“I thought having all the plans in place before telling my kids was the responsible thing to do,” a business owner recently shared with me. “But when I announced my succession decision, you could feel the temperature in the room drop 20 degrees. Now my daughter won’t return my calls, and my son is talking about leaving the company entirely.” This scenario plays out more frequently than you might imagine. Statistics show that only 30% of family businesses survive into the second generation, and merely 12% make it to the
“I know I need to plan my transition, but there’s always something more urgent to handle.”
I hear this from business owners almost daily. You’re managing daily operations, dealing with employees, keeping customers happy, and trying to grow your business. The thought of planning your eventual transition feels overwhelming – especially when you’re not even sure where to start.
But here’s what I’ve learned: time is your most powerful ally in creating a successful transition.
As a potential successor, one of the most challenging questions we face is: “Is this truly my dream, or am I just following someone else’s path?” As the daughter of a successful business owner and now a potential successor at The Transition Strategists, one of North America’s leading business succession consulting firms, I’ve wrestled with this question from multiple angles. Today, I want to share my journey of discovering authentic purpose in business succession, hoping it might help others facing similar questions.
One of our favorite books by Patrick Lencioni is “The Five Dysfunctions of a Team.” (If you haven’t read it, we highly recommend it.) He’s also the author of an article in the Harvard Business Review about corporate values. In this article, Lencioni asks readers if four values — communication, respect, integrity and excellence —resemble their own companies’ values and then drops a bombshell: These are the values of Enron, the energy company that declared bankruptcy after committing one of the biggest accounting frauds of this century. Not surprisingly, there’s
Stepping out of and into business ownership are huge career and life transitions. Owners stepping out have reached a high level of competency and need to transfer the knowledge of what they do and how they do it to their successors. Organizing that transfer is just one reason we include a Transition Timeline™ in the Transition Roadmap documents we create for owners and their successors. Business owners, however, don’t just step out of ownership; they also step into the next great adventure of their lives. And that transition from business
As Transition Strategists, we talk frequently about hats; primarily knowing when to wear them and which one to wear. No, we’re not teaching proper hat etiquette. Instead, we use hats as a metaphor for the roles individuals play in a family and in a family business. Two Hats Owners / parents wear at least two hats: parent and owner. An owner’s adult child also has at least two: child and successor or non-successor. The trick is knowing when to put on each hat and shelve the other. Once owners and
It may be natural to talk about the family business—whether long before or during a transition—when family members gather for holidays, but is it smart? When families, family business, and the holidays converge, it’s natural and convenient to talk about business because, well, everyone is present in person. Having business-related conversations in person—especially those that relate even tangentially to a one-day transition from one generation to the next— is far more effective than video or audio calls, texts, voice messages, or emails. In-Person Interaction From life experience we know that
The role Transition Guides play in family business transitions is critical because their experience, insight, and use of a proven transition process greatly increases the odds of transition success. And, as the frequently quoted statistics indicate, success in family business transitions is not guaranteed or easy. Success in family business transitions means different things to different people, so please allow us to share our definition. For a family business transition to be successful: That’s a high bar to clear, but 100% of the owners who have completed our process (The
In our article “Creating a Business Transition in a Volatile World,” we focused on two words—volatility and plan—to try to shift a common mindset that causes owners to put off transitioning their companies to successors. Let’s dive deeper into that discussion by focusing on the consequences of a decision to delay due to a fear of volatility and a strategy that helps owners embrace—rather than fear—volatility. A Tale of Two Owners Chris and Lee are two fictional owners. Their boats are metaphors for their businesses, their passengers for their successors,
