Even world-class track and field athletes sometimes drop the baton, which can lead to failure. Family business succession is a key factor in business survival, like a baton in a relay race.
<Corporate survival report>
Today, we will look at the current state of family business succession in a recession and its success points.
Reporter Jin Jae-woon reported
(Report)
This is a company in Busan that produces over 10,000 types of specialty rubber products. This business was founded by 76-year-old Cho Yong-guk 40 years ago and is still in operation today.
Cho is now out of the management line. Instead, his eldest son is the CEO. That was 19 years ago. He joined the company as a section chief and has been in charge of the president’s job since 1996.
(Jo See Young, CEO (47))
“When you come in new, there is a lot to do. The founder did a lot of things, and the successor has to lead it systematically.”
In the process, the company expanded its business overseas and the company size also grew by about three times. “The reason why this company is evaluated as a stable family business succession is because of its stable growth. As the scale and sales increase and new technologies are added, the future growth potential is also high.”
This year, we will proceed with a large-scale expansion in Ulsan. Of course, there were also disagreements between the father and son in the process.
(Cho Yong-guk, Chairman)
“Once you have transferred the management rights, you should only give advice, but the decision-making power should be given to your son.”
(Jo See Young, CEO)
“There is no one who is 100% compatible between father and son. You have to talk, understand, and adjust.”
However, it is rare for family business succession to be natural like this company. When asked about their intention to succeed the family business, more than 87% responded that they were willing to do so.
However, only 19% are in the process of family business succession, and about half of the remaining companies do not even have a plan to train successors. They know what to do, but they are not prepared.
Currently, the CEO of medium-sized companies in the Busan area is 60 years old or older, accounting for 66%, or two-thirds. It is analyzed that the time for family business succession has actually passed.
In a recession, family business succession work is becoming an essential condition for survival that cannot be neglected.
