Ready for business succession

Taking over a company, whether within or outside the family, brings a variety of challenges with it. “At the outset, we had to find our bearings in terms of managing the business, understanding the market and maintaining client relationships at the same time,” says Nicola Tettamanti. The new CEOs were just 23 and 25 years of age, respectively, upon taking over the business. “As young and eager as we were back then, we first had to gain a certain amount of respect. Those who remained loyal to us, however, including employees, business partners and clients, quickly realized that we were sticking to the company values, meaning a culture shock was averted.” During the financial crisis in 2009, the two young CEOs nevertheless had to rethink their business model and adjust the firm’s production processes. While a challenge, this would ultimately strengthen the company and their own roles as CEOs and owners.

For Martino Piccioli, a clear vision of the future is key to the takeover process. “There are various ways in which a company can continue to be run, with family members taking on more or fewer operational tasks. It is important that all family members who are involved in the succession process are transparent,” he opines. This includes careful consideration of governance and tax aspects, as there are several pitfalls here that should not be underestimated in terms of their impact on the business and the person interested in continuing its activities. In family businesses, it is also important to clearly define roles: what is best for the owner family, for the owners themselves and for the company? “Good relationships and open communication are crucial for success. In the case of large families, in particular, organization and clear rules can help to avoid conflicts.”

The takeaway: careful preparation and clear visions are crucial for the business’ future. The challenges posed by a business takeover can be overcome through transparency, clear rules, a willingness to adapt and open communication.

There are various ways in which a company can continue to operate. It is important to examine all options.

Martino Piccioli, President of the Board of Plastifil

Martino Piccioli believes that business succession within the family offers clear advantages: “Family members are generally heavily involved and embody family and company values in a natural fashion. Clear values and ideas facilitate both integration and acceptance,” he explains. “And they create a solid basis for the next generation.” His grandfather was a modest and respectful teacher for the entire family. “He headed up the business for several decades and always showed great respect towards his employees. He was humble and never raised his voice to make himself understood. While these are simple and not overly complicated values, they bear fruit during the course of our daily work and shape our corporate culture.”

Values, as the company's DNA, are also pivotal for Nicola Tettamanti. Although he and his brother are not always of the same opinion, they are quick to agree when it comes to important business decisions. A deep foundation of shared values, which their father played a significant role in establishing, often allows them to communicate with no more than a single glance. For Nicola Tettamanti, it is hard to imagine how a business that fails to continuously adapt to changing circumstances could be successful. Consistent and shared values are vital for ensuring stability and setting a clear direction for the business to take.

The takeaway: shared valued create a solid basis, facilitate integration and acceptance and ensure stability.

Consistent and shared values are vital for ensuring stability and setting a clear direction for the business to take.

Nicola Tettamanti, CEO of Tecnopinz

Despite all the advantages of a family buyout, Martino Piccioli believes that it is not primarily whether a successor comes from the family or not that is important, but rather whether they possess the right skills. “It can be a mistake to appoint someone unsuitable from within the family ranks,” he explains. Good team skills are crucial, as you can't solve problems on your own. The ability to interact with others and a certain level of leadership qualities are likewise important. It also helps to talk with people who see the company from the outside. After all, learning together and thinking as a group are also valuable to those who are not part of the family.

Nicola Tettamanti adds: “A good entrepreneur has asked themselves the right questions in advance: Am I capable of taking on this task and is it really what I want in life? Do I have the right people around me? And who else will my decision impact, how will it affect my family life, for example? You have to consider a lot of things and have a clear plan – and you always need to be aware that this is a long-term decision.”

The takeaway: a successful successor has the requisite skills and asks the crucial questions in advance.

How can an entrepreneur optimally plan their succession strategy? Martino Piccioli emphasizes the importance of early preparation: “It is important to prepare the ground for the next generation in good time. You have to understand what individual people want and the plans they have, and plan accordingly.” Objectives should be defined at an early stage and the future generation should always be taken into account. Small steps and long-term plans are vital. This preparation begins in childhood when children or grandchildren learn to play and interact with one another, just as they get to know the business in a playful manner when they visit it.

Early succession planning is also an essential factor for Nicola Tettamanti. The earlier your prepare and ensure that all the requirements are met, the better. While early planning can be challenging, it delivers positive results in the long term. “Timing is key,” he says. “And it is imperative to check whether all economic requirements are met and that the skills and resources for successful succession are in place.”

A further keyword: trust. “From day one, when we took over our father said: ‘Now you make the decisions.’ He knew how we were coping and the direction we wanted to take, but he didn't interfere,” recalls Nicola Tettamanti, “Instead, he would say: ‘It’s your turn now, you have my trust. I’m here if you need advice.’ This attitude was a great benefit for us.”

The takeaway: succession processes within a family often take longer than other takeover options. This makes early and careful planning all the more important. The timing has to be right and all economic and personnel requirements should be met to ensure the transition is successful in the long term.

Timing is key. It is important to check whether all economic requirements are met and that the skills and resources for successful succession are in place.

Nicola Tettamanti, CEO of Tecnopinz