90 percent of German companies are family businesses. Often with a long tradition and several management changes from generation to generation. These handover processes are often complex. "A family-internal company handover is of great importance for all family members," finds Bessie Fischer-Bohn. The economist, psychotherapist and executive consultant has been accompanying families through the leadership transition for many years. Why do those who don't normally sit at the conference table also have to come to the table? How can the Prince Charles Syndrome be avoided? And what do families typically ignore?
Ms. Fischer-Bohn, you have been assisting families with internal management changes for many years. What do you see as the crucial difference between this and other companies? Are there factors that are more prominent here?
In family-internal transfers, there is this typical triad: family, company, property. And these three aspects have to be reconciled. The connections between these three points require a lot of attention and must be carefully planned with the family. External stakeholders – banks, long-term business partners, network structures and other external stakeholders – have a great interest in this: They want to be able to rely on the fact that, on the basis of this triad, there will also be a high degree of crisis resistance in the business relationships.
As a psychotherapist, economist and executive consultant, you bring an additional perspective apart from the economic one: What do you consider to be the most sensitive point within this triad?
The family aspect. It is expressed in how strong one's communication is within the family and how good one is at conflict resolution. Also, how openly the family members deal with each other. In my view, the family factor is the most sensitive and the most difficult: It is often not so much in the foreground in everyday life. But at the moment when a handover is imminent, it is precisely this factor that takes center stage.
What is important in family-internal transfers? And what is often ignored?
Above all, I think it is important that all family members consciously decide in favor of this process. As banal as that sounds, that's exactly what is often disregarded. And when I say all family members, I don't just mean those who are directly and typically involved: I also mean the people who don't work at the company. Those who don't usually sit around the conference table.
Can you give an example from practice?
Yes, I accompanied a change of management in which the father handed over to three daughters. Here it was good that the mother was present at the very first appointment. At the meeting where the foundations for the process are laid. In which there are exchanges, the vision is aligned, everyone's ideas are shared. The spouse, for example, who has been looking forward to her husband's retirement for many years, also has her own ideas. Her husband may have worked more than 50 or 60 hours a week for decades. Now she wants to enjoy the last phase of her life with him. That's what makes her role in the handover process so important: If, for example, the senior finds it difficult to let go of his own life's work, she will be a driving force in the background. And thus also play into the cards of the following generations.
Why is it still important for all family members to be present at this first appointment?
Because afterwards, it is those people who either support or brake the process in the background. As far as the family aspect is concerned, it could be the grandfather who handed over a long time ago. Family values are often an important basis. Shareholders are also often part of the family: they tip the scales. That is why I am convinced that - at least at the very first meeting - the interests of all family members should be discussed. That everyone is brought on board at the first meeting.
Isn't that too many cooks? And doesn't it also complicate matters?
I think it makes a significant difference when the family doesn't do it alone, because – many know the phenomenon of family members quickly falling into their typical roles at such meetings. At the parents' table, for example, you are often still the child. That's why I recommend having the meeting moderated by an external party. Under the heading of "company handover". It doesn't complicate matters, it actually makes them easier, because it creates a platform for everyone's ideas. Everyone is heard. Everyone is perceived. They belong – they are the family! This is immensely important in order to avoid disruptions later on. Because later, individuals no longer necessarily have any influence on operational decisions.
How do you experience it: Are intra-family transfers more difficult than others?
Every handover has its own challenges. But I think it's particularly difficult to find acceptable compromises for everyone in the case of family-internal handovers. And the less willing those involved are to compromise, the more difficult the handover and the more stressful the process becomes.
What about openness – or even closedness – to change? Do you prefer business as usual or
everything new?
If the family doesn't talk about it early on, there may already be an expectation that things will continue in the same way the older generation did. Many parents hope that their sons and daughters will adapt their approach. And that they will set an example for their children. That's human. Some others, on the other hand, realize that the handover is an opportunity to initiate perhaps long overdue changes in the company. I have experienced both. I've also seen that change is basically welcome and is handed over with trust, but that the senior person then continues to come into the company, criticizes changes and confuses the workforce.
What helps in this situation?
Follow-up. A handover process does not end with the handover. It's important for the family to sit down and recap: Are things going well? Are agreements and targets being met? Is there room for improvement?
Over what period of time does such a handover process make sense at all?
I advise at least five years' notice.
That is a long time. Do entrepreneurs start in time?
In families where people also talk openly in other ways, yes. Where there is a lively exchange, the future of the company tends to be discussed more controversially. The triad – family, company, ownership – comes up again and again and more intensively. And so does the topic of handover. Experience shows, however, that high-performing people – and many entrepreneurs define themselves by their performance and results – don't like to think or talk about quitting. For them, it is not a pleasant topic; it is difficult for them to let go. In such cases, it helps to have an external team that accompanies the financial and interpersonal issues. That sets up a plan and follows up until the sons and daughters fully take over all tasks.
In June 2019, Martin Hammer said in an interview here that more and more fathers are handing over to their daughters. This is a novelty, he said. How do you experience this?
That's interesting. Because in earlier times, it was traditionally the sons and nephews who did the professional training - studied business or engineering - and it was clear: They would become the successors. But if something went wrong for some reason, the daughters became lateral entrants. And they went from being stopgaps to entrepreneurs. Because they had to. Today, things are different: Women study just as often - if not more often - than men. And they are becoming more professional. In addition, women experience entrepreneurship as a new freedom. Nevertheless, experience shows that more sons than daughters take over when it comes to succession.
Looking back - in the 17 years you've been advising companies – is there one particular formula that has always stood the test of time?
I have observed that there is often a tendency to delay projects in the handover process or to approach them differently than agreed. Then grievances surface, the workforce becomes confused and a foggy interim phase develops. And this fog is unpleasant for everyone. That's why I always advise closeness, communication and structure. The family members should be brought together with their internal task force at regular intervals, and it is imperative that they stick to the agreed plan.
Thank you very much for your insights, Ms. Fischer-Bohn.
