DAX companies and family businesses: two worlds of their own

According to research by executive search and talent management consultancy Korn Ferry, only five DAX chief executives are believed to have previously worked for an unlisted company, i.e. a privately owned company. Of the 30 leading family-owned companies not listed on the stock exchange, only seven CEOs have reportedly had a group as an employer before.

Contemporary models?

Especially in times of new, disruptive business models, it should be an advantage to have lived and worked in both worlds, or rather systems - underlines the study by Korn Ferry. Hubertus Graf Douglas, Managing Director of Korn Ferry in Germany, says:

"Managers usually unconsciously determine the type of company in which they will pursue a career. Often, this is already decided with the first professional station." The CEO goes on to note: "Politics, business, science and the media are considered to have very little permeability between them. A similar effect also exists between the worlds of 'corporation' and family business."

Yet today's top managers would have had comparatively similar training at the start of their careers. Surprisingly, only six of the DAX CEOs have actually completed vocational training. According to the Korn Ferry experts, there is also public evidence of a similar training situation among board members/managing directors at companies that are mostly privately owned.

More than a third of them studied business administration, followed by engineering, law and occasionally natural sciences. Matthias Müller at Volkswagen is the head of a DAX company with a degree in computer science. One difference in the Western business world is particularly striking: While more than one-fifth of the group CEOs are engineers, only just under ten percent of the CEOs or board members of the major family businesses are engineers.

Tradition and stable smell

While no DAX CEO today has not studied, these cases do still exist in family businesses. The fact is: "Without an academic degree, you don't stand a chance at the top management level these days," says Douglas. "The decision for a system is usually made at the first professional station.

Conclusion: While in one world it is primarily a matter of satisfying a large number of investors and social stakeholders, in the other world everything often revolves around one thing: the satisfaction of the owners and shareholders. This has a clear impact on management models and corporate culture.

Douglas: "Those who want to find their way up the ladder understandably therefore align their behavior and decisions very early on with the different requirements of each culture."

Graf Douglas says: "In order to get into top management, consistency paid off above all, in the past as it does today. A good reputation is and remains an important bonus for the choice of a new boss. External appointments have an increasingly difficult time, as prominent cases show. And moving to a company always brings with it the risk of not getting along with the culture. Executives fail not because of a lack of expertise, but because they can't find their way into the new culture.

This is also the real reason why there is hardly any career mix between corporate groups and family businesses among top managers. (Source: Korn Ferry)