Many clients come to us with a preconceived idea of how their transition or succession is going to go. Whether they have heard stories, done their own research, or experienced a transition at a previous company, it’s easy for business owners to have reservations or fears because of what they’ve seen. Tap or click the play button below to listen to: 3 Assumptions Business Owners Make About Succession.
In this episode, we’ll be talking about 3 of the most common assumptions business owners make about succession and debunking them with what really happens instead. It’s important to be well-informed for your transition, but don’t let that lead you to false expectations or concerns that keep you from going down that path to a healthy and successful transition.
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This episode was produced by Story On Media & Marketing: https://www.successwithstories.com.
3 Assumptions Business Owners Make About Succession Transcript
[00:00:00] Elizabeth Ledoux: Hi, and welcome back to the podcast. Uh, today what we’re gonna talk about is three assumptions that owners make about their business succession. Uh, you know, we had a client in our office just the other day, and it was really interesting working with him because he came in with these preconceived ideas, um, preconceived ideas that, um, Were just simply assumptions, but they were assumptions based on all the history and all of the things that he had learned about business transition, about merger and acquisitions, uh, and also some of the fears that he had acquired because of some of the things that he had heard.
[00:00:45] So today what I wanna talk about is just some of those. Things that people do, they make assumptions that are literally untrue when it comes to business succession. And over my 25 years plus of doing this work, I, I’m just gonna share three of them with you today. So, First thing that business owners will try to do and assume is they assume that everything needs to be perfect.
[00:01:17] So they’ll try to work through in their head this perfect business transition where they can envision, um, them leaving at the perfect time and the people coming in who are gonna be perfect to. Run this company and that the team’s gonna stay and the culture’s gonna continue and everything is going to be perfect.
[00:01:45] And we all know that perfect is not something that happens even in regular business. It’s just that the business owner, when you’re there, um, what you’re able to do is you’re able to kind of ebb and flow with how things are happening. And when you envision this transition succession, You’re not able to be there, you’re actually going to put this into somebody else’s hands, but you want it to continue to move forward in your, in your vision.
[00:02:13] So yes, you have to have a clear picture of what you’re trying to accomplish. That’s really crucial to be able to have that. Um, the other thing that you need, You need to understand that no transition, no matter what you do with it, is gonna meet all of your needs or all of anybody else’s needs. There are gonna be people who feel a loss just like you do.
[00:02:43] You’re gonna feel a loss of leaving the company and putting it into somebody else’s hands, and hopefully you’re gonna feel a gain of having this amazing next adventure that you’re moving. toward So no transition in my entire history of 25 years has met every single person’s needs. Just saying the idea is to focus on the things that are most important.
[00:03:07] So we have this thing called the objectives matrix. I’ve talked about it in a prior podcast and in another one. Um, I have a plan to go very deeply into the objectives matrix with you because it’s really a lot of fun and it’s an amazing tool. When we do the objectives matrix, what we’re able to do is to help people understand what’s most important and also understand what they’re not going to focus on, um, which battles are they gonna wanna win.
[00:03:36] Which things are go, are they gonna wanna keep and make sure that they get. So those would be deal breakers and which ones are like, you know, those are nice to haves. If we get it, we’d love to have it and we’re gonna try to get as many of those as we can, However, It’s not a deal breaker. So what we’re able to do is understand that the assumption of it being perfect is not true.
[00:03:58] That we’re able to focus on what’s important. Uh, the other thing that’s important is to understand that it’s not just about you. Remember, this is a team sport and so what’s most important to you then? What’s most important to your successor? So ultimately you’ll weave in their needs and their. Even if there are multiple of them, you know, multiple successors, a one to many kind of a concept, you’ll be able to weave that in and then again, know what’s most important.
[00:04:27] So that’s assumption number one. Assumption number two. This is a big one. Uh, that people that you can’t tell people. anything about this transition so you’re not able to tell people about it, even if they might, you might want them to participate in it or even if you might, um, be affecting them by what you do.
[00:04:54] So in an earlier podcast, we talked about why owners get stuck, and bottom line is owners get stuck because of fear. They’re pretty comfortable navigating the business. Of course, there’s fear every day when you wake up because you’re dealing with fires and everything else. Again, letting go is different because the fear of leaving and, and then not having the ability to manipulate or decide or shift things as needed.
[00:05:28] Um, that’s the fear. So, We learn that we can’t tell people about what we’re trying to accomplish, and I think that that assumption is completely backwards. I just can’t imagine not telling people what you’re trying to accomplish, especially if you have a great culture that’s very transparent and very vulnerable.
[00:05:56] in an internal transition. What you’re trying to do, which is what we talk about in this podcast, you’re trying to figure out how to get the business from you to someone You know, somebody who’s internal to the business now, they may not be internal today. You might have to go find them and groom them, and that might.
[00:06:15] Take a few years, but you’re trying to figure out how to get it to either a partner that already exists, you wanna leave, they wanna stay, you wanna get it to an employee or an employee group, small employee group, uh, so that they can take it on and take it forward without you. And it may be that you wanna get it to some family members.
[00:06:35] So internal transition. So as we do an internal transition, People who are working in the business actually are fearful already if they think that you’re in your fifties or maybe in your sixties. I’m turning 60 this year so I can kind of identify with that. Uh, If they think you’re in their fifties or sixties, they’re starting to wonder, I wonder how long the, I wonder how long this owner’s gonna stay.
[00:07:06] I wonder what’s gonna happen. What if something happens to him or her? What are we gonna do? Will the business survive? Will they still have a job? You know, they may have invested years of their life into this business, and if they are a potential successor, they may be wondering when you are just gonna get out of the way.
[00:07:25] Like, when is it gonna be my. If I’m the successor. So in that kind of wonderful culture and wonderful environment, again, I think that you, the idea of not being able to tell people or that belief, that assumption is completely backwards. The thought of being able to talk about, you know, for example, um, you know, I’m starting to think about what I might do when I’m not running the company all the time.
[00:07:54] I’m starting to think about who might be somebody that might want to work in this company and run it forward. Um, I just want to, and you tell them that you’re doing that one to get the idea and to put that out there. But two, So that you can actually help them to understand that you care about them and that you understand that this is their livelihood and that your business makes a big impact in not only their lives, but also the lives of your customers and your vendors and your community.
[00:08:30] So assumption number two, you can’t tell people who might be participants or who may be affected by it. Uh, I believe that it’s okay to start to talk about it in a very high general way because you gain information and gain knowledge. Third point, uh, owners believe that they have to do it all themselves.
[00:08:53] That they have to figure it out, carry the weight. Uh, transition the entire thing all the way to the very, very end. Part of that, I think, comes from them having to do that normally every day. If you’ve had or known your business for 10 years or 15 years, or 20, if you started it from the ground up every single day, you get up in the morning and you are making all of the decisions, you are that leader.
[00:09:23] You are the one that. That things fall on. At the last minute, you’re sometimes the last one standing at times, and you know how that feels. In this case, what happens is that the leaders have to get it going. The leaders have to have some, They have to create the first momentum and get it moving because in the very beginning of a business transition, You as the current owner will be the leader and the person who’s your successor coming in will be the follower.
[00:09:59] You may even already have, have that going on. Because if your successors are sitting inside of your business, they’re used to that. You’re the leader, they’re the follower, uh, and they’re watching you, they’ll go so far. Um, I had my company the other day, they said, they said, Well, Elizabeth, you know, We’ll go this far with you and we’ll make the decision to this point, but we’re not gonna go out.
[00:10:22] We’re not gonna go past that because we know that you might not like it and we know that you might veto it. So we’re gonna go to where we’re comfortable, but we’re not gonna go farther. So in a way, what I’ve done in my company is I’ve trained them to go to a certain limit, and you’ve probably done the same thing.
[00:10:38] If you have successors inside of your company. They’re trained to go to a certain limit, but no farther. In this case, what you do is you kind of open that up and you’re gonna lead. They’re gonna be the follower, and you’re gonna move that barrier. Pretty soon you’re gonna be both working together, kind of making the decisions together where you understand what they’re thinking and they understand yours, and you make those decisions together, which is relatively inefficient.
[00:11:06] Then what happens is you become the follower And they become the leader. And that’s where truthfully great rewards come because it’s so much fun to see your successor leading with you following and being completely comfortable with it because you’ve been there all the way. So that’s why we believe that transition’s a journey.
[00:11:27] And it takes time to go through it if you’re going to do an internal type of a transition, which is very, very rewarding. So my big idea for you this time is there are three assumptions owners make about business succession. One is it needs to be perfect before they can start. Not true. Two, can’t tell people who might be participating or be affected.
[00:11:51] Uh, I don’t believe that that’s true either. You do have to be careful. And then the third point is that owners have to do it all themselves. So my thought for you at the end is what are the assumptions that you are making about your transition and how are they keeping you from moving forward? And then I want you to ask yourself the question, is that true?
[00:12:19] So, thank you for joining us, and I’ll see you next time.
The Business Transition Roadmap with Elizabeth Ledoux
How do communities thrive? When businesses experience healthy growth and transition. Join CEO of The Transition Strategists, Elizabeth Ledoux as she and her guests identify what makes a successful business transition roadmap. If you know you want to transition or exit your business “one day”, today is the right day to start planning. This show will give you the roadmap.