Client:
A manufacturing industry family-owned and managed business
Our role:
We advised our client on succession planning. We assisted the founder in acting decisively on the risks associated with a lack of leadership transition planning. We collaborated to deliver an ‘Owners Strategy,’ mapping out management changes relating to the NextGen of leadership.
Country:
Poland
Setting the scene
Consistently postponing succession planning was a source of frustration for family members who work in the company. This was also a potential source of negative business outcomes, such as uncertainty among employees and business continuity risks.
While family member successors and managers were involved in the day-to-day running of the company, all key business strategy and financial decisions were taken by the founder. The company was structured in a way that it was dependent on the owner, who was in their late seventies, for almost all leadership functions.
This decision-making structure did not consider the NextGen’s views on the future of the company, their visions of its development and the roles of individual family members. The leadership culture and structure were also seen by NextGen as a barrier to their professional development and to them building trust and authority.
How we helped
We initially conducted several individual interviews and collaborated with the family during workshops and moderated discussions. We posed thought-provoking questions about the future of the company. We also demonstrated potential scenarios and their pros and cons.
Crucially, we worked with the founder on the company’s future, making clear the need to engage NextGen. Once the founder showed readiness to share decision-making power and invite the NextGen to run the business together, the second generation started rapid development and proved to be very active and effective leaders.
Joint discussions and inviting the second generation to assume decision-making roles in the family business resulted in rising levels of trust and openness. Working together on the succession strategy has taught family members that cooperation and communication skills can help facilitate better understanding of individual aspirations and business goals.
"The CEE findings from our Global NextGen Survey reveal trust issues in family businesses, frustrating the NextGen. Younger successors, known for their dynamism and quick responses to challenges, prioritise trust issues as they increasingly control family operations. Family business founders should closely focus on succession planning, create a legal framework for NextGen taking leadership roles and perhaps most importantly, embrace NextGen’s potential."
Jacek Pawlowski, PwC Partner, Succession Advisor, PwC Legal PolandImpact and potential
Apart from changes in company culture, the main output from the work is a co-created Owners Strategy. This is a common vision of:
The company's strategic development.
Changes in the business model necessary for the implementation of the strategy.
Agreed roles of the family and key managers.
A framework for amending their changes in the future.
Specific steps regarding the transfer of ownership and management of the company.
Setting of development goals for the successors and business goals for the company.
Communication plans and process mapping for implementing changes.
Once these changes were implemented, the founder shared decision-making rights with successors who took over other important roles within the company. The founder freed time to get more involved in supporting business and regional associations and develop some environmental social governance (ESG) focused projects in the company.
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