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, and their journey for the transition out of their businesses.
Meet Lee.
Let’s imagine that boat owner Lee wishes to travel from Point A to Point B on the Blue River. He’s tired of being a captain and wants to do other things with his life, but he’s heard about the river’s treacherous currents and rapids and knows that wild storms can blow in quickly and seemingly out of nowhere. Given these potential threats, Joe decides to put off the trip year after year after year.
When Lee’s wife is diagnosed with cancer, he feels he has to act—fast. Lee chooses a passenger and decides that the passenger will row the boat while Lee mans the rudder. When he arrives at Point B, Lee plans to disembark to spend time with his wife, and the passenger accompanying him will pay Lee for the boat and become its new owner and captain.
Once underway Lee’s passenger decides he’d rather fish than row and tosses the oars overboard in the hope that Lee will understand that captaining a boat is not for him. Lee does his best to keep control of the boat using the rudder but soon finds himself in the rapids he feared. The boat’s rudder hits a rock and cracks in half while Lee is still far short of his destination. To make matters worse, Lee is stuck in a boat with a passenger who has failed to live up to his expectations, and he’s without a means of propulsion or control.
Meet Chris.
Chris is just as concerned about the Blue River’s rapids and currents as Lee and also wants to travel from Point A to Point B. Before embarking, however, Chris consults an experienced guide who has helped many boaters navigate the same river. The guide asks Chris (1) why getting to Point A is important to him; (2) what type of boat Chris has to reach Point B; (3) whom Chris will invite to accompany him on the journey; (4) when Chris hopes to arrive; (5) how Chris will transfer the privilege of captaining the boat to his passenger; and (6) how much cash Chris will want or need from the passenger when he reaches his destination.
Chris uses his answers to describe his transition strategy to his passenger and invites the passenger to accompany him. The passenger accepts Chris’s offer and commits to learning how to row and, one day, operate the rudder.
Working together, Chris and his guide set markers for the journey so Chris and his passenger will know if they are making progress toward their destination. If not, they will adjust their strategy.
Once underway, Chris’s passenger struggles with the oars, but Chris is there to teach and coach him. When the passenger drops an oar, Chris retrieves another that he has stowed in the boat. Soon the passenger masters rowing, so Chris teaches him how to steer the boat. When the boat hits the same rapids Lee encountered, Chris can see how well his passenger has absorbed his guidance. If he’s uncertain at any point in the journey, Chris has access to his guide for navigation advice.
Lee who hesitates is lost.
Excuse the pun, but Lee lost a great deal when he let his fear of volatility determine the timing and terms of his transition journey.
- He lost the opportunity to involve his passenger in decisions and enjoy the comradery.
- He lost the opportunity to see how well his passenger could steer the boat in tough circumstances.
- He lost invaluable time with his spouse.
Even if Lee eventually reached Point B, he paid a high price. He also arrived alone and likely disappointed in, if not feeling betrayed by, his passenger. This outcome reflects the potential consequences of poor communication and lack of shared vision –that led to misaligned expectations and a breakdown in their working relationship.
Fear of volatility kept Lee from starting on his journey and an unexpected change (his wife’s cancer diagnosis) forced him to scramble to respond. Without a thoughtfully prepared strategy, chaos ensued.
Embracing Volatility in Business Transitions
Instead of letting the fear of volatility control him, Chris embraced it by devoting time and energy to creating a transition strategy (or what we call a Transition Roadmap™).
- Chris established his personal and financial goals for the journey. If Lee had specific goals, he did not communicate them with others involved in his journey.
- Chris knew that his passenger was interested in accompanying him on the journey because the passenger accepted Chris’s invitation. Lee never asked if his passenger wanted to take the journey, so was surprised to learn that his passenger had other plans.
- Chris set clear expectations (or milestones) for the journey, so he and his passenger could accurately gauge their progress. Lee certainly had expectations, but did not communicate them, much less establish a strategy to meet them.
- Chris recruited a guide who used the process that has helped 100 percent of the owners who have used it reach their destination and leave their boats in the capable hands of captains prepared to continue successfully without them.
We are those Transition Guides, and the process is our Transition Roadmap Developer™. If the fear of volatility keeps you from pursuing your dreams for the successful transition of your business to a new generation of owners, give us a call. You can also join one of our monthly Collective Conversations for a free 50-minute discussion with our experts to explore how we can guide you through your unique transition journey. We’d love to help you.
