CEO
Succession Begins at the Ownership Level
6 min read
Corporate succession is increasingly becoming a key issue for the future of the German economy. Olaf H. Szangolies, Partner at Odgers, explains from practical experience why many transitions fail – and what is required to make them successful.
The figures speak for themselves: According to a recent study by the Institute for SME Research, around 180,000 businesses in Germany will be facing succession issues by 2030. And the challenge is no longer limited to traditional family businesses. Today, succession affects a wide range of ownership structures: shareholder groups with multiple family branches, entrepreneurially driven holding companies, private equity-owned firms, as well as hybrid constellations combining operational and financially oriented owners.
A current data basis is provided by the DIHK Report on Corporate Succession 2025. Based on more than 50,000 direct advisory interactions between Chambers of Industry and Commerce and companies, the report shows that across Germany approximately 9,600 businesses ready for transfer are currently facing only around 4,000 potential successors – a clear indication of the existing succession gap. More than a quarter of business owners are even considering closing their company because no suitable successor can be found. Around 72% state that they intend to hand over the business for age-related reasons.
In practice, however, a different picture emerges: Regardless of the ownership structure, the lack of suitable successors is rarely the decisive reason why succession processes fail. More often, the problem lies in the absence of a clear and binding decision at ownership level. Unresolved target visions, divergent interests and hesitant decision-making among shareholders prove to be the main obstacles.
In many succession processes, the real challenge lies less with the candidates than at the ownership level. Suitable successors are often available – what is missing is a shared orientation among shareholders. An external perspective can help clarify objectives, define the successor role and structure decision-making processes.
When Interests Collide
As soon as ownership and management diverge, complexity increases exponentially. Different interests emerge openly or implicitly: control versus withdrawal, return versus continuity, influence versus responsibility. These tensions are unavoidable. They become critical when they are not made explicit and resolved.
A recent example from our practice illustrates this dynamic: A mid-sized technology company with revenues of €400 million was facing a succession decision. The 68-year-old founder held 51 percent, a financial investor 35 percent, and management 14 percent. On the surface, there was agreement on the need for a succession solution. At a deeper level, however, irreconcilable ideas clashed: the founder wanted a gradual transition while retaining control; the financial investor pushed for a fast, market-ready solution with an exit option; management demanded more autonomy but less risk.
Such constellations are now the rule rather than the exception. The classic family patriarch handing over the business to his son is a fading model. Instead, we are dealing with complex networks of interests in which each party brings different risk appetites and time horizons
In such situations, the potential successor often becomes a projection surface for contradictory expectations. The fundamental questions remain unanswered: How long does the current owner want to remain actively involved? What role should management play in the future? What concrete expectations do minority or financial shareholders have? The succession process becomes a proxy conflict for unresolved ownership issues.
Ownership Logic Determines the Succession Path
From practical experience, different ownership logics can be identified, each carrying specific succession risks:
Operationally driven owners often blur the lines between ownership and management. Having built or significantly shaped the company, they strongly identify with their operational role. The risk lies in prolonged transitions and informal influence.
Control-oriented shareholders systematically secure decision-making rights without assuming operational responsibility. They seek influence without liability, control without risk. Succession processes often stall because potential successors face unclear scopes of authority.
Return-oriented owners prioritise value creation and exit readiness. They design transitions in a functional and goal-oriented manner, but not always sustainably. The risk lies in short-term optimisation at the expense of long-term stability.
Fragmented shareholder groups combine different objective systems under one roof. Responsibility becomes diffused, and decisions are systematically postponed.
The starting point of any succession must be the ownership logic. Only from this can a viable process be developed – not the other way around.
Governance as a Success Factor
The more complex the ownership structure, the less succession can be left to chance. It requires professional governance: clear roles, defined decision rights and a realistic time frame. Transition is not a one-off event, but a phase that must be actively managed.
Studies on strategic succession planning show that the duration and stability of leadership transitions primarily depend on the level of preparation and the quality of governance. Companies that treat succession as a long-term leadership responsibility and integrate it early into their governance framework significantly reduce risks and decision pressure. By contrast, succession is still handled reactively in many organisations: only when a transition becomes foreseeable or unavoidable does serious engagement begin.
Advisory boards and supervisory bodies bear a central responsibility that goes beyond traditional monitoring and advisory functions. In succession situations, they must enable decision-making, structure conflicting interests and actively support the transition.
The Cost of Hesitation
The costs of failed or delayed succession are substantial. Postponed transitions tie up management attention, inhibit investment decisions and weaken the company’s strategic ability to act. As a result, growth opportunities remain unused, innovation projects are delayed and key talent leaves the organisation.
The situation becomes particularly critical when succession decisions are forced by external events. Illness, unexpected death or market crises leave no room for careful planning.
Not deciding is also a decision – and usually the most expensive one. I regularly encounter owners who postpone their decision for years and are then surprised when the market or circumstances force them to act. In such situations, the options are significantly worse and the costs exponentially higher.
Courage as a Core Entrepreneurial Competence
Ultimately, succession is a matter of entrepreneurial action. It requires courage: the courage not to postpone the right moment any further, to redefine power and influence, and to consciously assume responsibility. This courage is reflected in concrete decisions: When does the process begin? Who is responsible? Which criteria are decisive? How is success measured?
Successful succession follows recognisable principles: early planning, clear governance structures, professional support and, above all, the willingness to make difficult decisions. Companies that adhere to these principles not only achieve successful transitions but often also create sustainable increases in value.
Corporate succession is neither an emotional special case nor an HR project. It is a strategic leadership responsibility of the owners. Ultimately, it is a litmus test for entrepreneurial courage – the courage to do the right thing at the right time, even when it is uncomfortable.
Demographic trends will further intensify the issue in the coming years. Those who hesitate today risk the company’s survival tomorrow. Succession is therefore more than a business challenge – it is a key indicator of the future viability of the German economy.
Get in touch to find out more or to receive advice from our experts: Go to the contact form.