This is the third part of a series on why the standard approach to business succession planning is in a real need of a disruption. Here is a short recap of the first two articles:
- Studies show that businesses are still not preparing adequately for the eventual capital transfers that will take place over the next 5-10 years in many businesses
- We reviewed some of the things I believe are getting in the way of creating a proactive transfer of the physical, social, human and spiritual capital of your business
- We indicated what parts of succession planning might be in need of disruption … everything!
- We pulled from a recent Globe and Mail article featuring a successful family business in Vancouver, Fluevog Shoes. We outlined key lessons in this successful business succession that forms part of the disruption that I am talking about;
- The owner of Fluevog Shoes realized that there are two parts of a successful business succession: the quantitative transfers (physical capital) and qualitative transfers (social, psychological matters).
- The next generation held his dad and the business in very high regard – he had a ‘stewardship mindset’ and clearly understood the immense responsibilities that come with ownership
- John and his advisory team tackled the qualitative transfers FIRST which significantly improved the outcomes from the eventual physical transfers
- John knew part of his identity was tied up in the business so he proactively worked to change this over a longer period of time – and knew he couldn’t do this alone
In this article, I want to introduce the idea that working on a succession plan for your business can and should be the most exciting, challenging and rewarding project you work on, especially if you are considering transferring to family members.
Disrupting how you think about your succession plan
I invite you to reflect on the following statements:
There is no greater privilege for an entrepreneur than to be able to lift themselves out of their business, have it continue to thrive under the stewardship of a son / daughter(s) and/or other leaders, and lean into what new adventures lie ahead.
A business succession is all about the transfer of money, power/ control and ownership. This can be an incredible gift of love and generosity.
A business transfer can be a “incredible gift”, independent of whether you physically gift the shares or require payment over time. However, it will only be looked upon as a gift if the recipient is adequately equipped to receive it.
How do you feel after reading these few statements? Please pause right now and write your thoughts down. Are your feelings the typical feelings you have when your advisors or friends ask you about your plan? My best bet right now is that they are not.
And, this is exactly what is needed in the world of succession planning … to get you excited and leaning toward building an amazing succession plan for yourself and your business … one that is as unique as your fingerprints.
I wrap up by outlining a few more tips to get you moving in the right direction and hope we can work together to disrupt the world of succession planning … one business at a time!
More Tips for Transforming Your Succession Plan
- Think about the most exciting projects you’ve worked on. What key attributes / skills did you use? How might you use these same skills to kick off your succession plan?
- Explore where you can apply your strengths, skills and abilities outside of your business
- Think about your trusted advisors. Who might you invite to help you discover the unique qualitative aspects of your business that will take time to transfer?
- How equipped are the possible successors or recipients to this significant gift?
- Regarding the possible recipients of this great gift, do you know whether they would have a “stewardship” or “entitlement” mindset? What is the difference and how can you be sure?
- See what you can learn from John at Fluevog Shoes, how he began working on an identity /purpose that is separate from his business.