The Graying of Germany’s Small Business Managers
Quickly aging group raises concerns about succession planning, stalled investments
Investor Gerd Fricke last year took over PEKU Folien, a Bavarian printing and packaging-material business, from its octogenarian owner.PHOTO: PEKU FOLIEN
投资人Gerd Fricke去年从耄耋之年的前所有者手中接手了一家名为PEKU Folien的巴伐利亚印刷和包装材料生产企业。照片来自：PEKU Folien
FRANKFURT—At the midsize companies that form Germany’s industrial backbone, managers are literally a dying breed.
The executives who helped fuel the country’s economic boom in recent decades are aging quickly, entering the 55-and-over age group four times as fast as Germans as a whole, according to a survey by development bank KfW. That disparity is particularly striking given how swiftly the overall population is aging: Germany now has the world’s lowest birthrate, slipping below Japan, according to a study this year by the Hamburg Institute of International Economics and audit firm BDO AG.
The graying executive corps could have a significant economic impact. Germany’s more than 3.5 million small and midsize businesses, known collectively as the Mittelstand, account for about 60% of its workforce and more than half of its economic output.
Older bosses at these companies, many of whom are also the owners, are less eager to invest in their own business than younger ones, the KfW survey found. They also frequently delay succession planning, even though handoffs can take an average of three years, experts say.
That’s largely because “dealing with succession is like facing your own death,” said Alexander Koeberle-Schmid, a family-business consultant at KPMG in Düsseldorf. “You try to avoid it as long as possible.”
By 2017, according to KfW, the jobs of four million employees at 580,000 midsize companies will depend on a successful leadership transition.
Chambers of commerce here are concerned enough to have started warning members that they need to begin planning for an orderly succession, or face the risk of having to close when the day arrives.
Autohaus Ochs GmbH, a Volkswagen dealership near Stuttgart, had eight employees when Martin Häussermann took it over in 2006. The previous owner, who was 69 years old, had been seeking a buyer for years and hadn’t made any significant investment in the company for a decade. “It would have been liquidated,” said Mr. Häussermann, who was 31 years old at the time.
Under Mr. Häussermann, who quickly started investing in the business, it has grown to 100 employees.
2006年，Martin Häussermann接手了斯图加特附近一个只有八名员工的大众汽车经销商Autohaus Ochs GmbH。它69岁的前主人寻找买家数年，并且在十年中没有进行任何明显的投资。“要不是我接手，当时它可能已经被清算了”，Häussermann说。Mr. Häussermann当时31岁，他迅速对业务进行了投资，在他管理之下，该企业成长到了拥有100名员工的规模。
Closures, however, are becoming increasingly common. Germany’s annual rate of business liquidations has outpaced business openings only four times since the mid-1970s, and three of those were in the past three years, according to IfM, a Mittelstand research institute. It expects the pattern to continue this year.
“Liquidations do happen, often when company know-how is closely tied to a single owner,” said Jürgen Becker, a succession expert at the regional business chamber that advised Mr. Häussermann. Older managers are frequently hesitant about investing and innovation, Mr. Becker added.
Last year, investor Gerd Fricke took over 100-employee PEKU Folien GmbH, a Bavarian printing and packaging-material business, from its octogenarian owner. Investment had stalled in some areas, “particularly in building up employees’ management skills,” he said.
去年，投资人Gerd Fricke从年迈的前所有者手中接过了拥有100名员工的巴伐利亚印刷和包装材料企业PEKU Folien GmbH。企业一些领域的投资陷于停滞，“尤其在提高员工管理能力方面”，他说。
Mr. Fricke shortened the company’s name and is flattening its hierarchical management structure as he converts it from a contract manufacturer to a more innovative supplier. In recent years, he said, PEKU skimped on spending that could have boosted productivity, such as having replacement tools ready when worn ones required servicing.
“Often it was a matter of being thrifty in the wrong places,” he added.
About 73% of senior managers advised by Germany’s industry and trade groups haven’t assembled the basic documents needed for a handover, such as a power of attorney, supplier and client information, bank-access data or a will, according to business-chamber association DIHK.
When companies change hands after the owner dies and heirs aren’t familiar with the company, they “can’t make the best decisions,” said Mr. Koeberle-Schmid at KPMG. When heirs disagree on strategy, they don’t agree on money or power either, he added.
“The bulk of our clients have a demographic problem, but few are aware enough to devote the needed resources,” said Uwe Berndt, who runs Mainblick, a public-relations agency for midsize logistics businesses.
“我们的大多数客户都有人口统计学方面的问题，但是他们很少意识到这一点并为此投入必要的资源,” 物流业中型企业公关机构Mainblick 的经营者Uwe Berndt说道。
Handovers can be tricky even when a family member is involved.
By the time Caspar Brockhaus took over management of Brockhaus Group from his father six years ago, suppliers of the roughly 150-employee steel, environmental and measurement-technology company had become some of its fiercest competitors. With guidance from his father, he shed operations that accounted for half the company’s sales and staff. Within four years, sales at the remaining operations had risen roughly 50%.
The move made financial sense, but was “a great emotional hurdle,” said Mr. Brockhaus, since it meant selling a traditional part of the business, whose family roots date back to 1864.
“In retrospect, you could say we should’ve done it earlier,” Mr. Brockhaus said. But succession “had to be cleared up first, so my father waited to implement and invest in the new strategy.”