Racing on After the Handoff. Part III
By Andrew J. Birol, President, Birol Growth Consulting
So your company has changed hands, the next generation is in charge, and best of all, the business has survived and family dinners are still pleasant. So all is well that ends well. Right? Wrong! Just like the relay team whose last runner has successfully grabbed the baton, there is still a race to be won. And while only one runner can lead the field at a time, it is still up to his teammates to support and cheer him on. What does this mean in a business succession? Everything, as the following examples demonstrate.
- A manufacturing firm, squeezed by foreign imports, a maturing product line, and excessive debt from the founder's untimely cash out, successfully installs the founder's son as its new president. Quickly, he moves to enhance the company's information systems, rationalize its product lines, and revitalize his father's team with executives who have the new skills needed to move the business forward. His father publicly conveys his confidence and pride in his son as he starts to take the business to the next level. In his new role as cheerleader, Dad admits that had his son tried to follow his every move the company would not be as healthy as it now is.
- An apprehensive niece inherits a distribution company, under fire from both its suppliers and its customers. As she quickly learns, the business needs reinvestment, the founder expects additional payouts and, worst of all, continually meddles in the business. The child, torn between trying to do it her uncle's way, and performing radical surgery, does neither well. As the founder’s nagging increases, the business flounders and key executives start preparing their resumes.
What succession lessons can we learn from the successful manufacturer and the struggling distributor?
If you are the predecessor, here are your keys to success.
- Step off the track without colliding into oncoming runners. Complete your transition of power, accountability, and ownership of assets and liabilities. Don't drag your feet or you may hinder your successor's progress.
- Turn into a coach and cheer on your team. Encourage your new leaders. Become a mentor but not a backseat driver.
- Run another leg of the relay race when asked to. If a member of the new team runs into trouble, and your successor asks, agree to fill in and temporarily do this job. While it may not be your ideal retirement, in a crisis, your trusted hand can be a great source of confidence to employees, vendors, and customers.
In summary, as the predecessor, your role after the handoff is to provide:
- Special Services
- A back stop
Do so with pride and dignity. Your team, your vendors, and your customers will admire your transition from success to significance.
As the successor in the transition relay, what are your keys to success?
- Power past the handoff without colliding into other runners. Complete your transition of power, accountability, and ownership of assets and liabilities. Accept that it is your race to win and if you falter, your successor did the best he could.
- Accept coaching and cheering from your team. While you have the baton now, and it can be lonely leading the pack, accept their counsel. You make the decisions now but don't have to do so on your own.
- Shuffle your team if you are losing the race. If a member of your new team runs into trouble, and your predecessor can, ask him to fill in and temporarily do a needed job. While it may not be his ideal retirement, in a crisis, your trusted leader can be a short-term source of confidence to employees, vendors, and customers.
In summary, as the successor, your role after the handoff is to demonstrate:
- Confidence, conviction, and consistency in leading your company
- A plan that is your plan
- Responsibility for results and accountability for the actions of your organization
Do so with determination and humility. Your team, your vendors, and your customers will admire your transition from follower to leader.
Succession, as this third in a series of articles has defined, is the toughest challenge facing a family business. Much like a relay race, where individual stars must work together for collective results, the management handoff is the scene of great success or spectacular defeat. Whether you are giving it or taking it, make sure the company's baton is firmly in one's hand at all times and then run as hard as you can!
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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.