Succession planning is tricky.
It’s comprised of three components — approaching the handoff, the handoff itself and leaving the fly zone. It’s imperative to treat each phase as equally important. This month, we’ll tackle the first of those phases.
For your impending handoff to be flawless, both the incoming and outgoing owners need to get ready. Doing it right is tough and it differs depending on which role you play — the successor or the receiver — but contains the same three basic tasks.
* Reconcile your personal goals with your business’s needs.
* Set, agree and meet each other’s expectations.
* Do whatever it takes, not what is easy.
Getting ready when you are the leader
Whether you are leaving the business in a state of survival, success or significance, you have created an entity separate from you. Accept that you and your business will go your separate ways, and make sure you have a separate way to go.
Don’t just pick your successor; define what you need to hand over the reins and when you intend to do so. Gaming your offspring with false hopes or unachievable goals is just as destructive as giving it all to them on a silver platter without any commitment in return.
Growing a business is hard enough without transitioning it between loved ones. Understand that the needs of the business come first, and as its leader, don’t ever confuse what your business needs with who your children are. Just as you would when interviewing any employee, determine what your child can do, will do and how he or she will do the job.
Getting ready when you are the follower
Whether you were preordained to take over the family business or you are the prodigal son pressed into service at the 11th hour, ask yourself why you are taking over the business.
If you don’t want to grow it, don’t take it over. Too often, the next generation lives out a professional lifetime based on guilt, blind sacrifice and fatalism.
Taking over the family business does not have to be an all-or-nothing proposition. There are an infinite number of ways to structure responsibilities, timing, investment and ownership.
If you remember that the business is not yours until you have earned it in the eyes of your parents, employees, customers and vendors, it will mean a lot more to you, and you will take leading it a lot more seriously. If you and your parents cannot come to terms on expectations, then move on.
You may share a last name with your parents’ business, but otherwise, do you belong there? Understand your best and highest use and objectively decide what you need to learn, endure and accomplish to lead the business.
After first working elsewhere, accept and accomplish not only the company tasks that are critical but the ones that only an owner would care enough to complete. Andrew Birol is president of Birol Growth Consulting, a Solon-based firm that helps grow businesses by growing their best and highest uses. Reach him at (440) 349-1970.