Ozren Hanžić: We were more of an exception than a rule, so the generational transition went really smoothly

How to ensure a smooth transition between generations in family businesses or how family businesses navigate the tension between profitability and social responsibility? These are just some of the questions we attempt to answer at the 15th Lider Conference ‘The Future of Family Businesses‘, which filled the hall in Zagreb’s Zonaru on International Women’s Day.

Family businesses are an inevitable factor in the economy of every country, and it is estimated that in Croatia, more than 50 percent of employees come from such family businesses, which speaks volumes about how strong and important a subject this is. Due to the impact of family entrepreneurship on national economies, many developed countries are increasingly discussing the need for various programs and economic policy instruments that recognize the specificities of family businesses. For this reason, Lider traditionally holds a conference on family businesses to highlight their importance and contribution to economic development and to provide answers to the most important questions faced by all family business owners.

At the very beginning of the conference, the attendees were greeted by the editor-in-chief of Lider, Miodrag Šajatović.

– Over the years, we have been following family businesses that come to this conference and we notice that those families who attend the conference find it easier to solve transition challenges than those who have not appeared at our gatherings. We do not provide all the answers, but here are those who are aware of what generational transition means and who are working on it – said Šajatović, emphasizing the importance of the next generation retaining a certain percentage of firms owned by domestic entrepreneurs.

How to ensure the transition

That the transition is not often smooth was confirmed by the director of Sobočan, Franjo Sobočan, who pointed out in Zonaru that different generations want different speeds and paces of transition, so while the young want faster changes, the older founders and owners are more emotional about leaving.

– They pull a little faster than we are able to implement, but the goal and idea about the future of the company must be shared – said Sobočan, emphasizing that they are still a family business, but it is organized in a corporate manner, so they have introduced a management, controlling, and reporting structure and are now completing the process of having the Management Board manage the company, while managers who are not necessarily related to the family operate it.

– I now have more of an advisory and supervisory role in the company, I no longer participate in operations; there are members of the Management Board, and we are slowly transferring everything to the managerial part, so we gain more time for other things – explained Sobočan.

In an earlier phase of the transition is the company Mihoković metal solutions, whose sales director, Marina Mihoković Dvorski, claims they have divided operationally, but the division of work done by the parents still remains.

– We have not yet divided the management tasks; there are fears and doubts about the future, but I believe that we will, like everyone else, manage to do this over a certain period – said Mihoković Dvorski, adding that they have managed to structure the company together, but in a way that leaves room for the company’s growth.

– We all have the same goal, which is to continue our parents’ business, for the company to grow and develop, and we also want to build ourselves personally, but it is difficult to balance between private and business – said the sales director of Mihoković metal solutions, who claims that their biggest challenge is how to reconcile intergenerational opinions and attitudes to reach their goal.

As she said, desire and will are important, and the older generations should let those coming after them make mistakes because that is how they will learn. – I think that parents are a bit too protective; if you could do it, we can too. We will call you when we need you, but let us work – said Mihoković Dvorski.

At the first panel of the conference, the director of Subana, Ozren Hanžić, spoke, whose company has completed the transition and is an example of how to successfully transfer a company from one generation to another. The hardest part, claims Hanžić, was making the initial decision, that is, defining the goals they wanted to achieve and then ultimately making a sharp cut and distancing themselves from the older generation, which is the key thing for the transition to ultimately be successful.

– I have no negative experiences because the relationship between the previous generation and the new one functioned well. I believe we were more of an exception than a rule, and the whole process really went smoothly – said Hanžić.

In the end, he concluded that two things are key; it is necessary to make a decision about which direction you want to go, management or ownership, and it is important not to leave things ambiguous. – I can always ask the previous generation for advice, but since the responsibility at the end of the day is mine, then the decision must also be mine – concluded Hanžić.