Pass The Baton
Family Business Perspective – By Jeff Faulkner
Developing a successor is paramount to sustainable business success. It requires empowering your successor to step up to the challenge, while holding them accountable to strategic goals. For a period of time there are multiple hands on the baton. If this delicate transition is not done properly there can be a demotivating tug of war experience – if you run past the disqualification line before the hand off is completed, or even worse, if the baton falls.
Learning how to pass the baton in a smooth, seamless manner involves four main strategies: leadership team bench strength/buy-in, business owner support, developing financial independence, and finding a third-party perspective to validate you’re on the right track.
Your key management team is critical to providing experience and leadership perspective, and can help you successfully recruit for the future. Your successor will eventually need their own team who is loyal to them, therefore working with them to recruit the right talent for the future helps to grow the business in the direction that you planned together. At some point, you will need to let your successor make some hiring and firing mistakes, essentially migrating to a position of offering your opinion and input, but then backing off and letting your successor make the decision.
Because your key management is driving the day-to-day operations, leadership support also requires them to partner with your successor. They likely have experience beyond your successor’s years, and will have the opportunity to teach and mentor your successor. Fathers/Mothers are typically poor mentors of their own children. They are either too hard or too soft. Consideration should always be given to the development of a non-family management mentor team that would oversee the development and growth of your family successor. If you don’t have managers that you feel are strong enough to play such a role, then you may have some additional evaluation of your own leadership style.
One of the more important aspects of successor development and passing the baton smoothly is taking the time to create leadership space by redefining your roles and responsibilities. This often gets emotional for business owners who love their work and have nothing else in their lives vying for their attention. I recently met with a 72-year-old business owner who expressed these feelings and said when he turned 70 he began to consider succession for the first time and came to the conclusion that he wanted the next decade to be his most gratifying and impactful years. Another retired at 70, walked away from the business without defining what he was retiring to, and quickly became depressed and lacking a sense of purpose.
Understanding the emotional, financial and managerial influences impacting the transition process allows you, as the business owner, to define your purpose and develop strong leaders; providing you the opportunity to slowly let go of the baton and build confidence in your successor.