Corporate Succession

Raising a successor

 

Introduction:

Comic 1There seems to be no other situation for family businesses that is as important and crucial than corporate succession. The whole enterprise is exposed to a fundamental change. Furthermore, the family and the shareholders have to clarify or change functions, roles and attributions, and last but not least also the employees of the enterprise are intensely affected by the succession process and might react in a highly sensitive way. Many crises and insolvencies of enterprises take place due to a failed succession processes.

Although a lot of guidebooks and check lists are available on this topic, it seems that there is no general strategy for family businesses to organise a successful succession process. According to the Witten Institute for Family Business, it is quite problematic that succession is regarded as one single decision that is to be executed at one particular point in time.

Often it is at least partly the fault of the business family that these situations are not solved properly. As highly emotional topics emerge – fair treatment, competences of children – families often taboo this topic. The situation then comes to a head and escalates. It seems to be more promising when succession is regarded as permanent process of reflection within the family.

 

The Witten Model of Corporate Succession within the Family:

The Witten model of succession describes a succession process as permanent process that exceeds the actual succession decision. The question for succession starts with birth and does by no means end with the transfer of responsibility to the successor. The course of this process can be divided in five typical phases. The duration of these phases is less dependent on time periods but more on the central topic.

Wiiten Model of Succession

A detailed explanation of the Witten Model for Corporate Succession within the Family is available here in the corresponding article from the magazine “Private Wealth” (German only).

 

WIFU-Knowhow: