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The Self-Renewing Enterprise: The Potential Success Offered by Corporate Succession

Steinbeis creativity workshop develops criteria for successful self-renewal processes

Two Steinbeis consultants, Martin Ritter and Günther Luber, have dedicated their expertise to the field of salvaging companies. At a creativity workshop held at the last Steinbeis Day they showed how important it is for a company to be able to reinvent itself. Working with a group of highly motivated workshop participants, the consulting duo pinpointed the principles, tools, and infrastructure a company requires to enable an “ongoing and directed process of self-renewal.”

The workshop participants saw a number of parallels to human stem cells, which possess an amazing ability to renew and repair themselves. The group realized that self-renewal is not just a one-off change process with the potential to enhance value creation and the appeal of a company. A process of self-renewal can become a key success factor and, if it can be systematically instilled within a company as an iterative process, it can even develop into a competitive advantage. During the workshop, the group worked up seven central aspects (see box) which all revolve around the same question: What can we do to establish an environment that allows the operational side of the organization to continuously renew itself as required? For self-renewal to become “ongoing and directed,” these aspects have to become systematically embedded within an organization as an iterative process. Of course, even by setting goals you already embark on the journey!

As more and more firms will face handover issues in the future, the team looked at the impact an ongoing and directed process of self-renewal can have on succession planning. Their answer: It will significantly raise the value of the business if – over and above the seven central aspects – the iterative process of self-renewal also looks at further factors.

Aspects that need to be covered include ways to consider the potential of a possible successor to “create confusion” within a firm, any investment plans, personnel decisions, as well as organizational changes. Describing his experience, Günther Luber said: “I took on three separate companies in succession in the past and handed them on to others. I made sure that any operational decisions I took considered the impact they would have on an imaginary successor. My business decisions were ‘ego-neutral’ and resulted in a more appealing company for my successor.”

Another essential factor is that employees are informed early about succession planning and that some kind of change communication is established. Managers should be involved in the succession process, but previous employees should also think about the different personalities of the successor and the predecessor in terms of values, attitudes, inner sentiments, attitude toward risk, how they deal with emotions, ability to cope with frustrations, communication skills, and leadership style. Successors should also be shown tolerance and be given enough leeway to “try things out for themselves.”

The self-renewing enterprise: ongoing and directed self-renewal

“For the succession process to pass off without friction, it’s especially important for the successor and their predecessor to explain their own intentions and emotions as part of an ongoing process of self-reflection. They should also keep looking at things from a macro perspective, so that the handover is safe and not tinged by conflict,” continues Martin Ritter, outlining the key prerequisite for a successful handover. Succession is thus also a chance to approach the process of self-renewal with an openness to new experiences; it has every potential to uncover new opportunities for the business and find different ways to make things happen. For successors, this entails installing a learning process that enhances their abilities and the skills of the company, underscores coherence between words and actions, engenders courage, promotes an ability to actively listen, requires people to be open-minded and unite, reflects credibility, and – assuming employees want this – allows successors to act as a role model.

The results of the creativity workshop speak for themselves. Nonetheless, both Steinbeis experts have more to offer in their repertoire. With their expertise in “ongoing and directed business self-renewal,” plus diverse experience thanks to a number of successfully completed takeovers and business succession processes, Martin Ritter and Günther Luber from the Steinbeis Consulting Center for Safeguarding Companies offer a variety of key skills that help companies move forward in the business succession process. As well as actively accompanying and supporting management successors and their predecessors, as highly motivated experts in sustainable and conflict-free business succession they offer a treasure trove of business skills.