„ I sometimes see intensive conflicts as a weakness of family businesses.“ Family businesses are the backbone of the german economy. About 91% of the companies based in Germany are family-run. The focus of family businesses is not on profit, but on long-term development. The importance of such a sustainable corporate strategy is particularly evident in the handover of a sustainable company to the next generation. Especially the knowledge transfer in internal succession of small family businesses represents a great challenge for many of them. We met Herbert Eberle, who has been leading a family business for over 40 years and is about to hand it over. Text und portrait photos Lena Eberle Translated with www.DeepL.com/Translator You have been managing an Allianz agency in Massing, Lower Bavaria for over fourty years. In which generation is it in? Right now, in the second generation. In a few years, this will then pass to the third. Who is suitable to succeed your agency? In principle, the succession plan must be agreed with the company and the Allianz company has decisionmaking authority because the customer portfolios that I have generated over the years do not belong
to me, but to them. So they basically determine who will succeed. There are two possibilities: Of course Allianz prefers succession within the family, but if this doesn´t work, Allianz will provide a foreign successor. The general interest of all parties involved - the customers, Allianz and myself – is that sons or daughters continue to run the agency. So your oldest son Michael, your daughter Maria and your youngest son Florian come into question? Which of the three is the most suitable? In this case, our customer base specifies the number of successors. Due to our relatively large number of clients, the agency must not only be handed over to one or two, but at least to three successors. That's for sure. Michael, Maria and Florian, all three, come into consideration. When is the right time for the handover? The right time is when I am at least 60 years old and at most 65 years old. I mustn't go on any longer, so in this period between 60 and 65 I have to hand over. Of course, the right time is always when you have the feeling that the intended successors are now so far that they can continue it alone. So at this moment it wouldn't be time? No, because the third of them would be my son Florian, who is not working for us at the moment, but is gaining experience in another agency. He will come back to us in autumn and has yet to familiarize himself and that will certainly take other 3 to 4 years.
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Herbert Eberle "Knowledge is crucial to stand out from the competition."
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What professional skills or qualifications do you think the three successors need to have in order to run the company successfully?
Michael, the oldest son.
Above all, it is important that the successors are professionally fit in the individual divisions. Theoretical expertise is the absolute basis. Dealing with customers is very important for this. An optimal successor should be able to approach customers and enter into negotiations with them. Showing sales talent is what is most important. The two older ones have already proven this and the youngest successor must now also prove it. The transfer of knowledge represents a special challenge in the handover of a company. The central question here is how, as a predecessor, one can guarantee that the knowledge, in concrete terms the tacit and explicit knowledge that one has acquired over the past years, is not lost, but is successfully passed on.
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To what extent does knowledge generally play a role in your company? Is knowledge a source of power for you? Knowledge is crucial for us to stand out from our competitors, so it is definitely a source of power. The company attaches great importance to specific knowledge, especially in two areas: Professional and customer-related knowledge. It is important to know how the customer ticks and how to approach the customer. It is certainly important to you that you can pass on the knowledge you have acquired over the past 40 years as well as possible. Yes, that's very close to my heart. I am happy to pass on my knowledge without restriction and at any time. I don't think my sons and daughter need to take my knowledge out of my nose. I am always open to questions and I think we complement each other very well in this respect. If I think or feel that I know something that the others don´t, I usually teach them right away. Conversely, if my children want to know something, they ask and are not shy. We complement each other very well. I would like to return to the tacit knowledge. Tacit knowledge is usually intangible and pragmatic and mostly based on the experience of the knowledge holder. How do you guarantee the difficult task of transferring this knowledge? The successors need to learn how to get into a business conversation with clients.
Maria This cannot happen overnight, such a learning process takes years. Since it is particularly important to meet the client´s requirements, it is also crucial to know a lot about them and their needs. By taking the successors to various client meetings right from the start, I try to pass on this knowledge. During sales, it is particularly important that my children participate in them and slowly get a feeling for the customers. Joining sales talks and customer appointments are essential. In order to keep our specific knowledge about customers, we use a socalled AMIS system within the agency. All specific characteristics and preferences of the customers are documented there. If I know that a customer has certain characteristics, which are to be considered in particular in the sales conversation, I record this. Therefore the successors also later once, should I no longer be on site, always have access to it. Explicit knowledge is tangible, accessible, and mostly written down. How do you guarantee the transfer of explicit knowledge? The transfer of this knowledge is guaranteed by our company. Allianz offers seminars that are mandatory for all employees. Theses can be attended also online through webinars, for example. The supposed successors must pass through all these seminars so it is ensured that everyone can reach the same knowledge level. All the knowledge learnt in these seminars is stored in
Florian, the youngest son.
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written form in databases and can be accessed by all employees at any time. For this reason it is normally easier to transfer explicit knowledge rather than tacit knowledge. Of course, it is not always 100% certain that your knowledge can be completely handed over to your children. What challenges or problems do you see that can arise within knowledge transfer? A problem, for example, could be the lost of customer data. However, I do not assume that data will be lost, as data security is guaranteed or capitalized by our company. This is also ensured by security programs and firewalls. A bigger problem could be that the successors are simply not interested in the stored knowledge or show very little interest. The successors must be able to decide for themselves whether and to what extent they accept and use the knowledge I have taught them over the past years. How important do you think is the level of trust for successful knowledge transfer? As far as the relationship between my successors and myself is concerned, I think that trust plays an important role in the transfer of knowledge. If one doesn´t trust the other one enough, I am sure that it will be more difficult to swap knowledge honestly, openly and respectfully. Furthermore to accept and internalize it. Perhaps some people even want to keep their knowledge to themselves, because they see advantages in it. That would be
very sad for me, because I really tried hard to give each of my children the same level of trust and not to neglect anyone. It is anyway hard to ensure this and to maintain valuable relationships, especially because my children are still young and still developing their personality. Professionally and privately. Sometimes it happens, that the siblings are discussing with each other. I think, that is because they are actually so familiar and do not mince their words when it comes to opinions. I sometimes see these intensive conflicts as a weakness of a family business, because you are so close to each other and disputes are fought out directly. But for me, trust also means strength and definitely plays an important role in our family business. In order to guarantee a successful knowledge transfer, trust and respect must definitely play a key role. How do you acquire new knowledge? How do you keep yourselves updated and informed about current trends? Our company keeps us updated through trainings about trends in customer behaviour. Our youngest son Florian spent 1 year in another agency and was able to gain knowledge, which in some cases we immediately incorporated into our business processes. How do you feel about leaving your company? I'm looking forward to have a little more time for
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myself in a few years. Anyway, I think that it might be difficult for me to be no longer in charge. Especially to lose the decision-making power and to observe everything from outside. Also because I regularly run into my children in my private life and will automatically be confronted with the daily events of the company. Nevertheless, it is important to know when it is over. To separate myself from the business won´t be easy for me. Thank you for this exciting and informative conversation with you. I wish you and your children all the best for the handover in the coming years.
In this special edition of our magazine the knowledge transfer within a family business´ handover process is examined in detail. It became clear that this can pose some challenges to companies. It became evident that the predecessor recognized his knowledge to be separated from him at an early stage and anchored as well in other sources of the company. He sees potentiality in the transfer of his expert power and knows that it is important to hand down the expert power he acquired during the years. It also seems that his children have no problem accepting his knowledge and exchanging it with each other. As the interview reflects, the problem of leaving could obstruct the knowledge transfer between the successor and the predecessor. The predecessor assumes he will anyway be in daily communication with his children during retirement, it will probably become difficult for him to be no longer involved in the decision-making process. By keeping the pensioner through an advisory role, companies can alleviate the difficult and emotional letting go and the predecessor can get better accustomed to the reality. Although he no longer has any decision-making power, he is still available to advise the company with his well-founded knowledge. During the conversation, the predecessor considers conflicts, sometimes, as a possible disadvantage of family businesses compared to non-family businesses. Family businesses must be careful that such conflicts do not develop into rivalry, as this could have a negative effect on knowledge transfer. He is aware of the fact, that trust plays an important role during knowledge transfer and commits, that it is the base of strength for his family business. The predecessor attaches great importance to the professional and high-quality knowledge of his children. New knowledge, integrated into the company and updated through training, creates optimal capabilities and conditions for a healthy and successful knowledge transfer.
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