Will Your Fears Condemn your Business?
Will your business be one that dies because you fail to create or follow through with a succession plan?
Occasionally, we publish real-world case studies to help owners understand and overcome attitudinal and emotional obstacles to completing a succession plan. Though we’ve changed the names in this dialogue, it spotlights a challenge that many owners confront...their own emotions.
The successors are intended to be a son of the owner, Bert, and a long-time key employee, Carol. They’ve worked well together for over 12 years, but the owner continues to hesitate, going on 5 years now....
Owner: “Carol and I had a conversation yesterday concerning her readiness to go forward with the “framework” that you have suggested. I am not sold that she is ready or in agreement that she can give up ANY control to Bert. My perception of this is that she is willing to move forward with Bert as a partner ONLY if he has no say in any matter and is treated as an employee. Am I wrong in my thinking?”
PB: “We believe that she fully understands the framework of equal owners who decide the vision of the company and make the strategic decisions. We may never know how she "precisely feels." We were quite clear in conversation with Carol about the difference between "operational control" and "company control." We feel she supports that 100%.”
Owner: “I also perceive that she and Bert have an unresolved issue that needs to be addressed before this can work. I also believe this is more of a Carol problem than a Bert problem. She has not clearly leveled with him about her issues with him. I have encouraged her a number of times to go to lunch with him or do something to get the conversation started so they can resolve the issue. “
PB: “If Carol has a problem with Bert, they must deal with it themselves. You can’t “fix” someone else’s relationship.”
Owner: “We need to talk soon. My wife says I should just let you handle it! “
PB: “In principal, your wife is right. Like several owners we've assisted, you are holding on "too tight." Second only to marriage and children, business ownership is the most financially and emotionally significant decision we'll ever make. Realize that you may never attain the Goldilocks comfort you'd like.”
Owner: “It would be hard for me to hand over this business to Carol with Bert as a partner and he have zero control. Again, Carol has not indicated to me that she is okay with Bert having any level of control. I’m sorry for the delays, but it is going to have to feel right before I can proceed.”
PB: “If this is the hurdle, “feeling right,” you will never have a succession plan. Your heirs or a judge will decide your company’s future someday. This is not a sarcastic comment. We have witnessed this fate of others.
Now, the good news about getting this done:
a. Let go of controlling the process. Instead, be a nurturing, guiding "father" to both of them.
b. Allow us to facilitate the dialogue of the parties, providing solid structure and experienced advice. That’s our job.
c. You will be informed and engaged throughout.
d. We will only advance as the parties are comfortable advancing.
e. At any point in the process, should Carol depart, our efforts and progress are still valid for Bert and anyone else who may be included. Our work will not be wasted.
Regardless of whether Carol stays or departs, the succession process must continue. It would be tragic to not secure your legacy and the future of your family and employees. Remain focused on the end goal. The puzzle pieces may be rearranged along the way, but the elegant picture will be the result.”
We hope our publications inspire you to ensure the continuity of your company...for your benefit, your family’s, and the many others who depend on you.