In family run companies, the search for a successor is usually not as simple as it might be expected. It would typically be expected that the son, daughter, or the grandchildren would take over any management positions, but the fact that entrepreneurial expertise is paramount for a succession means that a follower from within the family isn’t necessarily the best choice.

At the current time, many family run companies are required to adhere to the question of succession. According to the KfW, 13,7% of all small and medium-sized firms are looking for a new management employee by the year 2022. Naturally, the preference is to choose someone from within the family.

Factors that play an essential role in succession include both the educational background and personality, with associated leadership ability. Beyond this, candidates also need to have a general interest in taking over any position.

To provide for objectivity in the selection process, it is advisable to assign an external party to find the best candidate for the company management. This involves the creation of a profile including the desired competences and personality characteristics that the candidate must fulfil. These methods are used in order to support the management board through all the stages of the selection process and can deliver key input for the decision-making.

In addition, it is advisable that founders in particular already address the subject of succession several years before the handover, in order to accept that the company needs to be passed on at a specific point in time. For family companies especially, this process is an emotional one, which is why preparation is a key factor.