Running your company, calling the shots and making things happen has been your life and you have been very good at it. You are and should be very proud of what you have accomplished, but now it is time to step back, to step away, and determine what the next generation of your company looks like. In the following series, I outline many issues business owners face when ready to transition, how to help navigate a business in transition, and some final takeaways.
In Part One of this three-part series, I told the story of a fictional business owner and his transition journey. I outlined why so few companies succeed in transitioning successfully.
Is it hopeless, what is the solution?
It starts in your Heart and your Head:
As I thought about what happened to my friend, I thought that could have been me. I am only a few years younger and have all the same reasons for not wanting to develop a transition plan and think about life after the business. I did not want to think about what my business looks like without me. My business and I are not able to be separated. I built the business and it has never run without me. Honestly, I don’t think it can. Do I want the same thing to happen to my business as will likely happen to his? I realized that if my business cannot run without me, then its end of life will be the same as my end of life. I will not leave a legacy that lives beyond me. This is what finally made me act. I realized I need to get my head and heart around not being part of my business every day. I need to consider what it will take to position my business to run without me. I also need to spend time thinking about and planning for life after I leave my business. I need to think about what I will do, what dreams I have, and where I want to contribute. Doing this will prepare me to move into the next phase of my life where I provide value in a different way than before.
Should I Bring in a Transition Coach?
As I considered this next phase I was quickly overwhelmed and realized this is not something I have ever done. I have no expertise in developing a transition plan and, until recently, have not ever seriously thought about what this looks like. Besides, where will I find the time to develop this plan when I still need to run the business day to day? I realized I needed to find someone who can guide me and work with me to develop and execute an effective transition plan.
Develop a transition plan:
I have taken the plunge and am spending the money to bring in a transition coach to help me. It gives me relief to have someone who knows how to do this, but apprehension because I am still not sure I am ready to leave the company. I feel comfort as we are moving in a positive direction to protect the company and the employees who work here going into the future. I am relieved that this transition will take time and will proceed at my speed. This provides time for me to get used to the idea and to figure out what life looks like after I leave the business. I have already been given a lot to think about and need time to properly think this through.
What will Ownership Structure look like going into the Future?
Do I want to sell the company? Is there any family who would like to buy the company? Is there a group inside the company who would be interested in buying? Would I want to sell it to them? Am I interested in retaining the company? If I retain, what will be my role going into the future? I am very hands-on, can I take a more passive role and do this effectively? Should I create a board to run the company in order to protect it going into the future? Do I want to create an income stream for my family that will continue after I am gone? Answering these questions will shape my transition plan and what that looks like. It is something that I need to think through carefully.
Shift in Company Culture:
I have been a very hands-on leader, I know how to do almost every job in the company, and as a result, have not asked for my employees' input on very much. I have been in charge and expect my employees to do what I tell them. Many of them have been with me for many years and I feel a deep commitment to these employees. But they do not have skin in the game and are not “all in” like I am. My transition coach made me realize things are changing and I really need to change the culture in the company. Millennials expect to be more involved in the business and expect more communication. They want a manager to listen to them and value them as people and professionals. Whoever becomes the next leader will not have the experience and knowledge of the business I do and will have to rely more on the employees. My transition coach assures me I will be amazed at what my employees are capable of if we involve them in the business.
Leader Coach:
Involvement of the employees requires leadership to behave as a “leader coach”, according to my transition coach. The leader is responsible to set a strategic direction for the company including the development of a clear vision and values. A leader coach gathers input from the employees and involves them in the process of creating a vision and values that everyone supports. The same process can be used to develop the business success number. I never thought of having a business success number. Once I understood the significance and the positive impact achieving this number would have on the company, it made sense. I can see how getting the employees input on determining this number is really important if they are to support achievement of the number. If employees understand the business success number, they can also more effectively participate in determining other needed goals and what metrics we need to track. The leader coach then becomes a coach, mentor, and teacher working to make sure everyone has what they need to meet the goals. Leader coach provides support and advice in achievement of the goals and then cheers everyone on and together celebrates successes. This will be a big change for me, but I can see how this can transfer my knowledge, allow me to pour effort into people in the organization, reduce my level of stress, and increase our fun factor.
What is my Blueprint for Life after the Business?
I realized that an important part of the plan is for me to develop a blueprint for life after the business. My life has been the business and if I am going to change, I need to spend time thinking about what I am going to do after leaving the business. What do I love to do, but have not been able to do because of my commitment to the business? What am I passionate about? What skills and knowledge do I have? How can I match those skills and knowledge with the needs of my family and the community? What involvement do I want in the business? What hobbies do I have that I would like to explore? What is my next purpose in life? How do I give back in a meaningful way? Have I secured my financial future? Where do I (we) want to live? Is there another business venture I would like to explore? Maybe a partnership with someone who can run this business going into the future?
Ownership Structure of Company, Long Term Leader:
I am not clear on what I want to do relative to Ownership or Long-Term Leader, but with the transition coach on board I trust we can lay out a plan to make the decision clear at the right time. The transition coach has assured me that he will stay with me until this transition is complete although his role (and fees) will likely change during this journey. This reduces my stress level and even if something happens to me, someone who understands what I want will remain in place to make sure my desires are carried out.
Executing the Plan:
We are now 6 months into the execution of the plan and, I have to say, I have never been less stressed. The planning process was a challenge for me. Learning to listen carefully and not be ready with an answer to every concern and problem is still difficult and a work in progress. Being open with the numbers and challenges of the business has not been easy for me. I thought if my employees really understand the challenges in our business, they would jump ship. I am beginning to see that I never knew what our people could do. I created an environment where I did not encourage them to get involved and was not interested in their input. I still have a long way to go, but I see how this is going to work and am encouraged by what I see. Our transition coach has been able to teach, coach, and mentor me and advise me when I slip back into the way I used to run things. I would never be able to do this without having someone guide us along the way. I have been developing my plan for life outside the business and have spent time in introspection and thinking about what I am interested in doing. Those who know me well see the change happening to me. I have been a get it done, don’t need to think about it, kind of person; but spending time, considering what is next, and then exploring options has been good for me. I have also been spending time considering the financial impact of different decisions I make and how those affect me and my family. I can also see how the changes we have been implementing are making the company stronger and opening up a number of options for the future.
Continue on to Part Three.
