Dusseldorf They don’t like the term external manager. Managers from outside the family prefer to refer to themselves as “election managers” – just as one speaks of elective relatives whom one has chosen in contrast to one’s own relatives.
Regardless of the name: More and more family businesses are no longer run by the family members themselves. And because internal succession is no longer a matter of course, especially in larger companies, the chances of external candidates getting to the very top increase.
In the current follow-up study by the Family Businesses Foundation, more than 60 percent of the successors see mixed teams of family members and external managers at the top, almost 24 percent even see management by external parties alone. Family-controlled companies represent 90 percent of companies in this country and employ far more than half of all employees.
In order to share their experiences, 15 non-family managers have now come together to form a network: the “Stewardship Society”. They include, for example, Ritter Sport boss Andreas Ronken, the long-time CEO of the medical technology company B. Braun, Heinz-Walter Große, and Hanns-Peter Knaebel, who recently switched from the plastics manufacturer Röchling as CEO to Biotronik, a specialist in cardiological devices.
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The heads of the company Marc Konieczny and Marc Viebahn have come together. Both are managing partners of the Düsseldorf personnel consultancy Interconsilium. Together with the CEOs, the initiators have also developed their own “Code of Conduct for Family and Foundation Companies”.
Co-initiator Konieczny says: “We keep seeing candidates who consider work in a family company to be a purely management task.” But this approach falls short. “The management of a family business goes far beyond the good manual management of an organization.”
But how does an external manager become a successful head of a family business? Six bosses and advisory boards have given the Handelsblatt their most important pieces of advice.
Advice 1: do a culture test
Ritter Sport boss Ronken recommends taking a close look at the culture of the family business. “You are only right if you really share family values.” Ronken came from Mars to Ritter. He was attracted by the topic of sustainability: “The company’s own cocoa plantation in Nicaragua is very important and sustainable for the future of the company, but it would certainly not have arisen in a listed company and would not have been financed by every bank.”
It must be clear what the goals of the entrepreneurial family are. According to Ronken, these are not necessarily the ones against which you are measured in other companies. “Anyone who really wants to see what he or she moves is at the right place in a family business” – at least if you also lend a hand.
Advice 2: show entrepreneurial courage
“Courage and humility are equally important,” says Viebahn consultant. External managers would have to accept that they “will never belong to the family and that there is something bigger with the company”. Accepting that is not a weakness. Rather, not belonging to the family could be a strength “because it gives independence”.
At the age of 43, Mike Bucher is the youngest member of the “Stewardship Society”. Nevertheless, he has already gained 20 years of experience in family businesses, and has been CEO of the Austrian construction company Schöck for a good year and a half. He has just promoted a young executive and given her the code to read.
The CEO of the Austrian construction company Schöck says: “The owners want us to be entrepreneurial.”
He stated: Many younger employees are not even aware of how important the moderating role of management is towards the owners. Although the owners have the last word, you have to insist on your independence, advises Bucher. Young managers in particular believed that the owners would decide. But: “The owners want entrepreneurial courage from us.”
Advice 3: start in a medium-sized company
Birgit Felden is a professor at the HWR Berlin, management consultant and advisory board member. She recommends university graduates who want to pursue a career in family businesses “to look for at least a medium-sized one”. Whether you apply for the traditional way as an assistant to the management is advisable if it runs like a trainee program. If not, applicants should better join the team or group management, advises Felden.
Applicants should avoid businesses in which owners wanted to decide everything themselves. “As management and as an advisory board, you don’t have a chance,” says Felden. The expert estimates that around a quarter of family businesses are structured in such a patriarchal way.
She finds the new “stewardship society” code useful. Felden has experienced often enough that when it comes to appointments to the management board, shareholders make gut decisions and do not have a clear concept. The code also helps in the most common case when the founders move directly to the chairmanship of the supervisory board and choose a weak CEO. “That usually ends with the CEOs leaving quickly,” she says. “Anyone who clearly defines the roles in a code can also insist on it.”
Advice 4: take shareholders seriously
For Claudia Leimkühler, member of the advisory board of the pharmaceutical company Merz, respect and attitude towards shareholders are particularly important. “Regardless of the background of shareholders, they have to be taken seriously and picked up.”
A lack of empathy or even arrogance would prevent successful cooperation, says Leimkühler. “But surprisingly, not all external managers are aware of this.”
Advice 5: Be an advocate for the company
Biotronik boss Knaebel has spent his entire professional life in family businesses. He sees himself as “the company’s advocate” towards the owners. “If I make the company successful, then so are the shareholders – it is not necessarily the other way around.”
Above all, this requires intellectual independence and entrepreneurial courage, says Knaebel. “Anyone who does not bring this with them is wrong in family businesses, but those who are not allowed to implement it have to turn their backs on the owners.” That was also stated in the code.
Advice 6: Look for the best combination for each type
Thomas Borst, former head of security at the EBM-Papst Group and today a member of the supervisory board, advises above all to follow one’s own convictions, especially when there are conflicts between family lines. This is “more promising than looking for closeness to a tribe”.
For the B. Braun manager, the most important question is: “Which role is the right one for the external manager?”
(Photo: Employers’ Association HessenChemie)
For B. Braun’s long-time manager Große, the most important question is: “Which role is the right one for the external manager?” If you wanted to determine everything, you might not be able to cope with the owner’s last word. If you are too humble, you may not be taken seriously.
“I was always able to express my opinion openly, but I didn’t always get my way, but I could live with that,” summarizes Braun, who as CEO took over responsibility from Ludwig Georg Braun and then handed it over to Anna Maria Braun.
For adults, it is the best form of cooperation when family members are also involved in operational management. “Then they can take over part of the communication in the family.”
More: It is good that more family businesses are installing advisory boards. But they have to become more professional – and take three important points into account