The best successor doesn’t always have the same last name

Column: Nick Ursem

When my grandfather, Klaas Ursem, founded his construction company in Wognum in the late 1930s, he probably could not have imagined that the company would eventually be carried on by three generations.

What began with a single entrepreneur was carried on by his eight sons. Later, the third generation joined the business, and five cousins also worked within the family business. Within our family, one principle was taken for granted: the business would be passed on to the next generation. This was not an unusual way of thinking at the time. The same was true for many Dutch family businesses: the question was not whether the business would remain in the family, but who would take over the reins.

These days, that sense of certainty seems to be fading more and more. A recent study by ABN AMRO shows that only one in five Dutch business owners explicitly chooses to transfer ownership within the family. Of the business owners who ultimately choose a path outside the family, 80 percent cite a simple lack of interest within the family as the main reason. This is a development that is easy to understand. Children are increasingly building their own careers outside their parents’ businesses, driven by ambitions different from those of the previous generation.

The question is no longer who will take over the company, but what it will take to keep it successful for the next generation.

Transfer within the family, of course, remains an option. In other cases, ownership remains in the family, while day-to-day management is transferred to an outside director. Entrepreneurs are also increasingly opting for a management buyout or a sale to a strategic partner. Which path is best ultimately depends on what the company needs to remain successful.
This requires difficult choices—especially for family business owners who have spent years building their companies. At the same time, there is also a positive trend emerging. The interests of the company, its employees, and its customers are increasingly taking center stage.

Perhaps that is the biggest change within Dutch family-owned businesses. The focus is no longer on the family, but on the continuity of the business. And as a result, the best successor doesn’t always share the same last name.

This column originally appeared in the fall issue of INTO Business West-Friesland.