Trust is the key factor in a successful leadership transition, says Corinne Klajda, Managing Partner Accord Polska / AltoPartners Poland.

When the economy opened up after the fall of the Iron Curtain in 1989, multi-nationals moved in. But that’s changed - small and medium-sized enterprises are now the backbone of the economy. These include family-owned businesses, many of which have now reached the stage where their owners are looking at retiring (or going global) and they need to think about succession.

“It seems straightforward, but it’s one of the biggest challenges that business-owners face,” Klajda says.

Even in large companies, it is not just an economic decision. The first line of owners are visionaries and they see these companies are their children. Because of that there’s complexity around who is ready to let go, and who is ready to take over.

“One option, which is the very straightforward one, is for people to just pass the shares to their children. And then those children are supposed to be ready-made successes. And very often, they might not want those shares, not just from a competence or capabilities perspective, but also from interest. They want to do other things. And this is where there’s a lot of challenges. Very often, this is where we get called in to try to find an interim solution.”

Klajda says the single most important factor in a successful transition is time – lots of it. ”It seems like a rational thing to solve. But there’s a lot of emotions.” She says boundaries need to be established. “And then we need everybody to work on their own self-awareness to understand why they are not able to find a solution. Once they find this, then it’s much easier. It also helps if the children go and do their own thing and then come back and take over. And if they go over to other industries or other businesses, when they come back, they are also more credible to the team.

Klajda is a huge supporter of family-owned businesses. “People ask me: if I had a choice to work in a family-owned business, or in a multinational, what should I do? I usually tell them, the brightest people usually come from a family-owned business. Because in a family-owned business, you have nowhere to hide. In a multinational, there’s a lot of silos, you don’t have to be the brightest, you will still manage to climb the ladder. People in family-owned businesses will have a much higher level of adaptability. And they are more rounded. They’ve been exposed to more.”

READ AltoPartners White Paper on succession planning in family-owned businesses