clear communication process taking place between parents and the succeeding generation as well as a regular evaluation thereof, is essential for successful implementation of a business succession. The owners should be united and act concomitantly; a mutual family constitution and corporate governance should exist and company objectives and strategies should be concisely expressed and upheld by all company managers.

A clear legal succession ensures that unnecessary uncertainties are avoided. This difficult situation can often be positively influenced, when the following generation is capable of honoring its parents’ life’s work. The possibility of failure is significantly reduced with a well-planned transfer process.

Do you want to learn more?

transformis® advises and supports you during business successions and transfer processes. We have years of experience, based on diverse solutions for various types of organizations and suitable for different industries.Do you want to learn more about the topic? Please fill out the following contact form to receive further information or schedule a free, personal online dialog to see our references and practical examples of our current projects.

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Der Beitrag Business Succession – Not only a Challenge for Family-Owned Enterprises erschien zuerst auf transformis Consulting SE.

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