The 5 success factors for succession in family businesses
Succession in family businesses is one of the most difficult and sensitive stages in the life of a company. In Romania, over 70% of family businesses are led by founders who are approaching retirement age. However, only a small part has a clear transition plan for the new generation.
Why is succession so complicated? Because the stakes are multiple. For instance, business continuity, maintaining founding values, protecting family relationships and preparing successors. Everything takes place in a charged emotional context, in which personal expectations, pride and fears about losing control or the ability of the successors intersect.
Without a structured and proactive approach, the transition risks failing. Here are five key factors that can make the difference between a successful succession and one that weakens the business or even leads it to collapse.
1. Early and clear succession planning
An effective succession plan starts many years before the moment of handing over the baton. It is not an event, but a process. Founders need to decide in advance: who will take over?, what skills are needed?, what transition period is realistic?
Planning should include a clear training schedule, an objective assessment of potential successors, a delineation of roles between generations
Here is an example: a family business in the field of industrial distribution established its successor 10 years before the founder retired. During this time, his son worked in every department of the company, attended an EMBA program and was involved in strategic decisions.
The transition went smoothly, and the business continued to grow. Planning prevents decisions made under pressure and provides time for corrections and adaptations.
2. Gradual involvement of the new generation
The success of a succession depends on the preparation and real involvement of the new leaders. Many founders postpone this process, for fear of losing control or due to a lack of trust in their successors.
Gradual involvement allows the young people to: understand the company culture, gain the respect of the team, and assume real responsibilities, step by step.
It is essential that the new generation are not just “the boss’s children,” but capable, professionally validated leaders. Working in other companies before entering the family business helps to form an independent perspective and self-confidence.
3. Open communication within the family
Succession can reveal differences in vision, sibling rivalries, and accumulated frustrations. Without honest and frequent communication, conflicts can degenerate and affect the business.
Here are some of the essential questions that need to be discussed within the family: who will have executive roles and who will remain just a shareholder? How will the final decision be made in case of disagreement? What happens if a family member is not suitable for management positions?
Clear communication prevents misinterpretations and avoids tensions. Sometimes it is useful to mediate with an external advisor, a business consultant or a specialized coach, who can facilitate the dialogue and provide an objective perspective.
Another important element: decisions must be documented. A succession protocol, even informal, clarifies expectations and limits the risks of conflict.
4. Clear separation between family and business
To have a successful transition, it is essential to separate family relationships from professional ones. Clear governance rules help with this separation: family members do not automatically enter management, access to positions is based on merit, roles on the board of directors are different from operational ones
A good example here is that of an agribusiness company that introduced written rules for hiring family members: a minimum of 3 years of experience in another company and an independent external assessment. The result? A more professional management, less affected by emotional influences.
In addition, the professionalization of management, by recruiting managers from outside the family, contributes to stability and performance. The family can remain in strategic roles, without monopolizing the operational side if it does not have the necessary skills.
5. Preserving and adapting founding values
Succession does not just mean a change of leaders, but a profound transformation of the way the business operates and relates to the market. Each generation brings with it its own vision, its own aspirations and a different leadership style.
However, for the business to remain solid, it is vital that the fundamental values that led to success are preserved, cultivated and reinterpreted in the new contexts.
How is this adaptation done? First, identify the core values: integrity, customer orientation, quality.
Second, discuss with the new generation of leaders how these values can be applied in today’s reality, marked by accelerated digitalization, sustainability requirements and intense global competition.
Third, create mechanisms through which these principles can be transmitted to new employees: mentoring programs, inspirational stories from the company’s history and clear examples of desired behaviors. Only in this way, continuity becomes strength, not fragility.
In conclusion
Succession is a test of maturity for any family business. It is not just about who takes the reins, but how the vision, organizational culture, and strategic direction are maintained as generations change.
Successful transition requires a structured process, honest communication, clear rules, and openness to change. There are no universal recipes, but the success factors are known and tested. Those who apply them increase the chances of continuity and sustainable development.
For founders, it can be difficult to let go of control, but building a future for the company and family means precisely this ability to prepare and support the next generation. And for descendants, assuming responsibility involves not only rights, but also a lot of work, learning, and balance.
Florentina Șușnea este Managing Partner în cadrul companiei PKF Finconta. Experiența ei profesională de peste 26 de ani cuprinde domeniile de audit statutar și IFRS, consultanță fiscală, probleme de rezidență fiscală, restructurare financiară și fiscală, documentație și politici de Transfer Pricing, fuziuni și divizări, M&A, expertize judiciare, contabile și fiscale, due diligence de achiziții. Florentina este membru acreditat al următoarelor organizații profesionale: Camera Consultantilor Fiscali, Camera Auditorilor Financiari din România, Camera Expertilor și Contabililor Autorizați din România si Association of Certified Anti-Money Laundering Specialists. A absolvit Facultatea Finanțe-Contabilitate din cadrul Academiei de Studii Economice, București, Facultatea de Drept din cadrul Universității ”Titu Maiorescu”, programul MBA de la Tiffin University din SUA, este doctor în economie și a urmat numeroase cursuri naționale și internaționale în domeniul fiscal. florentina.susnea@pkffinconta.ro
