The Greatest Wealth Transfer: Ensuring Success in Family Business Transition

Episode Description:

In this episode, host Elizabeth Ledoux is joined by Doug Johnson. Doug is the Denver chair of TIGER 21. Throughout his career, he’s been a stockbroker, he’s worked on public private partnerships, he’s worked with the Department, and he has introduced a socially responsible investment firm to his community. Tap or click the play button below to listen to: The Greatest Wealth Transfer: Ensuring Success in Family Business Transition.

In this episode, Elizabeth and Doug discuss the importance of communities thriving forward, particularly in the context of family businesses. They also explore the challenges of knowledge transfer in family businesses, highlighting the need for a well-thought-out plan to pass on not just financial wealth but also the wisdom and experience crucial for success. They also touch on topics such as generational wealth transfer, the value of a long runway for succession planning, and the delicate balance between maintaining traditions and allowing for innovation in business. 

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The Greatest Wealth Transfer: Ensuring Success in Family Business Transition Transcript

Doug Johnson: And yet those who have done the deep work and are really excited about what’s next step into that very easily. Those who haven’t struggled mightily. And you know, we’ve all seen it done. I think about one of our community leaders who served in a leadership role, now more than a decade ago, who still identifies as that former leader position. Yeah, and here we are more than a decade later. And that’s how he chooses to introduce himself because he just can’t let that go. And I, my heart goes out to him that he has yet to find his tooth, and still needs to identify as his from.

Elizabeth Ledoux: Welcome to the business transition roadmap. My name is Elizabeth Ledoux. And through my years, I have seen how communities thrive. When business succession and transition are done. Well, me and my team at the transition strategists have been helping business owners develop and implement transition strategies for over 30 years. And on this show, we want to help you by giving you the roadmap to a healthy business transition. Let’s get started. Hi, everyone. And welcome back to our podcast today. I am thrilled to have Doug Johnson with me. Doug is a colleague of mine, we are both Tiger 21 chairs in Denver, Colorado. And Doug has just an amazing background with people, businesses, finance. I’m excited because he’s gonna bring some great thoughts and some great things to us today. So Doug, welcome. And thank you for being here.

Doug Johnson: Oh, Elizabeth, thank you. It is a pleasure to be here. And I’m honored to be asked. Good,

Elizabeth Ledoux: good. So I always like to start with you telling just a little bit about you your background and how you got here.

Doug Johnson: Oh, well, thank you. I’m one of those rare Colorado natives born and raised in Fort Collins. And everybody asked, Why didn’t you ever leave? And we look around and say, why would we and, you know, have just been blessed with great mentors and great experiences here in Northern Colorado and Colorado in general. And really started out with Charles Schwab down in Denver, started as a stockbroker, and then went through their leadership academy ended up managing trading teams. And the way the universe works, there was a Doug Johnson who was buying the furniture for branch offices across the nation. And the VP out of Boulder emailed him and said, How are we coming on the furniture for the Fort Collins office? Wrong, Dave Johnson, but the right one to open that office in Fort Collins. Okay, I called the VP and said, It’s me, I’ll do that. And so that was a lot of fun. That got me back to Fort Collins to open up the office. And just went from there and met one of my great mentors, through that process, who said, you know, this is all well and good, but what’s next for you? And really thinking about my transition now that I’m back in Fort Collins. And I said, Jim, what do I do, and he said, You need equity, you need to be a part of building something. And that really landed on me. And so I went and helped him with startup private Trust Company. And we grew that and had a lot of fun growing that and got a chance to work with a lot of great business owners in our community, and a lot of experience there. And then that led me to different paths. first Director of University connections, working with the President, the university, the mayor of Fort Collins, and the president of our Community Foundation, on public private partnerships. And then working with the Department of Defense, on sourcing all renewable energy technologies for demonstration at the base, introducing a socially responsible investment firm to our community. And then eventually, working with my good friend Mike Freeman, CEO of the manosphere and supporting our startup community, primarily by identifying and sourcing capital sources, angel investment, corporate and strategic partners, and venture capital that could support the startups in our community around biotech bioscience, clean tech and software. And it was through that journey that a family office friend said there’s a group out in New York called Tiger 21 That might be interested in Colorado. And I looked them up I thought it was a New York angel investment group emailed him and said, we’re on the street is you’re interested in Colorado, here’s my LinkedIn profile. How can I help? And two minutes later, I get a phone call and quickly learned it’s a peer learning group for very success. as well, entrepreneurs who are thinking about what’s next, fell in love with the organization, went out to New York met the founder, met a couple of members, and signed my contract in August of 2015, to start and deliver groups here in Colorado.

Elizabeth Ledoux: So Doug, what an amazing story. And isn’t it? Isn’t it great how, throughout our lives, some of the turns of events land us in just the perfect place at the perfect time?

Doug Johnson: Oh, very much. So. I always say that everything in my background prepared me for this moment in time. Yeah. And I just didn’t know what at the time I was going through it. Yeah.

Elizabeth Ledoux: So So what are one thing that I want to dive deep into with you is just the concept of my mission. And my mission is to help communities Thrive Forward, whether it is a community within a company, right that employee community and the community with the clients and the vendors and those kinds of, you know, people that are around that, or even expanding that into greater communities, which you have a lot of experience in with the atmosphere and other things along those lines. So when you have seen those communities thrive, what has worked in those what do people what are they doing that makes that work for them? Oh,

Doug Johnson: my goodness, that idea of a community that thrives, just lands on my heart so positively. And in thinking about that, it really comes back to people and culture and leadership. And this is part of our culture is to thrive, to create a platform where our employees can thrive, where our community can thrive, where our business can thrive, where our families can thrive, and really thinking about then what are the elements that we need to put that into place. Now, if that’s our culture, then the strategy that supports that, and that exponential effect, ripple effect, that when we have that in place, how that ripples out through our communities, of I’m doing good business, I’ve got good family relations, I’ve got good community relations, and we are paying it forward through good pay good benefits, supportive our community through sponsorships, through community engagement, leadership, volunteerism, it is such a rich fabric that we weave through free enterprise through business, and particularly private business family business, that is really the backbone of our economy. 

Elizabeth Ledoux: Yep, I totally agree. It is truly the backbone of our economy. And and as we go through this greatest wealth transfer, in the world’s history, literally, many, if not a good majority of our businesses are going to change hands, whether it’s within a family, right generation to generation family, or whether you think of it as generational just from one generation to another that are nonfamily two different kinds of transactions and transitions, typically. But there’s a lot of wisdom and knowledge that needs to be transferred in this to make those businesses continue forward. Well,

Doug Johnson: yeah, absolutely. It’s not just a transfer of the wealth, the financial wealth, it’s the wealth of knowledge and experience and and what is your plan to transfer that? It’s really easy. I don’t say it’s easy. Anybody who’s gone through a transaction knows it’s not easy, it’s not easy. And yet, we have great advisors who can help us transact our business, whatever it may be, whether it’s to private equity to family members, to next generation to the employees, whatever your transaction is, how does that what is your plan to transfer that knowledge and wisdom, right, that keeps that allows that next generation that’s coming in to learn from the past, while having our eyes on the future, and not have to start from scratch, not have to reinvent the wheel, not have to figure things out? Here’s kind of the blueprint that worked, knowing that some things that worked in this environment may not work in this environment. But there are elements and nuggets of wisdom that we can draw on that can be our guides as we navigate the future. And what is the plan? Do you have a plan for your knowledge transfer? Yes.

Elizabeth Ledoux: Yeah. And, and the knowledge transfer, I think is I think it’s one of the most valuable pieces, because we were talking earlier about an owner who’s been through what was it it was for downturns for recessions and So just the experience of managing and running a company and going through the ups and the downs, and the building of it, that entrepreneurial spirit of being able to build it, helping you forget, I think, as an owner, how much knowledge you have that experience, it just exists, it’s just within you. And so, you know, it’s my thought and that it takes, it takes a lot of time to get that knowledge transfer to happen, which is why I like the idea of long timelines and runways versus events.

Doug Johnson: Oh, my gosh, absolutely. That it is a journey. And that journey is experience, you know, I always like to say there’s nothing new under the sun. And if you go back to medieval times, the guild system, the apprenticeship, these were lifelong journeys to learn these skills, and these trades, they just didn’t happen overnight. And if we apply that same thinking to key employees, or family members, and bring them in and start sharing knowledge over time, so that when we do get to a point where a transaction makes sense, then they’re positioned with the knowledge to successfully step into that ownership role. And take it on, because you’ve spent all of that time in that apprenticeship. Knowledge Transfer, as much as knowing how to run the business, and the nuts and bolts in the financials of the business. Right.

Elizabeth Ledoux: So So basically, the successors learning curve is very big and very high, they have a lot of different things that they have to learn, in order to run a business successfully, and help it survive and thrive forward. Yes, two different things,

Doug Johnson: oh, my gosh, absolutely. And the owner of the business, or the one that is transferring the knowledge, and the business, understanding that this is the way I’ve done it, this is the knowledge I have, this is the experience I’ve had, take it for what it’s worth, and then step back and give space to the person who is taking the business, and let them absorb it and apply it in a way that works for them. And in the environment, in the economy that they’re facing going forward. Without judging

Elizabeth Ledoux: Well, without judging them that is so hard to choose to behave in a way that is so difficult for an owner to be able to do that, because they’ve been engaged and building and growing. And that’s been, you know, their thing, that’s part of their purpose in life. And they’re fulfillment, and so to be able to hand it off, and then watch the mistakes, and watch all of that, you know, all of those different things, and then even have hope that the whole thing isn’t going to fall apart if their successor takes it in a direction that they don’t understand new technology and new new things. Yes,

Doug Johnson: yeah, indeed. And we see that all the time in wealth transition and business transition, where and a lot of times in estate planning that goes with that, or financial planning that goes with that one of the things we caution about is ruling from the grave that you put policies and procedures or you want to pass along a culture that doesn’t allow for innovative innovative thinking or new thinking or reactions to a changing economic environment. And this is the way we’ve always done it, this is the way we will always continue to do it. And if you’re not doing that, this way, you’re a disappointment and it’s wrong. That’s heavy, that is heavy. And so how do we back that off and say, I’ve got to trust like a parent and a child business owner and my baby, I’m giving you my baby to run and take to the next generation. I hope I’ve trained you and passed along enough knowledge that the world won’t eat you alive. And I can sit back and enjoy you as you

Elizabeth Ledoux: make this thing your own. Yes. And as you grow as a person, and you grow in your experience, and you continue forward. Yes. Because you know, and in Tiger, we talk a lot about generational wealth. Yes, yes. And a business. You can look at the business in a lot of different ways. But personally, I’ve family office is a business because it’s got a lot of the components. It has assets, it’s got investments, it’s got taxes, it’s got cashflow, it’s got potentially people and employees and it’s got all the components of what a business would have. And so whether it’s a family office or an actually functioning operating service company, or you know product company, as you look at that, the ability for that thing to go forward depends on the entrepreneurialism of the next generation. So if you don’t get somebody who is willing and able and inspired to continue to build and grow the business and the company, it’s very difficult for that community to Thrive Forward, you have to have it, no doubt.

Doug Johnson: And I think you nailed it in, you’ve got to have clear expectations, clear policies and procedures, clear communication, and a high bar of excellence that we are, this is a functioning business, whether it’s our family operating business, or our family office. And in order for it to Thrive Forward, don’t automatically assume that because we share a last name, that there is a spot for you in this business, correct. We we need to ensure that you have the skills and the training and the knowledge and the desire to want to take this and habit Thrive Forward.

Elizabeth Ledoux: Absolutely. You know, I There are a couple of stories that popped into my head, and we’ve just been working with a family just got back a week ago, from a great retreat, it was a full week. And it’s a it’s a family office kind of a family. The four owners are in their late 70s, kind of mid to late 70s. And they’re working on figuring out what they want, so that each one of them can have autonomy in shifting over their assets, because they each on 25%. So you get autonomy and shifting it over. And they want harmony between all of them, because they need that next generation to come in and want to work together, versus coming in and going, Oh, this is mine. And we’re gonna pull this thing apart. So that’s not their culture, right? They want them all to work together. And just that idea of the family, doing a little bit of planning ahead of time, allows them to know what they want and have that communication. And then bringing in the kids, which is general the kids are in their 50s and 40s, which is not unusual, especially in these times, people are living longer in their health for a longer period, bringing in those kids, their Runway Right now looks like it’s seven years or more that they’re going to be able to bring their kids in, enjoy being with them, teach them, help them mentor them. And in that environment, they’ll have go from four owners to like 20 Wilders. So with the 20 owners, they have to pick the right people to run the business forward. And it doesn’t matter really, if it’s the right last name or not. It’s the one who’s going to steward the assets, the one who’s got the knowledge and the skill and the background to carry this thing forward.

Doug Johnson: Oh, Elizabeth, I love that. And you think about the succession of family business in particular, you’ve got the founder. And then you’ve got the children, maybe two to three, three to five children. And then by the third generation, you’re maybe at 10 to 15. And by the fourth generation, you may be 60 428. And so you can see that most most businesses in that type of succession fail because it’s death by committee. And there isn’t that clear vision of we want this to Thrive Forward. And yes, we’re all owners, but that doesn’t mean we’re all operators, ticking the right operators, to to represent the owners interests, but to operate it to that it continues to thrive forward and feed the generations and feed our communities and flourish in the communities that we’ve created.

Elizabeth Ledoux: Yeah, and and to that point, you know, in what I’ve seen, is that businesses need to have a different governance structure in order to be able to make that shift. So let’s say your one owner, two owners with, you know, a few people coming in the group is small enough that the communication can happen. And you don’t have that large shareholder group over here or owner group over here, if there it’s an LLC, right, you don’t have that owner member group. As you get them as the group grows, though, you have to have the governance where people can make decisions and the owners, they benefit from all of those decisions so that I’ve seen a big shift in the governance structure. My gosh, it has to happen if they don’t make it, it doesn’t work very well. Governance

Doug Johnson: helps solve a lot of things especially around setting expectations. Mm. We have a great story of family experience where in a multi generation business, the CEO who’s a family member, and a another family member, who happened to be a cousin, were active in the business and would use the aircraft owned by the business to travel to go look at business opportunities. The family members not involved in the business saw the use of the private aircraft as eating up their inheritance. And so it was necessary to take a big step back and set policies and procedures around the use of the aircraft for business purposes. That gave assurance to the family members that this wasn’t joy, writing and burning up the inheritance that it was to help the business thrive. So that everybody was successful.

Elizabeth Ledoux: Yeah. So that then there was an ROI Return on Investment just for the shareholders. And that, that as the family comes together, and we’re we are talking about only family business and not partnerships right now, or, or single owners. But as as that grows, that the business relationship in the business culture, and the owner culture over here, is different than the family. And you end up with inclusion and exclusion, right? Because sometimes spouses are included, and sometimes they’re not, and those kinds of things. So it’s it’s really interesting as your, as the generations grow, in your example, how the structure makes such a difference, in order to keep expectations clear, and that people can communicate well,

Doug Johnson: oh, my gosh, Elizabeth, you bring up such a great point. So many of our great family businesses are woven in to the family. Yes. And so in order to success, the ones that have successfully passed on, through the generations, have been able to successfully separate that out, that will always be family. The business is the business. Family is the family. And yes, it’s a family business, but we’ve operationalized and professionalized the business, to operate independently of the family, so that we can properly set we can have transparency, accountability, professionalism, and know that at the end of the day, whatever happens in the business, the family’s always good. Yes. And our joy or an agony as a family is not tied to the profit and loss statement of the business. That’s right.

Elizabeth Ledoux: And it’s interesting, because I in as I think back in some of our projects that we’ve done in some families that we’ve worked with, a lot of families shy away from that, they, they don’t really want that separation, because they think that they are excluding people from the company. But what really actually happens is they give clear boundaries, and they give the opportunity for an invitation to be offered for people to choose to engage or not engage. And for people to live the life that they want to live their dream instead of their parents dream or their family’s dream, because with the structure, you actually know what you’re saying yes or no to yes, you know, what the boundaries are, it gives freedom actually, it sounds like it’s sort of like going into prison. But you know, because there are all these rules and expectations, but it’s actually the clarity gives freedom. Oh, my

Doug Johnson: gosh, absolutely. You’re free of the unsaid or the you’re free from the weight of expectation? Because it’s very clearly written out what that expectation is, yeah. And I can choose to engage or not engage as a family member. I’m not bound to it by birth.

Elizabeth Ledoux: That’s right. So then, we’re talking about some amazing things as far as governance and communication and some of the big things education and transferring knowledge. And if you package that up, the people who were responsible for doing that work, are the current owners, and it’s great if they, it is a lot of work, but it’s great if they can do that work a little bit early on. There’s a lot of planning that goes into this and preparation for these invitations to go out properly.

Doug Johnson: And I can imagine some people listening in today, as business owners are thinking, Gosh, Elizabeth, and Doug, that all sounds great planning ahead and doing all these things and setting up governance and policies and procedures. I’m trying to manage the business in front of me and you know, I’ve got somebody calling in sick today and all of these things, and where would I find time to do all of this? And that’s why it’s a journey and it does take time. It’s not Something that you just put in place, we’re going to sell the business next week, and we need to put in policies and procedures this week. No, that doesn’t work. And it does seem overwhelming, then at that point, but it really is, you know, at some point, we’re going to transition this business, whether it’s to family members, to employees, to an outside buyer, it’s time to start thinking about capturing policies, procedures, and professionalizing the business so that whatever path we choose, which, again, the freedom now of options, yes, that those are in place, and when we get an offer, we can’t refuse wherever that might come from, we’re ready, we’re ready.

Elizabeth Ledoux: Well, and and included in that professionalizing, the business over here, which is an amazing point, the other part of it, is actually doing a deep dive into yourself. If you have multiple owners, it’s doing each one of them doing a deep dive into themselves. And then sharing that marrying all of that together. Because the you understanding how you want to live your life, how much money you need, how you would like to see this business move forward. You know, and and then thinking about what’s your purpose in your life going to be? How are you going to be happy and fulfilled afterward? I think that there’s a lot of internal work to do to not just professionalizing over here and trying to let go, but you, you need to be able to understand what you want. And then how you’re gonna go get it.

Doug Johnson: Oh, my gosh, Elizabeth. Absolutely. And I think about this brings to mind, a very particular business case owned by three siblings. And one sibling viewed the business as their personal ATM. It was a great cash flowing business. And they were happy to just take that cash out and live their life and their life was defined outside of the business, but they loved the cash flow. The second sibling really saw a clear path to an exit and wanting to be free of the business. And so really struggled with the sibling who was taking the money out, because they wanted to reinvest and build value in the business. And then realize that value at a transaction. The third sibling, identified with the business really used the family businesses entree to clubs, to memberships to sporting events, and was really known in the community as the business Wow, and was terrified at the thought of the other sibling trying to sell it or thinking about selling it. And also, the sibling who didn’t really wasn’t involved in the business, but gladly took the cash out of the business. And so it bred a lot of resentment, there was misalignment. And yet, when they went through the process to identify that this is who we are and how we think about the business, they could appreciate each other, and they were able to find common ground. And that business still thrives today, they sold it to the employees. And everybody got out of it what they needed to get out of it. Yeah. Which

Elizabeth Ledoux: is deep dive, communication, transparency, vulnerability, all of those things that go into this that are all the literally, you know, the subjective intangibles that people don’t actually pay attention to sometimes sometimes you do. But sometimes you don’t you don’t pay attention to that. And then you get to the transaction part. And that’s like, wow, we’re gonna put on the brakes.

Doug Johnson: Oh, yes. Yeah, I’ve seen many are reluctant family member 86 transactions at the last minute by exercising minority shareholder rights. Yeah. Yep.

Elizabeth Ledoux: And yep. Then by that, apparently, they’re in cases. Destroying relationships. Yeah, absolutely. Destroying relationships. Out of fear. Yes. Out of fear. Yeah. Instead of competence and clarity. Absolutely. So in your in your work. We talked about what worked and what you’ve seen, and we had a great conversation in between, what are some things that that you have definitely seen not work in this? And usually, when things are not working, there typically are things that are either confusing or missing? Yes.

Doug Johnson: For me, things that don’t work are typically rooted in the owner of the business not doing the personal work to really understand or answer the question for the sake of what why are we doing all of this is it to honor the family legacy if I’m a generational family owner, or A business owner, is it to honor the legacy? Is it something I’m truly passionate about? Is there an end game for me? Do I have children that want to come do this? And without answering that, and doing that work? It the business almost does become like a prison? That I don’t see anything. Anything else that I could do? Yeah. And there’s so much identity tied up in that, then that they just, they just keep working with no, no reason why. Yeah. And and that’s tough to see. That

Elizabeth Ledoux: is tough to see. That is tough to see. In the end, I think that owners get bound one because of their own personal well being and their own fulfillment. And also, some of that fulfillment gets tied up in their ability to take care of others. Because owners are generous. In my, in my experience, owners are so generous, and they’re generous with their time. They’re generous with their investment in the money, their investment in the people, and just the communities that they serve. So it’s so interesting. Lizabeth,

Doug Johnson: I love that business owners are generous. Yes. And I’ll double down on that, as we think about the concept of philanthropy. And charity, often define or go back to the definition of philanthropy, that philanthropy is really caring for the well being of others. Full stop, it’s not about the tax credit you get, or is it a nonprofit status, or what have you, it’s philanthropy, I care about the well being of others. And free enterprise business ownership is one of the best ways to demonstrate philanthropy, by creating this platform. And you talk about these generous business owners that will carve out out of their own personal proceeds at a transaction, a pool of money to recognize key and long term employees. And then to see here, the letters or see the letters that are written because of that, the difference that it’s made in those employee lives, job creation, path to self fulfillment, the ability to take care of my family, good wages, good benefits, good, honest work. It’s, that’s the generosity, sponsorship of sports teams, the local sports teams, sponsorships of community events, again, volunteerism, inviting in the United Way into your business, to create a culture of giving, all kinds of examples are out there around generous business owners.

Elizabeth Ledoux: Absolutely. And you know what, what goes with that, too, is the ability for the owner to make the choices to do that. And so when they don’t do the work of understanding what they want, and how they’re going to potentially be able to continue to care for others, and what difference they’re going to be able to make when they come out of the seat of ownership, and sometimes even out of the role, because you know, you’re, you’re transitioning over that period of time you transition out of jobs, roles, tasks, and then you also ultimately transition out of the actual ownership of the asset. So there are lot of wins, there are a lot of transitions that go on in a full transaction. And if they, if they don’t do that, or when they do that they actually lose control. And so that’s a big deal of how are you going to let that go? And who are you going to? Who are you going to trust with that? In order to take that forward, hopefully, in a vision, or at least keeping a culture that you have enjoyed as an owner yourself?

Doug Johnson: Oh, my gosh, yes. And I think about, you know, to go back to Lessons Learned or things that didn’t work, you really touched on it. Business owners who go through transition, and don’t understand or anticipate grief, and that there’s going to be a period, I’m going to be angry. Why did I do this? I’m going to be sad, I miss my employees, I miss my colleagues, I miss the excitement of the business. I miss my identity, I mourn the loss of my identity. I am no longer Doug Johnson founder Doug Johnson CEO. I am Doug Johnson, the guy who sold his business. Well, how do you put that on a business card? And what does that what does that mean? And so really being ready for an understanding there’s going to be a lot of grief through this process. And if you can understand that and appreciate it, you’ll be able to flow with it better.

Elizabeth Ledoux: Yeah. Yeah, just making sure that you are whole as best that you can be. Yeah, So anything else that you’ve noticed or seen as people that, you know, have looked at this transition, whether it’s out of a role, right, or the actual transaction, because the liquidity event, again is different. But yeah, anything else that you’ve seen that is missing? Confusing, just hasn’t worked for people, the

Doug Johnson: lack of a clear two, we know what we’re moving from. Oftentimes, we don’t know what we’re moving to. And without spending the time to know what that two is, if I’m no longer are responsible for the day to day of the business, what does that allow my time? Or what? What does the new space of time allow me to do? And allow me to be if I don’t do the deep work? And answer that, that I know what I’m going to and can be excited about what I’m going to, it’s hard for me to leave the from, because that’s the familiar. And I know what to expect in the from, I don’t know what to expect in the to, and that’s where people typically struggle.

Elizabeth Ledoux: Absolutely. And that’s such a great point. Yeah, and how long? Just a great point, how long do you think it takes a business owner once they do that transaction, and they start down that path, to actually settle into the to, to actually experience it and know it?

Doug Johnson: Of course, it’s unique to everyone. And yet those who have done the deep work and are really excited about what’s next step into that very easily. Those who haven’t struggle mightily. And you know, we’ve all seen it, I’ve, I think about one of our community leaders who served in a leadership role, now more than a decade ago, who still identifies as that former leader position. Yeah, and here we are more than a decade later. And that’s how he chooses to introduce himself, because he just can’t let that go. And i My heart goes out to him that he has yet to find his to, and still needs to identify as his from Yeah.

Elizabeth Ledoux: So there’s a There’s a book out. It’s it’s a fairly old book called transitions. And, and the point, to summarize it quickly, that I took away from it was that for every new beginning, every new beginning starts with an end. And there’s this neutral zone, that happens between the end and the new beginning. And that neutral zone is a time where it’s awkward, it feels a little different and weird. And sometimes I think of, I think of things like the business owners on the highway, and they’re moving along, and the business is moving along, and everything’s great. And you’re moving at whatever, 7080 90 miles an hour, and you’ve got the successor who kind of merges on in has to get up to speed and get going. And so pretty soon, you’re going along, and everything’s working fine. And you’re both driving together, and then you kind of merge off. And I liked the idea of that, because as you merge off, it gives you a chance to start to move into a little bit of the neutral zone before you’re just dumped off.

Doug Johnson: Oh my gosh, yes, yeah, that is a great visualization. And that can allow for that travel time between the on ramp and the exit ramp to be as long as it needs to be. And the fact that you can take that ride together, and share that knowledge and share that experience, and then have that off ramp that pre identified off ramp. Man, that’s a great, great visual. And, you know, we talk about things that don’t work. And it couldn’t comes back to communication and assumptions. We have a gentleman that a great business, just a beautiful business. And he he always assumed that his children would join him on that highway, and just a really fun business really enjoyable, very profitable. And when he invited his children to get in the car with him on that journey, they said no thanks. And it was so devastating to him because he had assumed all of this time going down the highway, that they would just jump in the car and go for the ride. Yeah, because he’s having so much fun. And when they said no, it broke his heart, and he couldn’t see anything further beyond than to just stop and he shut the business down. Wow, all of this enterprise value, all of this knowledge, all of these jobs. just disappeared. Yeah, because he couldn’t see a path forward and had assumed that his family members would come and take over the business. Yeah.

Elizabeth Ledoux: Which goes back to things that work communication. Open communication. And, you know, even in our Tiger work together, we talk a lot about, you know, when the communication but when when do you start it? And it’s frightening, actually to start that communication, especially at the, you know, even a young age, because I think, I think that sometimes you feel like you’re making promises or, but if it’s just the conversation, and you’re just learning and growing and sharing and sharing information. I think that that fear can be mitigated. But the fear sits there, and it usually keeps people from having the conversation that may have shifted, if he would have known that that in your example, if he would have known that earlier. His thinking and decisions could have been different. Oh, my gosh, all the way along in the business might still exist. Yes.

Doug Johnson: And to see that enterprise value destroyed and destroyed, maybe as a harsh word, but just shut down. Shut down last. Because because of that is really sad. Yes. And in talking with you two things come up for me. First is the number one question in Tiger is how much money should I give my kids? And when? And the answer is, get ready for this? The answer is any amount is too much for an unprepared heir. So that’s that’s the first thing. Okay, well, then when do I start preparing them as soon as possible? Yesterday, not today, yesterday, we should have been preparing them just conversations. And talking about the business talking openly, you don’t have to tell the whole picture. But at least talking openly that it’s not a secret. It’s not something to be ashamed of, it’s not something to hide. Here’s what I do. Here’s how I do it come down and spend some time with me. And what I found is the corollary to that the members that we work with, who have successfully transitioned into generational business almost all share that they started in the business, sweeping floors in the warehouse at eight or 10, or 12, or helping out or going to the office are at a very young age, and were acclimated to the business with no expectation that they would be a part of it. But because they were integrated into it, they saw the opportunity they saw the path and could successfully merge onto that family business highway. Yeah. And see themselves in that role.

Elizabeth Ledoux: That’s right. That’s right. Amazing. Amazing. Wow, what an incredible conversation. This is Ben. Yeah, yeah. So one, Doug, thank you so much for sharing this time with us and all of your thoughts and Elizabeth truthers back pleasure. Thank you. And I always like to ask at the end of every podcast, what one thing? Would you like to leave with our listeners in our audience that you’d like them to take forward?

Doug Johnson: Oh, my gosh, thank you for that. My one thing that I would ask everybody to take forward is start today. Whatever that is, start today. Pick up the phone, call somebody you love. Tell them, tell them you love them. Tell them you’re thinking about them. Tell them that. Start talking about the business. Start it reach out to Elizabeth and her team start the process. Just that one step start today. Because we’re not guaranteed tomorrow.

Elizabeth Ledoux: Very good. Very good. Well, again, thank you so much for being here. And I just I could spend hours with you. So everything, and yeah, yeah. Blessings to you. Oh, thank you, Elizabeth. It’s a pleasure. Thank you. Thank you. Thank you for listening to this episode of the business transition roadmap. If you’re listening to this and you find yourself wanting to go deeper into these topics and start the process of putting together your transition strategy. I’d love to offer you a free initial strategy session with my team, where we’ll help you to explore the future transition of your business, head over to www dot transition To schedule a call. Thank you again for listening. And I’ll see you on the next episode of the business transition roadmap.

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.

If you’ve enjoyed this podcast, you can check out other episodes here: Podcasts – The Transition Strategists
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