Preparing for transition
Business Succession Planning in the Shadow of a Family Tragedy
Leaving a legacy at your company means more than just creating and producing great products and services. It also means leaving behind a sustainable entity that creates good jobs, is a benefactor for the community, and spurs economic growth for other industries.
Failure to properly plan can turn out to be a disaster. I know because I lived it.
A lesson in succession
In 1985, after having spent practically all of his adult life working for various HVAC firms, my father decided to start his own business. I was 15 at the time and his first true employee. There were some very lean years around the house in the beginning. By the time I graduated from high school my “college fund” had pretty much disappeared back into the business. So I continued to work for my father for roughly three more years until I had saved enough money to attend college.
CLA survey shows only 19 percent in manufacturing and distribution are “very prepared” for leadership transition.
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During that time, my father continued to run a very successful business. Word quickly spread around the residential homebuilding community of the timely, reasonably priced, high-quality work we did. Things were going well; suddenly there was a fleet of trucks, a warehouse, and employees.
Throughout these years, my father didn’t think much about how he would eventually retire, sell, or exit the business. He knew I didn’t want to take the reigns as I had already graduated from college and started my career as a CPA. He was always “too busy to think about it” he would tell me. At any given moment (much like many of the small business owners I work with), he was dealing with a customer issue, a supplier issue, a cash flow issue, and working hard to build the business. Who had time to think about retiring or dying?
In January 2007, my father passed away at the age of 56, leaving his successful business to a family that had no clue how to run it. Aside from the emotional toll that every family endures with the loss of a loved one, we now had to deal with the sudden burden of what to do with this business.
The emotional stress was not limited to our family. Employees learned the news when they arrived for work, and were soon wondering if the place would be sold, and if they still had jobs.
Take time to act now
It all worked out in the end, but the emotional and financial stress was enough to make me realize how a solid succession plan could have prevented (or at least lessened) some of the anxiety, and maybe even provided a better economic answer for our family.
The point is this: No one likes thinking about his or her own mortality and some cringe at the thought of someone else continuing the business without his or her expertise. As a result, many of the small business owners we work with neglect planning for succession, consider it a low priority, or simply don’t want to think about “what if I don’t wake up some day?”
How we can help
No matter where you are in the process, we can help you develop a succession plan that satisfies your key stakeholders, provides for seamless leadership change, helps the business continue to thrive, and preserves your legacy.
|Get Started on Succession|
|Define the process — How will a successor be chosen, who will decide, what are the criteria, what is the timeline?|
|Identify current and future needs — What type of leader will be best suited to today’s needs and the challenges in the future?|
|Assess talent — Give it plenty of thought. Leadership qualities sometimes take years to develop, which is all the more reason to start early.|
|Make a choice — Talk to the candidate first. Make sure he or she is fully on board with the plan.|
|Educate, train, and prepare — Allow the candidate to gain hands-on experience in as many areas of the organization as possible.|
|Make the transition — If the target is retirement, set a date and stick to it. False starts and movable deadlines are distracting.|
|Walk away — This may be the hardest step, but it is essential for the new leader to gain authority and implement plans without interference and second guessing.|