Five success factors for the transformation of family businesses
The transformation of medium-sized family businesses is a recurring and challenging task. Due to the generally close connection between family and company, they develop a special structure and culture. Family businesses are extremely heterogeneous in terms of their structure and size: they range from small craft businesses to globally active organisations.
This leads to different challenges in the implementation of transformation processes. While small family businesses benefit from their flexibility and proximity to the market and may still be operationally owner-managed, larger companies have to introduce more complex, formal structures that are similar to those of non-family-run groups. In these cases, the owners often take on a supervisory role, e.g. on the supervisory board, in addition to an external management function. This article focuses on larger family businesses with external management but a strong family role.
Based on our experience over the last 20 years with family businesses of various sizes and stages of development, we can identify some recurring patterns: The diversity of stakeholders presents a particular challenge. The owner family, external management, long-standing managers, employees, works council and possibly advisory board sometimes have very different interests, loyalties, value orientations and perspectives that need to be integrated into the transformation process.
In contrast to listed companies, medium-sized family businesses often weigh up the risks they take even more carefully. The family's perspective on the company as a long-term investment, which is often fuelled by equity, influences the speed and scope of the transformation.
Family businesses are generally characterised by a long-standing tradition of doing business. These principles give rise to values that have characterised the working reality of every employee over a long period of time (e.g. "loyalty to location", "uncompromising quality" or "social responsibility"). It is therefore essential to always keep tradition in mind when designing change programmes and to link the next stage of the company's development to it.
Owner-managed family businesses attach particular importance to a high speed of implementation and pragmatic action. If the owner wishes, decisions can also be made outside of the regular reporting lines and processes. However, this can in turn represent a hurdle for further scalability.
To read this article in full, please subscribe to the 03 | 2025 issue of the Zeitschrift für Organisationsentwicklung with a focus on change in family businesses.
