Family businesses are one of the most challenging issues both in practice and in the literature. It is observed that the successful transition to the third generation is around 6-10% in world statistics, and Japanese companies and longstanding European companies tend to have more successful transitions. The Japanese Kongo Gumi company has been in existence since 578 AD but became part of a larger group in 2006. In this regard, the common characteristics of successful companies can be summarized as focusing on the core business, values, and corporate governance principles rooted in tradition.
There are many factors for the management and success of families and family businesses. However, if we focus only on the successful transition to the next generation, complex issues arise. Nevertheless, addressing these issues methodologically within a system can both eliminate complexity and achieve the desired order. Practices such as alignment of principles and inspiration for the future, consensus on vision and strategies, selection and guidance of successors, establishment of corporate governance according to the family-shareholder-director relationship, and planning the stages of transfer are necessary. In this context, the work of the Family Council, acting based on merit and skills, maintaining balances, demonstrating transparency, good communication, and experience-based approaches would be beneficial. To carry out all these in harmony and ensure objectivity, obtaining services from a third-party expert institution is also possible.
Planning for the future is an inherent human phenomenon; families are obliged to act not only considering the future of the business or company but also taking into account the future of family members. Here, the roles of family membership, shareholder, director, and employee mustn't confuse an individual's mind. Otherwise, implementing the approach described above in a healthy manner becomes difficult, and efficiency decreases. Understanding the difference in roles and hats and being able to act accordingly is crucial for the culture of a family business.
In the end, everything starts with people. By creating a healthy transition plan, you can distance yourself from stress and work more motivatedly for your vision.
Dr. Bilinç Dolmacı
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