Throughout the world, family-owned companies play an important role in the economy because of their stable character, their long-term vision and their commitment to their environment and employees. Family-owned companies differ from other organizations in their culture, their entrepreneurship and sustainable growth, the way they make decisions and their focus on more than just profit.
Like many other organizations, family businesses today are faced with changing market conditions and new challenges, although this sometimes differs from the problems other companies have to deal with. For example, they often have to take more entrepreneurial risk, find it harder to raise capital and have more difficulty recruiting and retaining top talent.
A problem that family businesses face in a different way than regular companies is finding successors for senior positions within their organization. Many family businesses wish to find a successor within the family. However, they are not always available. What to do? In essence, it is about staying vital. After all, a vital organization is ready for the future. This can be achieved in a number of ways.
For example, growth makes it easier to involve the next generation in the business. It helps to bind talent from outside the family and gives the company a healthy buffer for when the economy takes a turn for the worse. For older family businesses in particular, it is important to keep renewing themselves in time. What innovations are changing the market? How can they keep up and benefit from them? What does this mean for the business model? Radically changing course does not seem advisable for family businesses in practice. Searching for new growth opportunities from the existing basis offers more results. Moreover, family businesses often have an authentic story to tell. A storytelling with clear brand values, which contributes to capitalizing on branding and goodwill.
One of the most exciting moments for current directors is handing over the company to the younger, ambitious but less experienced generation. Staying on too long as a co-director leads to stagnation, while growth and speed are actually desired. It is better to train the younger generation well, teach them all the ins and outs of the business and then give them your trust. If desired, the departing generation can then phase out in a meaningful way by, for example, taking on another project. But what if the next generation is not ready to take over yet? Should the family business then hand over the leadership to a professional CEO from the outside? Or keep the reins in their own hands? It remains a difficult dilemma. In practice, an intermediate variant works best. An external CEO brings impetus and independence, but functions less well if the family is involved solely as a shareholder and not as a participant. The optimal situation is therefore: a CEO from outside, but with the family involved.
A head start
Senior Management Worldwide offers experienced interim managers who fit these issues. Whether temporary support is needed in certain business activities or a CEO to facilitate the transition to a new management. Don’t wait until your organization is in urgent need, but start immediately. Of course, your organization will learn from the knowledge and experience of the interim manager right away. After completion of the assignment, your organization moves on to the chosen path. That’s what you call a head start.
Senior Management Worldwide (SMW) regularly publishes best practice examples from its partners. With associated member firms in 40 countries and partner branches in 21 countries including Europe, Middle East, Asia, USA and Americas, SMW delivers services seamlessly across the world in any market. One local contact in your country plus one contact on the ground in the country where we are working. Wondering how we can help your company? Contact the SMW partners in your region.