When Your Kid(s) Are Not Ready to Take Over Your Business…Yet.
If you’re wondering whether the child (or children) whom you are considering as a successor is ready to step into your shoes, you’re not alone. Business owners in the “I don’t think my kids are quite ready” group are joined by those who are convinced that their kids are absolutely not ready.
For a moment, let’s discuss the characteristics that the “best” successors share. As you read through this list, take a moment to think about your child as your successor.
- Do they have the ability to learn how to do what you do?
- Do they want to own/run their own business—yours?
- Is there alignment between their timetable and yours?
- Can they recognize new opportunities?
- Are they open to new challenges? Recognizing opportunities and meeting challenges require five entrepreneurial qualities. The ability to:
- Embrace new ideas.
- Tolerate uncertainty.
- Understand that “nothing goes as planned.”
- Act without fear of failure.
- Learn from their mistakes.
With that in mind, there are several realities to understand about your situation.
You are a parent.
Like all parents, you want your children to be happy and whole, and will do what you can to support them to be successful. “Doing what you can” is an important point to remember as we’ll see in a moment.
You are a business owner.
You have invested a lifetime into your business. Your talents and hard work—as well as those of your employees—are responsible for your company’s success. You are proud of the business you have built and want a successor who is able to build upon your success.
You have one head and two hats.
If you are considering a child as a future owner of your business, you are wearing at least two hats: parent and business owner. If your child has been working in the business for some period of time, you are well aware that:
- At times you wear your owner hat and at others, your parent hat. The trick is knowing when to wear each.
- Stepping into a conversation wearing the wrong hat is a mistake.
- Switching hats mid-conversation is more difficult than it might seem.
- It takes time and practice to know which hat to choose and practice helps but does not insure perfect.
You are human.
- Your relationships with those you love are important to you.
- You want to be as fair as you can to those important people.
- You make mistakes.
- You cannot predict the future.
With these facts as a foundation, let’s ask the big question: How do you hand over your business to a child who is not, or may not be, ready to run it successfully?
You don’t. Yet.
If a child is to be the happy, whole and successful person you want them to be and they are to be the successful next owner of your business, they should possess the five characteristics that we listed at the beginning of this article.
Consider just the first one: The ability to learn how to do what you do. Notice that the first characteristic is not the ability to do what you do; rather, it is the ability to learn how to do what you do. The distinction between the two is critically important because the second makes clear that both successor and owner must bring something to the table. Your successor brings the capacity to learn and so you bring the ability to teach.
If you have been concerned only about your child’s readiness to run your business, start to consider your readiness: Are you prepared to do what you need to do to help your child succeed as an owner? 4 Ways To Prepare Your Child To Become Your Successor
- Build a Curriculum
It is not at all uncommon for owners to get stuck when they think about teaching a successor how to do what they do “naturally.” Doing something well and teaching it well are not the same. Let’s look at how one owner “Janine” taught what she did naturally. (While Janine wanted her employees to run the company during her absence, the process she used is the same one we use to help owners prepare their successors for ownership.)
When Janine was four months pregnant with her second child, she asked us to design a plan that would prepare the employees of her retail business so well that they would not need to call her during her maternity leave.
Once we helped her develop a comprehensive list of all the tasks that she performed to run her company day to day, we created a timeline and strategy to transfer each process/task to a designated employee or group of employees.
She started teaching and transferring the least complex items on her list and moved to increasingly complex tasks until she reached the last: merchandising. When we asked her which employee was best suited to take it over, Janine said, “I can’t transition it.” If that was true, Janine had a choice: give up her interruption-free maternity leave or allow the store to run out of merchandise until she returned.
Janine rejected both options and argued that even if she could give up merchandising, she couldn’t tell anyone how she did it.
She had a problem, but hardly an insurmountable one. We asked Janine to observe herself making purchasing decisions over the next 10 days. When she returned, she had gained insight into a task she did so naturally that she’d never considered how she did it. We built a step-by-step decision matrix that Janine used to teach two employees how to merchandise. Four weeks later, she delivered her second child and began her relaxing, uninterrupted special time with her family.
- Learn to Dance
Building a curriculum is a big part of readying your child for ownership, but so too is gracefully “dancing” through the three phases of successor development. In the first phase, you are the leader who teaches your child the steps of the dance. In the second, you and your child alternate the lead until, in the last phase, your child leads, and you follow. Whether your successor is your child or someone else, a successful transition requires you to become a good teacher as you transition from leading to following.
- Follow a Few Rules
Communicating about an issue as important as a business transition can be difficult and communicating about succession with children can create “hat confusion” for you and your child. Children can hear even the most carefully crafted and delivered messages through filters that they’ve had in place for years. For example, if you have to tell a daughter who wanted to be CEO that you’ve chosen her brother instead, her filter causes this type of reaction, “Of course, my brother gets to be CEO! He always got the new bike, and I always got his hand-me-downs.”
To assist with communication, we offer four rules:
Rule 1: Prepare. Understand what information you seek and decide what you will and will not share. Try to anticipate what the other person may think or feel and consider possible responses.
Rule 2: Be honest and appropriately transparent.
Rule 3: Make no promises.
Rule 4: Do not try to persuade anyone to do something they don’t want to do.
Of course, if you suspect that even adhering to these rules is not an adequate defense against long-forgotten choices made years ago, recruit a pinch hitter. Take yourself out of the batter’s box, and bring in a person who doesn’t have a long-standing relationship with the other players.
- Make Sure They’re Ready
The question of whether your child is ready yet to succeed you in ownership is one that only you can answer, but there is a process that will help:
- Assess your child’s abilities.
- Create a curriculum to teach your child how you do what you do.
- Learn the dance of successor development.
- Communicate with everyone involved in the business transition in a way that keeps your important relationships healthy.
That process is called The Transition Roadmap Developer Process™ and we invite you to learn more about it at www.TransitionStrategists.com.
Inviting a successor to become a business owner is an exciting and wonderful part of the business transition process. Inviting your child into that process can be the ultimate capstone to your successful career and one of the most fulfilling experiences you can have as a parent.