Racing Towards the Handoff: Part 1
By Andrew J. Birol, President, Birol Growth Consulting
Having served more than fifty client businesses led by parent/children teams, I regularly assist leadership in changing hands. In this first of three installments, I will outline what you, whether the owner or the inheritor, can do before the transition to prepare for your succession.
Face it, in your family business, all decisions, particularly those of succession, are likely made as much for family reasons as for business. When the inevitable time approaches for your next generation to replace who is in power, a collision of emotion, reality, expectations and aspirations is likely. Here are some examples I have witnessed:
- Founding sisters, counting on cashing in on their firm's success to fund an unplanned retirement, learn that the recent economy has devastated their wealth. In panic, they plunder their company to salvage what they can.
- A father hands off his business but with nothing to do, stays around, and second-guesses his offspring, plunging the company into indecision and decline.
- A daughter realizing her vision for the business is irreconcilable with her father's, grows impatient, and walks out, leaving him high and dry.
Successful transitions start through preparation and communication. For your impending handoff to be flawless, both of you, the incoming and outgoing owners, need to:
- Reconcile your personal goals with your business' needs.
- Set, agree on and meet each other's expectations
- Do whatever it takes, not what is easy.
There is an old adage, companies don't make decisions, people do, and in the case of your family business two emotionally, professionally and financially intertwined individuals have to act as one. Doing it right is tough and differs depending on which role you play.
Getting ready when you are the leader
In addition to the leadership baton, remember that both of you are carrying your own backpacks of professional, financial, emotional and personal issues. Before you race into the fly zone and exchange control, ensure you are both buttoned down. The most successful parent-children owners have learned how to play and fight fair, and depend on communication, trust, and commitment to succeed.
Over the next three issues, each phase of the business ownership relay race will be explored. Stay tuned!
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© Copyrighted by Andrew J. Birol, President of Birol Growth Consulting, who helps owners grow their businesses by growing their Best and Highest Use ®. Andy can be reached at (412) 973-2080 , by email at firstname.lastname@example.org, or on the web at www.andybirol.com.