This article addresses one of the most significant challenges facing family businesses – generational change. How can you prepare your company for handover to the next generation, what risks are involved, and what strategies should you adopt to ensure a successful transition? The answers to these questions are key to maintaining a successful family business for future generations.
Mr. Gabčo is an experienced trainer, consultant, and coach with extensive international experience in various industries and services. He specializes in developing individuals working in demanding positions where there is high pressure to perform. He has managed many international projects focused on business strategy formulation and sales in complex environments. He gained his professional experience during 20 years of work in consulting and coaching, working in 10 countries in Europe and Asia. In recent years, he has been involved in projects aimed at changing team behavior and increasing efficiency in the implementation of the latest technologies. His main areas of expertise are Complex Problem Solving, Decision Making Under Pressure, and Leadership.
What are the main risks associated with generational change in companies?
One of the main risks is mixing family relationships with work relationships, which can cause emotional exhaustion. Separating work responsibilities from private life can be very challenging. Another risk is the company's adaptation to new technologies and ways of working, which are constantly changing and can be challenging, especially for the older generation.
How should an owner approach the transfer of a company to ensure a smooth process?
The key is to resolve not only legal issues but also personnel issues. The owner should prepare their successor not only to take over but also to further develop the company. Adaptation requires careful planning and a lot of communication. In the preparation process, the new owner must gain an in-depth understanding of current processes and where the company generates added value. It is about finding a balance between what needs to be preserved and what needs to be changed.
How can a successor bring new perspectives and innovation to the company?
Innovative technologies and digitalization can significantly improve the running of a company, especially if the successor understands current trends and is able to quickly adapt the company to the digital world. It is important that the older generation does not reject new technologies, but is willing to adapt to them in order to understand the future functioning of the company. It is also essential that the successor makes decisions sensitively so as not to provoke negative reactions, either in management or among employees.
What role does communication between the older and younger generations play in generational change?
Communication is key in these cases. All stakeholders should openly express their expectations and concerns. An independent person acting as a facilitator can ensure open discussion and help identify and resolve issues to prevent conflicts. Unrevealed expectations within the ownership structure are often the cause of emotional tension and, subsequently, the unsuccessful transfer of the company to new owners.
How to prepare employees for a change in company management?
The first step is to communicate the plans and timetable for the transition. Employees should be informed about the reasons for the change, what is expected, and how it will affect their work.
Training is also important. This could include work placements in other companies, workshops, and seminars focusing on new procedures and working methods, which can help people adapt to change. During these workshops, it is good to encourage employees to express their opinions and ask questions about anything that is unclear, as this helps to build trust.
Another key thing is to support the outgoing management. Their presence during the transition period can bring stability and provide valuable advice to the new generation.
What can companies do to make the transition smooth?
A company can start with structured discussions about the future of the company, where various options and scenarios are discussed. It is important to have plans in place for different situations that may arise and to keep in mind that the success of a generational change does not lie solely in professional knowledge, but also in the readiness of both generations for change.
How important is the attitude of both sides in generational change?
Attitude is a key factor. Both sides must be willing to cooperate and accept new solutions. Even the best-prepared plans will not work if one of the parties takes a negative stance towards implementation. Breaking down barriers to communication and cooperation is key to the success of generational change, so that everyone involved in the process is willing to learn and adapt to change.
Is it possible to keep a family business successful for generations?
Yes, but it requires a conscious effort to maintain the company culture, pass on values, and prepare the new generation for responsibility. Examples from other countries, such as Austria, Spain, and Italy, show that family businesses can survive from generation to generation thanks to strong traditions and intergenerational relationships.
Conclusion
Generational transfer in companies is a complex process that requires thorough planning, open communication, and a willingness to adapt to changing conditions. It is essential to combine the experience of the older generation with the dynamism and technological thinking of the younger generation. Enriching discussions with external perspectives, for example through consultations, can be a key step in ensuring that a family business successfully transitions into a new era. In this process, it is important not only to plan for the future, but also to preserve the traditions and values that form the foundation of the family business. In this way, continuous and prosperous business can be ensured for future generations.
If you are interested in this topic, we are organizing a free morning webinar on November 19, 2024, on the topic of family businesses, combined with a webinar on cyber security. Registration for the webinar is now open.
