The Heart of Family Business Succession: When "Just a CEO" Won't Cut It

The Heart of Family Business Succession: When "Just a CEO" Won't Cut It

The Succession Dilemma

I recently talked with the owner of a large family-owned company about succession planning. Over coffee, he said: "After three generations, I'm facing what many of us eventually do—none of my children want to take over the business."

Then we discussed options. The conversation quickly turned to why family business succession is just... different. It's not your typical C-suite replacement scenario.

"After three generations, I'm facing what many of us eventually do—none of my children want to take over the business."

The Emotional Weight of Legacy

And I get it. When you've poured your whole life into a company, or inherited it from your parents who started it in their garage, finding "just a CEO" doesn't cut it. It's emotional. How do you hand the keys to an outsider and trust they won't trash what makes your company special?

Finding "just a CEO" doesn't cut it.

The Hidden Champions Phenomenon

What fascinates me about Austria and Germany is just how many of these family companies we have. They're everywhere, more than almost anywhere else. Many are incredible "Hidden Champions" – companies virtually nobody's heard of that somehow dominate global niches. And many of them are wrestling with this same succession headache.

Beyond Business Metrics: Understanding Company Soul

Some time ago, we were faced with a succession scenario in which the owner had rejected a number of perfectly qualified candidates because "they just didn't get it." Get what? The fact that Christmas bonuses have never been missed, not even during the 2008 crisis. The fact that everybody knows which employees need to leave early on Thursdays for their kids' football practice.

"I need someone who'll treat my people like I do," he told me. "Someone who gets that half my team has been here their entire working lives." And he continued: "Our customers have known my father, then me. The new leader needs to maintain that connection."

"Our customers have known my father, then me. The new leader needs to maintain that connection."

The Right Fit: More Than Qualifications

The right external leader needs to understand they're joining something closer to a family than a corporation. They need to respect long-standing values while still bringing fresh perspectives. Transitions like this will not work when the focus is solely on business metrics. The new leader will need to understand the company's soul – what makes it unique beyond the numbers.

The new leader will need to understand the company's soul – what makes it unique beyond the numbers.

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ABOUT THE AUTHOR

• Marion Heil is the founder and managing director of Board+CEO Advisors. She is based in Vienna.