Research pick: Planning for when entrepreneurs exit, stage left - "Strategic planning, ambidexterity and exit strategy: dynamics in SMEs"

As Europe’s ageing population triggers a wave of business ownership transitions, research in the International Journal of Management and Enterprise Development has looked at one of the often-overlooked aspects of business, the factors influencing whether small and medium-sized enterprises (SMEs) can survive such transitions in terms of exit strategies and succession planning.

The researchers studied more than 1200 SMEs and their owner-managers in Finland, all aged 55 or older. They found that planning for the future plays a decisive role in whether firms remain innovative and adaptive as their founders prepare to step down. The research examines how different exit strategies, particularly family succession versus selling to a third party, relate to what ambidexterity. This two-handed ability to exploit existing capabilities while also exploring new opportunities.

Indeed, ambidexterity is widely regarded as essential for a company’s long-term viability, particularly in a rapidly changing business landscape. However, achieving it is particularly challenging for SMEs, which often depend heavily on the personal involvement and judgement of a single owner-manager. Without deliberate planning, many small businesses risk stagnation, or even closure, when the boss steps down.

The study’s key finding is that firms intending to hand over to a family member are more likely to be ambidextrous, but only if they also engage in strategic planning. In this context, strategic planning refers to a structured process of anticipating and preparing for future developments, including shifts in markets, competition, and internal capacity. Simply having the intention to keep the business in the family does not in itself translate into innovation or preparedness. It is the act of planning, systematically and proactively, that can unlock the firm’s ability to balance continuity with change.

In contrast, for businesses with low or no strategic planning, the chosen exit route, whether a family succession or selling to a third party, had little effect on forward-looking or adaptable the business was. This underscores the researchers’ argument that the mere expectation of a transition is not enough; it must be accompanied by intentional efforts to chart a path for the firm’s future.

Viljamaa, A., Joensuu-Salo, S. and Varamäki, E. (2025) ‘Strategic planning, ambidexterity and exit strategy: dynamics in SMEs’, Int. J. Management and Enterprise Development, Vol. 24, No. 6, pp.1–18.