In a previous article, I boldly suggested that traditional family business succession planning is in need of a disruption. I provided an overview of items that might get in the way of crafting a plan for your business. Here is a quick recap for you:
- Although the technical aspects of a succession plan are widely known, the creative and innovative ways that they can be applied to your business and family is ‘as unique as your fingerprint’
- The word ‘plan’ itself can be a barrier, as it is for so many families that do not have wills or estate plans or even a basic financial plan or budget
- Time can be a barrier … who has the time to pause and reflect on what might be next for you and for your business?
- Your own strengths as an entrepreneur could be a significant barrier – strengths such as; risk-taking, being achievement-focused, thriving in ambiguity, all suggest that when you are ready to create a plan, you feel you can do so quickly enough, and do not mind operating without one at any point in time
The Disrupted Succession Plan
With this article, I want begin the journey of what a disrupted succession plan can look like. I didn’t have to look very far for some content as I came across an excellent article in the Globe that appeared this week, featuring a very successful retailer from Vancouver, Fluevog Shoes. From the article, we learn that Fluevog Shoes “embraces peculiarity”, “requires boldness” and the founder often trusted his instincts when expanding the business. In 2010, the company was included on a list of the world’s most innovative companies.
The founder, like so many others, started thinking about succession planning only when faced with a health scare that forced him to think about Fluevog without John Fluevog. “I had to let everything go”, he said in the article. It is what John did once he recovered from his health challenges that forms part of the disruption that I believe is needed today.
- John realized that succession planning is much more than money / share transfers and tax planning;
- John led the process, with the help from advisers, and remained in control;
- John understood that he would need to separate his identity from the business – and realized he cannot do this alone;
Succession planning is really about shared goals and the future business direction. This will take years, not months to do well.
John had a strong desire to ensure the company is going to carry on and continue growing without him. I would say John tackled this like any other strategic business project. It would have been “peculiar”, “innovative” and “bold”, reflecting the organization and the owner’s uniqueness. It was likely the most challenging but most rewarding project he ever ventured into and led. How cool and disruptive is this owner’s viewpoint and perspective – and how far this is from the traditional succession plan where owners feel like they are losing control and ending something?
Key Lessons from the Fluevog Shoes Story
The Fluevog Shoes Succession Plan contained many essentials of properly planned successions. The important point here is that there is no way most of these components would have taken place had John’s health continued to deteriorate, preventing him from working through all of this. The business and family would have been significantly disrupted, and it is safe to say that the longevity of Fluevog’s Shoes would have been in jeopardy. From the article, we gather the following components were proactively put in place:
- John surrounded himself with advisers on legal and psychological matters
- Significant time was given. It is not too clear, but John had his health scare in 2010 and Adrian was given the CEO role in 2017
- A role transfer to his son, Adrian, after he developed business savvy somewhere else. Adrian has taken the company from 10 stores to 25 since 2010
- A critical role for the owner that can gradually allow him/her to let go more and more, on his terms
- Created a mindset of stewardship, rather than inheritance or entitlement. In the article, Adrian is quoted as saying “I feel like we are just beginning. We’ve got something special. John has built the DNA. Let’s run with this. Let’s have some fun”. This clearly speaks about his high regard for his dad and what he built, along with how he is now called to build and protect the brand.
Shoppers peruse the Fluevog headquarters in Vancouver on March 9. The boutique retailer is among Canada’s most distinctive. It has two dozen stores throughout North America and in late March is set to open its first overseas, in Amsterdam. (Globe and Mail, March 18).
Here is a link to their website, if you are interested: https://www.fluevog.com/
Please stick with me during the next article in this series as we move toward the core of the disruption in succession planning that I feel is needed … leveraging the very strengths and attributes of an entrepreneur to create a truly innovative and unique succession plan for their business. Stay tuned!