Family businesses must face change
To mark its 25th anniversary, the largest association of Swiss family businesses (FU) commissioned a study to survey changes in their success factors. Traditional family values need renewal - best in cross-generational dialog, according to one conclusion.
The study by the Family Business Association (FBA) found that independence, longevity and trust form the foundation of family businesses, but more so among study participants over 60 years of age and significantly less so among participants under 40. According to Dr. Wolfgang Schwartzkopff, head of the study and co-president of the German-Swiss Association of All Family Businesses, it is apparent that the younger generation also wants a greater international focus as a strength and pays more attention to the topic of training quality.
High demands on management
Likewise, success factors specific to family businesses include the successful management of generational change. This process is more difficult, not least because of the very high demands on family and company management. For Prof. Denise H. Kenyon-Rouvinez (IMD), family businesses need people with passion, drive and resilience at the top.
Succession planning in family businesses
Unexpectedly, the study shows that in the case of a non-family solution, the sale to another entrepreneurial family is preferred in succession planning. Management buy-out is seen as another favored option before selling to a non-family controlled competitor. Once the business has been sold to a third party, a new chapter can be opened for the entrepreneurial family when it becomes an "investing family".
70 % of the respondents explicitly mention a close connection between family values and the success of the company. These mission statement contents remain a relevant yardstick even when an external CEO is sought. It can even become an advantage for a family business if generation-specific value changes take place. In order to correspond to the spirit of the times in a more sustainable way. The study participants see disunity among family members and nepotism as a natural risk.
Intra-family succession: important points
Successful succession within the family requires
- the early planning
- the design as for an important project, with milestones and timelines
- the renunciation of nepotism
- the clear definition of the division of roles
- the dialogue about value differences
- the thematization of conflicts at the beginning of the process
- the consideration/clarification of financial aspects of all family assts, as well as
- the contractual regulation of the transfer of ownership
Schwartzkopff sums up: "It remains essential that each entrepreneurial family intensively discusses the orientation of the family and the company in confidential talks and that the total assets ("family asset allocation") are included." This is particularly important to ensure that the next generation assumes responsibility for its own assets at an early stage.
Source and further information: http://familybusinessassociation.ch/