The goal of a management transfer is twofold. The main objective is to define the role of the new managing director, but there is also the objective of putting in place a new management team, one which in some cases includes managers from the old team.

As will be discussed in the section Transfer Process, a management transfer can take many forms. To understand the fundamental issues in this type of transfer, it is essential to examine closely the factors that influence it. They are not the same for incumbents and successors (or buyers) because of the different roles that these actors play in the transfer process.

Factors Influencing a Management Transfer

If you are the current managing director (the incumbent):

What do you hope to achieve by the management transfer?

  • Do you hope to ensure strategic continuity, foster business growth, renew the business strategy, or perhaps develop new business opportunities (e.g., through internationalization or new products)?

What are the competencies necessary for the management positions to be filled?

What resources and strategies do you think should be deployed to accomplish this management transfer?

  • Would you like members of your family to remain on the management team?
  • Would you like to see someone from the inside without any ties to the family promoted?
    • An exhaustive evaluation of current human resources would help you to answer the following question: At the present time, who at the business could take on a management position?
  • Should new talent be brought in through external recruitment?
  • Name the most competent persons at the business, independently of who they are and where they come from.

At what pace do you wish to see the management transfer accomplished?

  • In accordance with your schedule and the type of transfer that is favored, you will be able to create a plan for providing support and training to the successors, so that they can develop the knowledge and the competencies necessary to take on their future positions as managers of the business.

If you are the successor who is taking over management and ownership of the business :

Whom are you taking over from?

  • When you take on the role of managing director at a business that you have just acquired, the management transfer will differ depending on whether you are taking over from a family member, from your ex-boss, or from a complete stranger.

What do you expect to achieve by taking over the management of this business?

  • What will be the time frame and the pace of the management transfer process? What kind of training, experience, and learning will be required to take on this role?
  • What will be the role of the current managing director (joint management, mentoring, financing, etc.)?
  • What will be the role of the current management team and the current board of directors during the transfer process and afterwards?
  • Depending on your expectations, you should foresee one of the following scenarios:
    • Ensuring continuity through joint management with the current managing director;
    • Creating a medium-term partnership with the current managing director so that he or she can train you for your new position;
    • Making a rapid management transfer and quickly taking over the business.

If you are only taking over management of the business:

What is the context in which you are doing so?

  • You are succeeding a relative who will continue to own the business.
  • You are a member of the incumbent management team who has been nominated by the new owner(s) of the business.
  • You are a new managing director who has been recruited externally by the new owner(s) of the business.

What do the new owner(s) of the business expect from you?

  • Eventually you will become the (co-)owner of the business.
  • You only have to ensure continuity during the succession process (as a bridge manager).
  • You must instill a spirit of change into the business.