Speed Bumps in Business Succession

06. 30. 2016    |    posted by:

Many business owners hope to pass on their business legacy. The general path is passing the business to children, another family member, an employee, or an outside buyer. Passing ownership to family is a common strategy and often leveraged to fund the owner’s retirement and carry on his or her life’s work.

In homage to David Bowie’s song “It Ain’t Easy,” every business owner faces speed bumps that threaten to thwart the transition. Here are some tips to hurdle some of the bigger obstacles.

Don’t wait to start planning

The biggest speed bump is time. If business owners plan at all, many wait too long to execute a succession strategy. We recommend developing three perspectives: a long term strategy, a midterm strategy, and a right-now strategy. Your plan for the transition of the business strongly influences what you do with the business today. The longer you wait, the less likely you and your family will benefit from the long term or midterm strategies resulting in the right-now strategy changing to crisis mode.

Don’t be secretive

Business owners frequently hold succession plans close to their chest. It shouldn’t be a secret that your business will be run by someone else someday. Talk about the need to plan, how you are going to go about it, how family and key staff will be involved, and what you hope to accomplish. Keep all the parties informed, perhaps through periodic meetings.

Make your retirement agenda part of the plan

Retirement can be difficult for an entrepreneur because the business is often the all-consuming center of the owner’s life and personal identity. Without a clear sense of what you want to do in retirement you will almost inevitably drift back to the business. If you are meddling in how it's being run, it will often be to the detriment of the business and family relations. Ensure that your transition plan includes replacing your time previously spent on the business. 

Don’t do the planning on your own

Business succession planning is complicated and fraught with speed bumps and pot holes some of which are disabling. An impartial advisor that provides unbiased thinking, planning, and financial advice during the process is invaluable for leading you, your family, and staff through the necessary discussions. Remember, you have not gone through the retirement process before (most likely). You need someone who has helped individuals through this experience many times, and has a method for helping you get the results that are best for you, and the legacy you are leaving.

 

Don’t assume family will or should take ownership and control

While a family member may eventually take over the business, not all of your family members will want to and not all should. It’s critical to talk to your children and other family prospects about what they want for themselves making sure to be honest with them about what managing the business requires. Encourage, but don’t press. Their decision and fit has to be natural. Otherwise it is a recipe for disaster.

Don’t divide the business among heirs

Ownership spread among heirs is usually a catastrophe unless there is a clear structure in place to resolve issues and differences. One person has to be designated to run the company. If other family members have conflicting roles and/or financial interests, the methods to address these need to be clearly defined. If family members are left out, then other fairness considerations must be addressed around inheritance and outside responsibilities.

A transition plan must go beyond the decisions

Many owners have difficulty letting go. The transition in management has to have its own plan. Many components involving suppliers, customers, staff, culture, and the rest of the family must be addressed. It’s much more than just handing over the keys.

Passion Injections

05. 11. 2016    |    posted by:

Have you ever been in the presence of someone whose message is so powerful that it resonates? So much so that you pass it on to others? We all have. This is just one skill of successful communicators and motivators.

How do they get through to you this way? These super-communicators have important things to communicate and meaningful motives to pass their ideas along. They convey them in a way that gives the message the glue to adhere to your memory, allowing you to become the next messenger. The content has to be actionable either in the receiver’s mind or their subsequent actions. The reception, message, and style all have to be wrapped in a cocoon of integrity and passion.

 Ah, passion!  What if you could bottle it and feed it to your staff? How do you make them act and communicate this way, with passion?

Developing passion in your employees is easier than you think. Work on becoming a role model by showing them your passion. In every employee interaction, volunteer your opinion about how the company drives your passion and respect. Ask your staff what they are most passionate about in their world and in their work. Don’t expect an answer that is particularly meaningful to you. Just thank them and mean it. Do it every work day. Over time, you will pollinate your organization with passion injections. Enjoy the harvest.

Empathy and Value

02. 21. 2016    |    posted by:

A core concept in creating value for a client or prospect is understanding advantages and worth from a perspective other than the seller. This seems too obvious, but it is our own bias that defeats our ability to empathize.

A seller often lists attributes they like, such as an exciting feature or a recent project they invested time in. This is what you think the buyer should appreciate, if they only knew better.

To empathize with the needs of the buyer, we need to understand in a non-superficial way and slow down to get the "what" and the "why" of their business requirements and roadmaps.

How do you create and sustain a cycle of empathy beyond the customer, but to those on your wish list? The feedback loop between people in the field and people in product development is not a one-way repository of information. Your communication with a prospect needs to facilitate an ongoing conversation that leasds to an understanding of the depth and shifting of needs. By communicating and then exploring true solutions, new value and stronger relationships develop.

So, how does your sales process create empathy, not just for the transaction, but for the future of your client relationships too?