The Role of a Leader In a Business Transition with Debbie Davis

Episode Description:

In this episode, Elizabeth is joined by Debbie Davis, one of the lead transition guides at the Transition Strategists. She’s here to talk about leadership, and how the role of a leader shifts and changes throughout a transition. Business leaders go from running and operating their business to becoming a mentor to a successor who will take over their role, and all of their skills and experience as a leader make a huge shift during the process. Tap or click the play button below to listen to: The Role of a Leader In a Business Transition with Debbie Davis.

You’ll get Debbie’s insight on the leadership skills needed to successfully transition out of a company, as well as the leadership skills a successor needs to take over. She’ll share some amazing success stories from past clients whose leadership abilities led to a successful transition.

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This episode was produced by Story On Media & Marketing:

The Role of a Leader In a Business Transition with Debbie Davis Transcript

Elizabeth Ledoux: Hi everybody and welcome back to the Business Transition Roadmap Podcast. I am just very, very fortunate today to be here with Debbie Davis, who is one of our lead transition guides at the Transition Strategist. Um, it’s fun for me to be able to work with amazing people and amazing guides because every transition guide that we have, In our firm actually brings a little bit of a different knowledge and background and experience to our team.

Debbie’s real forte is in leadership, and today what we’re gonna talk about is how leadership really shifts and changes as an owner goes from running and operating their business to leaving their business, um, to being that mentor that. Helps somebody else a successor come in and do well. So how does, what kind of leadership skills do they need to have to do that, and how do they shift during this transition time?

And then we’re also gonna talk a little bit about the successor side, because the successor also has usually some new leader leadership skills that they’re trying to figure out and that they’re bringing on board. So Debbie, welcome and thank you so much for being here today. It’s so fun to have

Debbie Davis: you.

Gosh, thanks for having me here. I’m excited to share. Um, I’m excited to have the opportunity to brag on some of our clients and, um, talk about what they bring to the table in terms of leadership and what they’re looking for in their successors. So just happy to be here. Thank you. Um, in terms of, um, In terms of our leaders that we work with, the CEOs specifically, the things that I feel like we see in our clients are a really nice balance of business acumen and then also care for their people.

You know, they are. They’re super agile in knowing that the business decision impacts the people and then also, you know, that their people have to be on board and just love watching them balance that and, um, and take such genuine care and interest in, in their folks. Um, And it’s fun to work with them then, right?

They’re, they’re very caring, loving people and, um, passionate about their business, passionate about their people, and it just makes it all just so much fun to work with. Um, I think one of the things that we see in terms of the transition around our, um, you know, let’s say maybe the 55 years and older folks, Is, um, they’re recognizing that there is a shift in the business in how to, how the business is operated.

And they’re seeing that their skillset that they had when they first started the business is different than what is needed to run the business today. And, and they’re open to looking at themselves differently and saying that this business needs a different leader. And they’re not afraid of hiring someone who is smart, smarter than them.

Possibly. They’re brave. I think they’re courageous. It’s a little scary to

Elizabeth Ledoux: think about,

Debbie Davis: oh my gosh, somebody being smarter than see that. Yeah. And I feel like, you know, that’s a, that’s a, a dance that one day they do really well and it’s easy, and the next day they wake up and it’s like, ooh, it’s kind of scary.

But they step there anyway. They go forward anyway. And, um, and I think our process supports them and I love that we have the opportunity to coach them through that, guide them through that, that transition because they’re, they’re very vulnerable. And that’s not normal for where, you know, for them typically, you know, you know, the entrepreneur is this big, brave person that just is taking on the world and very comfortable.

And the reality is, um, that’s a scary place and they can put on a great, um, not a front, but they put on a really good. They present themselves really well and brave for the rest of their team. They’re creating that beautiful vision. They’re creating the, um, the strategic plan to go forward and. Sometimes they don’t know all the answers and they, they continue to push forward and, um, and we get to see the vulnerable side of them that says, Hmm, I’m not a hundred percent sure, and this sounds a little scary.

And we can walk through that, um, with them. And it feels really, feels like a nice place to be. I enjoy being there with them.

Elizabeth Ledoux: Nice. Nice. So, um, when you look from Yeah. Your background. What are the primary skills that an owner or founder has as they build and grow their company? They’re active in it and they’re working in it.

So let’s start there. What are some of the, what? What are some of the skills that they have that more than likely have been a foundation for their success?

Debbie Davis: Tenacity, you know, um, There is a, there’s a hope, um, assessment and, um, I think leaders that we engage with have this high level, level of hope that you don’t need an assessment to be able to see. They’re just very resilient. Um, and it’s interesting. It’s, it’s not always the folks who have been handed everything on a.

Silver platter. It’s the folks that have learned resiliency through trial and error. It’s not that they’re flawless, they’re very, um, very resilient because they have fallen down and gotten back up and started over. So I would say, you know, they have a high level of hope, a high level of resiliency based on.

Having been there, done that, meaning they’ve failed forward. Um, and then of course, um, you know, acumen, business acumen is important. I think there’s a level of intuition that compliments that business acumen. Um, you know, it’s not just book smarts. It’s, it’s the ability to know when to apply that. In what situation?

And then I, again, back to, um, agility, the balancing of the business along with, um, people, they take care of their people. Um, I like to say they balance profit and people well. Right. Um, In terms of leadership, I think a couple of the things that I measure in the work that I do is communication and relationships and then alignment.

So those are the, the big metrics that we cover, um, specifically. And so recognizing that, and we do this in our work, um, recognizing that you and I don’t communicate the same way. Nor should we. And that’s a beautiful thing. And we normalize that conversation instead of looking at each other as if we might be wrong.

So I think leaders see that people communicate differently and, and celebrate that and bring that out in their teams and themselves. And then building on relationships. Um, the foundation of relationships is trust. Yeah. And one of the things that, you know, I had that before you and I met, but one of, one of the things that.

Joining our team, the transition team, transition strategist team, I think that is gold is assuming good intent. And the minute you start applying that and if you live that, it changes that judgment into curiosity and you can’t help but be curious in that space. And so I think. Without a shadow of a doubt, our leaders have to remain curious and, and often they do, but you know, it’s hard to, it can be hard.

Um, and then alignment, of course, you know, they need to, our leaders need to create a vision that is exciting. They need to hire teams and people that can accomplish what their vision is and let them go and, and, That’s where that trust piece comes in. Let them go and, and create what the vision, the vision is that they’re trying to create.

Elizabeth Ledoux: Yeah. Yeah. And, and I. Assuming best of intent in or just, yeah, best of intent in general is one of my most favorite things. Oh. That I’ve learned over many, many, many years. It’s hard to do at times, but it does change your life and it does apply to life in general, like any relationship that you have. So thanks for bringing that up.

Um, and yeah, the idea of. Communication ability to create relationships, keep those strong and, and you’re completely correct that the people that we really enjoy working with the most are people who care about themselves, their families, others, the community. Just because of our mission. Um, you know, we want, that’s why we do what we do, is to help communities thrive forward.

And people need to be able to do that themselves, cuz that’s how the communities are built. So, um, when you, when you see a, an owner, founder, Especially a founder, um mm-hmm. Start to move into the transition role, right? Transitioning out of not only their job today, uh, letting somebody else do that job, and, um, mentoring and teaching them to do that, but also at some point in time, making the additional transition of the equity side.

Right? Mm-hmm. So no longer being an investor in the business. Also, what skills, how do the skills change and what new skills need to be brought on board in order to help that successor do well, and also help the owner, founder move on to a next adventure? I love

Debbie Davis: that question. I would say back to communication, but before even getting to that point, you know, they have to.

Before it, they have a conversation with their team. It’s getting to that space themselves and in alignment themselves. And what we see is, you know, there’s, there’s a lot of thought, a lot of sleepless nights for the founder prior to joining our group. And that goes away about halfway through our process where they get to see the vision.

And it’s fun because, you know, when they get to, we finish the compass and it’s so exciting to see the look on their face. And you see the shoulders drop. You know, they’re, they’re at peace with where they’re going. They have clarified so much of what has been keeping them up all night, where they’re heading.

And so you see that calm, if you will. And then the next phase of that is, oh my gosh, I have to put some of this into, into action. And so it, it shifts for them, to your point, you know, it’s, they’ve created the vision there in a good place. They feel good about it, and now they have to be, they have to step aside.

And that, that’s a scary place to be. And it does for sure require a different set of skills. And it’s, the communication changes from creating the vision, um, and being in charge to listening and, and, and not that listening isn’t part of communication prior to, but it’s more listening. It’s, it’s clarifying from that perspective and stepping into, um, a less, less of a leadership role, but more of a mentorship role.

Mm-hmm. For their team, for those successors, I think it’s also listening and clarifying. One of the things that we talk about in the work that we do is they, our leaders may see a successor and having that conversation to say, well, do you really want to be the successor and listening to make sure that that successor genuinely wants to be part of our, that.

Be that leader. Right. Um, so I see listening being a big, um, component. I see, um, trusting that those folks will, um, will do what they say they’re going to do. And stepping aside, we had, um, one leader just recently, one owner who just recently we had a conversation with her and she thought, you know, no way could the person.

Be the successor. And I remember you and I were on the call and you said, well, is it possible that she can’t be the leader because you are in the way? And so I think reali, you know, having that hard look in the mirror and saying, gosh, how am I preventing this person from being the successor and, and making these decisions and growing.

So, you know, they’re stepping out of the way. They’re trusting and they’re supporting as opposed to, um, taking everything. So, and that’s a big shift. It’s a scary shift for them.

Elizabeth Ledoux: Well, it’s a, it’s a huge shift and it’s, you know, behavior is, behavior takes a long time to change because most of what we do day to day, like 99% of it is on kind of automatic and mm-hmm.

Uh, it takes time to, you know, for example, it takes time to change the way that you sleep and how early you go to bed and takes. Time to change your, how you eat and what you do and learning to cook differently, whatever you’re gonna do there. And this is a big one because a lot of these owner founders have done this same thing.

Gone up, gone up, you know, gotten up, gone to work, come home, um, day after day, and are constantly thinking about how to build and grow the company, how to keep it healthy. Um, instead of, you know, that shift of how to let it go. And how, and how to help somebody else build and grow it. Um, so it, it’s a huge behavior shift to be able to do that.

And it’s not, it’s something that you have to be really conscious of. So the practice becomes, um, really important when you’re implementing your now new transition vision versus the build grow vision. Um, Right. The compass helps ’em to get clarity on the transition direction. Mm-hmm. And that strategy, which is different, uh, and then they’re implementing that transition strategy, getting out of the way.

Yeah, really an

Debbie Davis: interesting thing. A and it, and it’s hard, you know, it’s, to your point, it’s so, so incredibly difficult. I love, you know, the, the synergy that hap or the, not synergy, but the, the relationship develops into, um, more of a mentorship and, and it’s so good when they can make that transition. And they can realize that that is their role and they, they aren’t completely out if they don’t want to be.

You know, we have so many of them who stay along and maintain the relationships that they’ve had in the past with the clients, um, and sit in a mentorship role and, and when they can clearly see that. What their role is. It is so incredibly helpful, I think. Yeah. As opposed to what do I do now? Because they don’t sit well.

That’s right. They do

Elizabeth Ledoux: not sit well. So, um, yeah, and that just brings to mind, um, just yesterday talking to, uh, an owner, founder, um, who’s done extremely well. Um, he’s preparing to take, he’s preparing to sell to his internal lead people. Um, one who happens to be a family member but not a son or daughter.

Mm-hmm. And he also though, is preparing then to, he’s only gonna sell a portion of it and he’s gonna put a portion of it into an llc, bringing in his wife and his children. So still being, it’s, it’s kind of an interesting. Strategy. Mm-hmm. Um, and I’m telling people this because there are so many different ways that things can come together.

So he, he is going to have a portion of the company that he still owns, so he is still active, but bring in his, you know, immediate family, wife, and kids. Um, give them an opportunity to have some. Income, um, some dividends that come off of the company, but actually sell it so that it continues forward.

Because his goal isn’t the money altogether. He needs the money to actually, you know, mm-hmm. To retire and do what he wants to do. Um, but the other part, one of his other wise is the, the foundational relationships, his next adventure, staying involved and also helping his kids go forward. Yeah. Yeah. That

Debbie Davis: speaks so strongly to that entrepreneur, the entrepreneur who is so much about, especially those that we work with, um, so much about others, and I mean, yes, to your point, they, they balance what they need with helping others and, and contributing to their community.

Yeah, they’re, they’re pretty amazing people.

Elizabeth Ledoux: So let’s talk for a minute about successors. Okay. Because you’ve got this successor. So we’ve talked a little bit about the owner and the owner trying to get out and getting out of the way and not being able to, and how that can be this, you know, you just sometimes don’t see what you need to do.

Um, let’s talk about the leadership of a successor coming in. Mm-hmm. They potentially haven’t been in. A c e O role? They might have been, but maybe not. And what kind of shifts are they trying to make and how hard is that for them?

Debbie Davis: Gosh, we have a group we’re working with right now that come to mind and I just love them.

Um, there’s several, a couple of them for, and the biggest hurdle I see for them right now is thinking big picture. You know, they think they’re thinking big. You know, that transition from individual contributor to. Others, and then organization and then community is, is, is a shift. It’s several different shifts and it’s fun to watch them, especially when we’re navigating four of them.

You know, every one of them grows at a different pace in a different way, and. So big picture is the biggest hurdle that I see initially because they don’t even know how to go there. And, but once you open their mind to that, um, what I’ve noticed is, you know, you have to have a, an owner, a CEO who is ready for that.

Right. And ready for those conversations. So timing is important and navigating that. And it, it’s fun how it all comes together. Um, and it’s not perfect, you know, I think about, you know, um, change the change curve. You know, you go, hello, we’re implementing change, and oh my gosh, we implemented change in this climb up.

Is this the visual? Is this, but the reality is it’s messy. It’s super messy. Yeah. And, but they get there and, um, So I think thinking big picture is the first component of it, and then being brave, um, and having those conversations, realizing that, um, what they might see as a conflict conversation is can be created as an opportunity to grow, to change and be curious.

Yeah. And if they step into that space, doing that and supported, um, which the person that the group that I’m thinking of is, does that very well. It, it’s very, um, very productive and very helpful and, So I think, um, from a successor perspective, they need that support, that openness to ask those questions, and then they need to step into that place and be brave and ask those questions.


Elizabeth Ledoux: yeah, and that goes back to the whole assuming best of intent, right? Because it goes both directions. Yes. Where, where your successor is going, man, this could be a, this could be a dumb question or this could show. What I don’t know, and then I’m vulnerable and so I’m gonna hide that. I’m not gonna say I really don’t understand what you’re talking about, and that’s true with humans in general.

But, um, that transparency, vulnerability, ability to just lay it on the table and be as curious as you can and then be welcomed by the. Person who’s transitioning, um, because that’s the mentorship instead of the, um, you know, the judgment side I guess would be that. And if I, if I have the group right, just for the audience that you’re talking about, um, it’s an owner.

It’s an owner, founder who is looking at transitioning and instead of transitioning and just having one person as their successor purchaser mm-hmm. Um, there are multiple in the group that are invited into the mm-hmm. Opportunity. So those people are also, Having to develop relationships, um, differently cuz they’re going, they still have their job relationship and that interaction.

Mm-hmm. Uh, where their peers, um, in the leadership, uh, when they get to be the owners, they’re also basically investors and business partners, which is a different relationship than, you know. Being the leader of a division or a leader of a department, all of a sudden I’m an owner with you. We’re invested together financially and we’re making decisions together about the future of this company.

So very different, um, interactions there. Oh,

Debbie Davis: very much so. You know, that, that trust component and communication, we probably spend. I bet we say that a thousand times. Every time we’re together, you know, it’s an awareness of how we communicate and what is being said from one person and interpreted by another are very different.

And so we must always clarify and, and by doing that, we create that relationship, that trust that. You know, we genuinely care. Um, I mean, I see that in our team. It’s so fun to be part of that and then, and then share that with our teams that we support. So it’s, I think the communication, the trust on the successor side, the communication, the trust on the owner side.

I think the alignment piece comes into play heavily in terms of, you know, once you’ve created that, um, Those relationships, the vision is so very important and being aligned there. And then once, once all of that is in place, then we can put marching orders in place and say, okay, this is how we’re going to get there.

And um, and it’s fun to watch them.

Elizabeth Ledoux: Yeah. And then come when One thing that I think is crucial, and you know, long time ago I learned just, and I’ve kept it with me, that, um, People don’t live up to your expectations. They live up to their own commitments. And so I think, um, when you are aligned and when everybody knows what you’re trying to build and what the direction you’re going, um, then you can have commitment from everyone that you’re all on board.

And then that communication and, um, the ability to be brave, um, and vulnerable. That all kind of comes together cuz you’re brave within a space of being committed together to building whatever you’re gonna do, which in this case, you’re building the next, the next adventure for this business. Being run by other people and helping that owner to move on to their next adventure.

Um, all good. When everybody’s, when everybody knows what they’re doing. And they’re committed to making it happen and work. So yeah. Yeah,

Debbie Davis: I love that. I feel like, um, as you’re saying that, I think about the, the, the group coming together and taking the ownership. You know, that tenacity is so different within each person and managing that one, being aware of it, but then managing it because, you know, we have different, different responses and based on their history, based on their personality, based on so many things, you know, that ability to navigate.

Um, Ownership and being tenacious and being hopeful is so important. And so that’s a, that’s an honest conversation that you have with yourself, you know, as you make that choice to be committed to this. And that’s, that’s a big, big deal.

Elizabeth Ledoux: That’s a big commitment. Um, It’s a big commitment for the successor mm-hmm.

To become the owner and to actually do that. Um, they have a lot of, just even from an ownership perspective, they’ve got a lot of new things that they have to bring on board, including, um, yeah. Navigating, navigating even at home because, you know, navigating different taxes and mm-hmm. Maybe even navigating, um, new income and also navigating.

Potentially a large loan and making sure you know, the pressure of being in that position depending on what the purchase is and how it works. So just a lot of new things for that successor to have to do and learn much. Yeah.

Debbie Davis: Much. I think, um, the other thing that comes to mind is sometimes they don’t know what they don’t know.

You know, so they perceive what ownership looks like based on their experience with that, the prior owner, and that could potentially be a, a major turnoff to them versus clarifying and understanding. I think about, you know, We have a client who presented the option, the invitation to her successor, and they said, you know, we don’t want to do what you do.

Yeah. Because you work 24 7. And they shifted things up and changed things around, and they went, okay, yeah, we’re, we’re interested now. Yeah, we

Elizabeth Ledoux: like this because they can go build it the way that they want to with a great foundation of an operating company and, and also help again that community go forward.

Yeah. So, gosh, this time went so fast, Debbie. I know, and we had some great conversations and I just am so grateful, um, that to have you here and for you to take the time to share with everybody about some of your thoughts and some of your background and, um, experience with this in business transition. So, um, last question for you.

Okay. It. What would you say is one thing that you would like to leave with the audience today that just would kind of put a bow on this for them? What would be one thing?

Debbie Davis: Wow. Great question. I would say assume best of intent and clarify always. Um, as you navigate any transition. Nice.

Elizabeth Ledoux: Nice. I love that. It can be applied everywhere.

I know. Yeah. Yeah. All right, Debbie, well thank you again for being here and joining us and um, just thank so much. I enjoy you so much and I love working with you, so you’re just a pleasure and um, I will see you soon.

Debbie Davis: Thank you so much. Love this. Thank you.


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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