Why do companies often struggle with succession

Company succes­sion is a complex chall­enge for many owners, as it invol­ves both econo­mic and, above all, emotio­nal aspects. Many entre­pre­neurs post­pone the succes­sion decis­ion because they want to know that their life’s work is in good hands, but often fail to find the right solu­tion. Howe­ver, choo­sing a suita­ble buyer is crucial in order to preserve iden­tity, values and jobs. 

Conven­tio­nal opti­ons often entail rest­ric­tions: stra­te­gic buyers usually inte­grate the company comple­tely, which leads to the loss of the corpo­rate culture and often also jobs. Private equity inves­tors frequently change exis­ting manage­ment teams and often focus on short-term return targets that are not always in line with the inte­rests of the foun­ders. Search funds are usually inex­pe­ri­en­ced buyers with little manage­ment exper­tise and little flexi­bi­lity to adapt the tran­sac­tion to the speci­fic needs of the seller.

We take a diffe­rent approach: as an expe­ri­en­ced and long-term orien­ted inves­tor, we offer custo­mi­zed succes­sion solu­ti­ons. Through a prag­ma­tic, part­ner­ship-based process initia­ted at an early stage, Valerna ensu­res a struc­tu­red hando­ver, preser­ves the iden­tity of the company and, where possi­ble, supports inter­nal talent in their further deve­lo­p­ment in manage­ment roles. 

Many entre­pre­neurs unde­re­sti­mate the comple­xity of succes­sion and start the process too late. There is often a lack of long-term plan­ning, which means that the opti­ons are limi­ted when a succes­sion plan beco­mes neces­sary. A hasty decis­ion can lead to a sale below value or an unsui­ta­ble hando­ver that desta­bi­li­zes the company. 

Another criti­cal mistake is that many entre­pre­neurs view the succes­sion process as an indi­vi­dual decis­ion instead of seeing it as a team effort. — A successful hando­ver requi­res the early invol­vement of multi­ple stake­hol­ders: the family must be invol­ved in the stra­te­gic decis­ion, tax and finan­cial plan­ners help to opti­mize the struc­ture, and the board and manage­ment must be prepared to ensure a smooth tran­si­tion. A lack of coor­di­na­tion between these parties can lead to legal, finan­cial and opera­tio­nal hurd­les. In addi­tion, entre­pre­neurs must accept that this process is often unchar­ted terri­tory for them — profes­sio­nal advice and exter­nal support are essen­tial for a well-prepared succession. 

Many compa­nies lack clear struc­tures and proces­ses. The company is often stron­gly tail­o­red to the founder’s perso­na­lity, which means that important busi­ness proces­ses, custo­mer rela­ti­onships and decis­ion-making chan­nels are not suffi­ci­ently docu­men­ted or insti­tu­tio­na­li­zed. This makes it diffi­cult to inte­grate new manage­ment and can lead to uncer­tainty among employees and customers. 

Valerna offers a solu­tion for SMEs that avoids such mista­kes. Our team not only has the neces­sary tran­sac­tion expe­ri­ence, but also the opera­tio­nal expe­ri­ence to closely support this trans­for­ma­tion. Early plan­ning, a clear defi­ni­tion of proces­ses and respon­si­bi­li­ties and a tran­si­tion process based on part­ner­ship enable a smooth chan­geo­ver that takes into account the inte­rests of all parties invol­ved. Entre­pre­neurs not only receive a tailor-made succes­sion plan, but also the certainty that their life’s work will be contin­ued in the long term. 

A company’s iden­tity and culture are key success factors that have grown over deca­des and cannot simply be repli­ca­ted. We respect this and pursue an approach that deve­lops the company’s iden­tity in a targe­ted manner. A central element is close coope­ra­tion with the previous owners, manage­ment and employees. Instead of abrupt chan­ges, we are focu­sing on a gradual hando­ver that invol­ves exis­ting mana­gers and promo­tes inter­nal talent in a targe­ted manner. This inte­gra­tive approach makes it possi­ble to main­tain the exis­ting corpo­rate culture and at the same time provide new impe­tus for sustainable growth. 

In addi­tion, we deli­bera­tely remain as far in the back­ground as possi­ble in opera­tio­nal terms, but provide as much support as neces­sary with the help of our opera­tio­nal exper­tise. Ulti­m­ately, we leave the manage­ment of the company to expe­ri­en­ced teams who conti­nue to deve­lop the company under their own steam. Through tailor-made deve­lo­p­ment programs and targe­ted coaching, we ensure that exis­ting values and tradi­ti­ons are not only preser­ved, but also used as a basis for future success. 

Mirco Iwan and Markus Zejer­mann have been in the private equity market for more than 25 years with a focus on the Euro­pean Mittel­stand. Mirco Iwan was previously CEO and opera­ting part­ner of various port­fo­lio compa­nies of German family offices. Here he supported complex trans­for­ma­tion projects such as reor­ga­niza­ti­ons, buy-and-builds, carve-outs and inter­na­tio­na­liza­ti­ons. Most recently, Markus Zejer­mann worked as Mana­ging Direc­tor at a pan-Euro­pean invest­ment company and before that as a stra­tegy consul­tant for around 10 years. 

Both gradua­ted from the Catho­lic Univer­sity of Eich­stätt-Ingol­stadt with a degree in econo­mics and earned inter­na­tio­nal master’s degrees in London and Barcelona. 

www.valerna.de