Generational passage to family companies
From the latest ISTAT census of Italian companies, it emerges that 75% of companies are controlled by a natural person or by the family, and most of them are Small and Medium-sized Enterprises (SMEs) with a number of people ranging from 3 to 49.
Only 8.8% of family businesses have already been interested in the generational handover in the years 2013-2018, while for 11.8% it is expected in the period 2019-2023, with a pace of 42 transitions per day of companies between generations of entrepreneurs (data from November 2020).
More than half of companies controlled by individuals or families report the presence of these main obstacles:
- bureaucratic, legislative and / or fiscal difficulties (16.9%)
- the absence of interested and / or qualified heirs or successors (16.9%)
- complications in transferring skills and / or contacts with customers and suppliers (14.0%)
- economic and / or financial difficulties (13.5%)
- family conflicts (4.6%)
The lengthening of the average life span makes the presence in the company of family members of different generations more and more likely, with a different vision of their life and approach to work (read also my article The Value of Values in intergenerational changes – The Deeping), making it difficult to find the optimal combination between family, heritage and business.
First of all it is necessary to distinguish the succession of ownership of the company, which occurs by inheritance, and the succession of management of the company which “should” take place by merit. Furthermore, it should be considered that:
- more than 65% of family businesses have at least 3 partners, who in turn have at least 4 heirs, so the difficulty of finding an optimal balance becomes exponential
- only 30% of family businesses survive the founder and only 13% reach the third generation.
The generational “continuity” of family businesses in the case of heirs is a process of planification that requires time and resources and can be facilitated by four conditions:
- distinguish the company from the family and consequently distinguish family affective relationships from work relationships and professional and managerial skills with respect to the adequacy of the company roles to be filled
- establish clear rules (statutes, family agreements and shareholder agreements), to be updated periodically according to changes in the company and the family, to avoid stand-offs and conflicts
- sharing Values , vision, goals and action plans
- be supported by external actors
As for external actors, in addition to technical professionals such as managers outside the family, business consultants, accountants, lawyers and ” wealth planning” for good wealth planning, the figure of a Business Coach is important.
What is the support of a Business Coach in a process of generational handover?
- Listen actively, true and non-judgmental
- facilitates mutual openness and listening between the people involved in the process
- it facilitates the identification of personal values and the relevance to those of the company
- stimulates a conscious analysis of the state of the art of the company
- stimulates openness and the comparison of needs, desires and different points of view, so that they are oriented to the solution and not to the problem
- facilitates understanding between the different generations present
- supports the incoming generation in the development of transversal skills to improve their management capacity in anticipation of the definitive “passing of the baton”.
Author: Valentina Reiner
Valentina Reiner is Certified Business Coach (CBC™) by Worldwide Association of Business Coaches (WABC), European Individual Accreditation (EIA) Coach/Mentor at Senior Practitioner Level by European Mentoring and Coaching Council (EMCC), Neuromanager Positivo Applicato (NPA®) by Apprendo Academy
Sources:
Confartigianato Imprese, Flash Processing, November 2020
The Listening Cricket, Giacomo De Candia
Forbes, 27 .07.2021 How to face the generational change in the company, by Alberto Martini, director of wealth management of Mediolanum bank https://forbes.it/2021/07/27/come-affronto-passaggio-generazionale-impresa/
Forbes, 3.02.2022 More and more companies rely on external managers to face the generational change in the company. From the hybrid event at Bocconi on 25.01.2022, PRESENTATION OF THE AUB XIII OBSERVATORY, speaker GUIDO CORBETTA “AIDAF-EY” Chair of Family Business Strategy in memory of Alberto Falck, Bocconi University https://forbes.it/2022/02/03/imprese-familiari-manager-esterni-affrontare-passaggio-generazionale/
