Succession is a difficult topic

Family businesses are an important part of the Polish economy. As reported in the media, it is estimated – depending on the research method used – that family businesses account for 20% to as much as 70% of all private entities in Poland (850,000 to 2.7 million). They generate between 10% and 85% of Poland’s GDP and create between 1.3 and 8 million jobs[1].

Companies in this category – family businesses – are most often well established in the local business environment. They have spent years building their potential and their brand, and they have a good and reliable financial history. At some point, they face the two most important issues in their development: succession and continued growth.

In some cases – and these are by no means isolated incidents – successors, if there are any, do not want to take over the family legacy and continue building the family business. This is what happened to the Solaris bus factory, which is now owned by the Spanish, and the Kamis spice company, among others. Already in 2018, Professor Jan Klimek, an expert on family businesses at the Warsaw School of Economics (SGH), said that the problem of a lack of successors in Polish companies has become widespread. Only 25% of family businesses survive the first generation, 7-8% the second and only 3% the third. In the end, companies often simply close down. In Europe, about 600,000 jobs are lost every year due to the lack of successors. Six years after this diagnosis, studies show that the problem has not only not diminished, but has even worsened. A study published by the Family Business Institute in October 2002 showed that only one in three family businesses succeed in finding a successor, and only about 15% of them make it to the third generation[2]. 

Meanwhile, according to a report on succession in Polish family businesses prepared by the team of Bank Pekao SA, the life cycle of Polish private companies is now entering a sensitive phase – the first generation of their owners is just preparing to retire. In addition, unlike in Western European countries, where family businesses have been operating for several generations, in the vast majority of cases the process of passing the baton to successors will take place for the first time. A lack of effective succession, banking experts stress, could lead to a slowdown in the development of these companies and, in many cases, to their resale to foreign capital. This, in turn, does not seem to be an optimal solution, taking into account the overall economic interest of Poland.

Another passage from the aforementioned study is worth mentioning. According to the authors, one of the most important obstacles to traditional succession is the actual unwillingness of successors to take on the responsibility of running the business. 85% of potential successors do not want to run the family business in the future. This is a very different position from that of the doyens, about 80% of whom would like their successors to run the family business in the future. On the other hand, 60% of them believe that their children are not yet competent enough to do so, for various reasons[3].

During last year’s Industry 5.0 conference, held as part of the EXPO KATOWICE International Fair, Szymon Trzebiatowski of the Family Business Institute argued that family businesses should not be reduced to mere numbers and shares in job creation or GDP. We shouldn’t forget that it is first and foremost the decades of work of one, sometimes two, people who have painstakingly built up their companies step by step and now want them to survive and not be covered in ashes and dust.

There is no one-size-fits-all approach to the succession process. Everyone is different and requires a different approach, and this is what we want to talk about during our April conference “Modern Woman – Leaders of the Future”.