Succession is a process, not an event

»We, the owners of family businesses, dedicate a great part of ourselves to our businesses. Our society will be only as strong as our family businesses will be strong and healthy,« Marjan Batagelj, the president of Slovenian Business Club, stressed at the end of  the roundtable »Generational opportunity – ownership transition in a family business,« held by Slovenian Business Club on 16 February at the Faculty of Economics in Ljubljana. The event has attracted more than 150 participants of all generations, who evidently recognised the meaning of this topic and the lack of answers to some key questions. »Our country is 25 years old and so are our companies. We set up our businesses with enthusiasm and passion. We have never thought about leaving trails. Our children are these trails too,« Batagelj explained at the very beginning and added: »If they do not want to take over our companies, this represents an opportunity for somebody else who does.«

Succession is a process, not an event.

At the outset TV presenter Uroš Slak, who ran the event together with Lana Batagelj, a member of Youth SBC and the main organiser and facilitator of the event, threw in the somewhat provocative thought that founders and owners of family businesses think they know what is best for their children. Maja Lotrič from Lotrič Metrology, where all three children work in the family business, stated that this is precisely why the responsibility of the successor who follows their parents into their family’s business story is huge, the pressure even bigger, often accompanied by tears in their eyes: »My primary wish is to prove myself to my co-workers. Our greatest concern is whether or not we are able to work as hard as our father. He is our best mentor. Our goal is to prove ourselves.« Namely, young entrepreneurs wish to show that they hold a position in the company because of their skills and not solely for being a family member. »At the beginning of your career, proving yourself in the company is quite hard. Once you form your team, it is easier for its members to trust you,« Nuša Pavlinjek, head of marketing at Roto group, said.

Lara Batagelj, already a well-established member of family business activities, no less provocatively remarked that parents who established the company have – as she stressed, rightly – »a big ego« and are very protective of what they have built. Consequently she wondered where is the best place for successors to learn about management: »Should they learn from their parents and through their family business from the start or is it better to develop their skills elsewhere and only then join the family business?« The participants’ stories are quite different and there is no universal answer to this question. Maja Lotrič thus never tried to work in some other company, but Carinthian Slovene Simon Rutar, head of strategy and marketing for the Rutar group, first gained his education abroad and worked in different companies for a few years. He finally joined his family’s company because he wanted to carry out a project in Italy, which he had learned a lot about since he had continued his studies there. This story is, as three years of work have shown, presently also the most successful one in the Rutar group, so the interim period spent outside the family business was obviously beneficial. Accordingly, Dr Marina Letonja, a senior lecturer at GEA College, advised the entrepreneurs to expose the potential successors to their family business as soon as possible, but also to encourage them to gain experience outside their company and to gain new knowledge, abroad too: »It is important that succession is planned in a timely manner and essentially with due care.«

Foreign entrepreneur and co-founder of the company Primo Aroma, Fabrizio Polojaz, otherwise incumbent president of the Caffè Trieste Association, stressed it is essential for parents to transfer the company structure, values and attitude to people, co-workers and customers alike, to their successors: »But only if this is their free choice and if they enjoy it. If they wish to continue in the same direction, they will have the structure, but if they don’t, they will have the capital and will be able to create something by themselves.« According to him, an extra condition is to respect the product. He conveyed this through the enthusiasm which one could feel while listening to him talking about coffee as the central »relic« of their family business. Vlatka Cikač, a lawyer from Zagreb, agreed that attitude towards the family’s business story is of special importance. She, among other things, runs a mediation office, but she is not a key member of her family’s business story: »It is crucial to keep the family in harmony and to stay connected, regardless of who works or doesn’t work at the company.« »A family business has its own identity and is above family,« she added and illustrated this with the thought that during Sunday lunches the company has its own seat at the table.

Polojaz too agreed that the key factor is good and constant communication within the family. »When I was 18, I was looking at our family business with great reluctance. When I changed my economics studies for language studies my father didn’t speak with me for six months. Then I opened my own company and after two or three years, family members came to congratulate me because they were pleased and happy for me. This is one of the best things that can happen.«

The event saw entrepreneurs of the first, second and third generation. But, as Batagelj stressed, we haven’t got examples and good practice of transferring ownership and management inside a family yet, as »Slovenian society hasn’t taught how to overcome this.« The participants agreed that »succession is not an event, but a process.« As long as it is by the successors’ own will and wish.