Pilot action in South Bohemia region, Czechia
The pilot action in South Bohemia region aimed on how to change behavior, safeguard interest, stronger involvement and finally commitment of young descendants to take over the family business instead of opting for an external job which offers financial stability.
To fulfill the aims of the pilot action, Czech project partners have visited representatives of family businesses in Southern Bohemia which have successfully finished or are in the process of intra-family business succession. Both, the owners and the descendants were interviewed separately to allow comparison of perspectives between the two groups.
The visits to the companies were information-rich and, in many ways, enlightening to all participating team members. The respondents covered a wide variety (socio-economically, demographically, etc.) of persons. For example, in one company, the team surveyed a retired couple in their mid-90s who already passed their business to their grand kids. In another company, the team surveyed a group of owners and group od successors – a situation which resulted almost in company paralysis, as the young generation does not have the same grounds as the founding fathers. In general, the interviews were very deep and quite exhaustive (some interviews were almost three hours long) and were very beneficial not only for the project but also for our teaching endeavors.
The most important conclusions from the interviews are summarized below:
The most important factor for both, owners and successors, is to build a sense of trust in the successor that the owner believes the successor can manage the company (at least several years before the start of the company transfer process) social-emotional empathy mentioned several times.
The owners must communicate their intentions to transfer the company formally (i.e. documented by a report from family councils – if any).
Both owners and successors reported the importance of assisting the successors during min. one year after transfer as „self-evident“ (even though the reality lags behind proclamations).
The owners and successors had contradictory perceptions of the importance of a family council Successors - the second most important factor. Owners - one of the least important factors.
Owners declared just a little importance that the company being transferred will continue to provide financial support and benefits to the owner; for the successors, financial “safety” is a key value.
The least important factor on average, the owners and successors selected the existence of a family constitution that declares the main principles of the company management – even though the family council and constitution would be a key prerequisite to solving all the major issues in business succession mentioned by both groups.