A generation change has many dimensions and issues at its core – and often includes sensitive elements. The starting point is to ensure that a new generation within the family has the right prerequisites, is prepared for and is interested in, taking over ownership and everything that goes hand in hand with that. If this is not the case, the issue needs to be addressed and dealt with professionally, both for the company and the owners’ sake.
Is the new generation prepared for and interested in assuming responsibilities as an operational owner? If the answer is yes, what is the timeframe for addressing this question? One important issue is to distribute ownership according to a given and fair model between children and cousins etc.
Another question however, is which members of the family are meant to eventually take over senior positions in the company? Do these people have the essential attributes for the task and the challenges ahead? Is there a long-term education/training plan for these people, both in terms of academic knowledge as well as growing into the role and the tasks that lay the foundations for taking over the role of CEO or chairman in the long term?
What happens then if there isn’t a new generation? What happens if the new generation either doesn’t want to take over or doesn’t have the right prerequisites to take operational ownership? Should you continue as an owner, but then choose to appoint external members as CEO and Chairman of the Board?
If so, how does one ensure that there is a value-based platform for the corporate culture – a platform that has probably grown over several years and is part of the company’s DNA? Last but not least, is there is a clear ownership directive describing the goals and framework the owners want the Board and CEO to operate from?
Or, should you plan to change ownership – in whole or in part – to a new external owner insofar as you do not feel that the family and/or family’s relatives are the best long-term owners of the company? If so, there is much to gain from formulating an ownership strategy that focuses on a future ownership change. This strategy should aim to provide the scope for planning and preparing a change of ownership to a new external owner in the best possible way.