According to the IfM Bonn [German institute for research into SMUs] between 2014 and 2018 approx. 27,000 companies will be looking for a successor in Germany every year. Only just over a half (54%) of owners hand their companies on to their own children or other family members. A further 29% of companies are handed on to external managers or other interested parties. Approx 17% of family businesses hand on the business internally to members of staff. However, over a third of entrepreneurs have problems finding a suitable successor.
There are numerous reasons why only about a half of family businesses continue to be run by the family. Some children do not have enough interest in the company, they lack the skills to lead a company or their parents cannot let go of their leadership responsibilities in the company. It is sometimes the case that the parents do not have enough confidence in their children or that family quarrels endanger the survival of the company. Nevertheless a corporate succession can also work very well as can be seen from our family business Rullko.
In 1923 Carl Rullkötter, a trained trader, opened a grocery wholesalers in Hamm together with his wife Elly. In 1973 his grandson Carl-Dieter Ostermann joined the family business and took over the management a few years later. Today Rullko is among the leading companies in North Rhine-Westphalia and is specialized in supplying food to nursing homes and hospitals. In 2006 I, Carl-Dieter Ostermann‘s eldest daughter Marie-Christine, joined the company as managing partner. Since then my father and I have managed the company together: a company which today has an annual turnover of approx. 75 million euros and a staff of approx. 150.
Voluntary succession without pressure from parents
When I was only 16, I told my father that I wanted to be the fourth generation to run our company. The company fascinated me even then probably because my parents never put pressure on me to force me to take over the company later. Instead, they told me that I should do what I was interested in and what made me happy.
I was able to fulfil my childhood wish at an early age and joined Rullko as managing partner at the relatively young age of 28. As my father called me into management from the very beginning and also made me a partner immediately, a clear signal was given to staff and business partners that I am not a colleague but the boss who will run the company in future. This clear message facilitated my appointment within the company even though it is often a challenge to change old established procedures and to convince the senior partner of new ideas. I reach my targets not only by being patient and having a lot of empathy but also thanks to my tenacity, drive and determination. For example, it took several years of hard work to persuade my father that our fresh meat division, which had been leased out for decades, would be better run by ourselves. Eventually I was able to convince him and today’s figures show that my decision was the right one. It is gratifying that my father, looking back, is pleased to openly admit that the changes were necessary and that today we are well-positioned in the fresh meat sector.
Systematic preparation for a future role in the company
All in all the succession process in our company has been very harmonious. One reason for this is that, since my Abitur [university-entrance qualification], I have been systematically preparing for my future role. I trained as a banker at the Commerzbank and then went on to study Business Administration at St. Gallen University. My studies, of course, also included periods of time abroad and placements. After that I worked for the discount supermarket Aldi Süd as divisional manager. The theoretical and practical experience I gained during my time at Aldi gave me the best background for my new job as managing partner as I really got to know all processes in the food business from scratch. When I first joined the family business, I followed an induction plan which I tailor-made for myself based on the Aldi induction plan. This plan took me through all departments where I worked everywhere including in logistics and in freezing temperatures in the frozen-food department. At the same time this process enabled all members of staff to build up trust in me and to see that my training had made me very well qualified for the job. My father, who was delighted that his daughter had joined the family business, allowed me as much free hand as possible during this time. At the beginning I had to rely on myself very much. However my father was and still is there for me when I have questions and would like to discuss something with him. I can always speak to him about every topic openly and without reservations.
Management experience outside the family business
However, the reason that the succession process ran smoothly from the beginning was that I had had management experience outside the family business: as divisional manager responsible for the organization of branches for Aldi Süd I was responsible for the management of 6 to 7 Aldi branches with a total of approx. 70 employees. This meant that I had to take on a lot of management responsibility from the very start. It was very important for me to gain management experience in an external company where, as I was not the boss’s daughter, I was not inevitably in the spotlight and could therefore work more anonymously and even make the odd mistake. After joining Rullko I was actively involved with “DIE JUNGEN UNTERNEHMER BJU” [the Federal Association of young Entrepreneurs] and president of this association for three years. This enabled me to develop my own public profile independently from my father and during my presidency I was able to put my own mark on this association. The network and respect for my work which I built up during this time are still very useful for me today in dealing with customers and business partners.
Harmonious cooperation between father and daughter
I have no problems with my father and only occasionally do I have a slight feeling of inferiority. When there are differences of opinion, we discuss these privately with each other. We always put on a united front in public in order to be credible and to act with authority. Nevertheless my management style is very different to that of my father. I pass on more information, include our employees more in important decisions and delegate more responsibility. This motivates the staff and relieves me.
Ultimately it is my father who has the majority shareholding and who can therefore overrule me in important decisions. At the moment I have one third of the shares. It is not quite certain when I will take over the majority of company shares. I am patient in this respect and am not putting any pressure on my father as I am very satisfied with one-third shares. It is important in our company that one family member has the main decision-making power. This organization helped Rullko once in the past when, after insurmountable differences of opinion with his former co-managing director, my father was able to dissociate himself very quickly from him as the second managing director owned only 10% of company shares. Protracted court battles would have seriously damaged our company. Therefore in future I shall have the majority shareholding in the company and the main decision-making power. My younger sister, who is a doctor and is not interested in the operative management of Rullko, shall receive a minority share-holding without being included in the company’s management decisions.
The transition is now proceeding “piecemeal”. At the moment there is no fixed date when Carl-Dieter Ostermann, who is now 66, will finally leave the company. But he is successively withdrawing from the business. It is often the case that he does not spend the whole day in the company and does not take part in all decisions. I have already taken over many responsibilities such as finances, controlling, personnel and training. However some areas overlap with those of my father and important decisions such as on new investments are still taken together. I like having my father by my side because I benefit from his experience. Sometimes, however, there are also situations where I would like to take decisions on my own – then some things would happen a little quicker and there would be more changes. However the bottom line is that we have the same or similar opinions on most things. All in all I feel that I am well prepared for a complete takeover which I anticipate with respect but without fear.
In future I will strive to continue to focus Rullko on supplying nursing homes and to establish ourselves more nationally. Future changes will in no way be carried out with a sledgehammer. When I joined the company, a member of staff said to me: “Please don’t immediately turn the whole place inside out!” Until now I have not turned the whole place inside out. Nevertheless Rullko is continuing to develop consistently so that we have extended our profile as purely a food supplier to being a provider of integrated solutions to our customers’ problems thanks to innovative EDP services: from clearly structured online ordering systems to an inventory service and menu planning, nutritional value calculations and cost transparency for canteen kitchens. The corporate succession process works well in that all participants treat each other openly and respectfully and always keep an eye on what is the most important thing: to assure a long-term future for our family business.