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Family Business Leadership: Coachable is Cool!

Apart from all the advertising, KIA is not only a Korean car. KIA is also an unfortunate military acronym for "killed in action". Within the business succession realm KIA also has a mantra of morbidity as it stands for "Know-It-All; I've got this; Don't need your input". More importantly from a succession planner's perspective: KIA means uncoachable!

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Succession Planning or Building Business Value Planning?

There are many reasons why succession planning may be an unpopular topic. Some of which may be:

  • It appears to overwhelming and too emotional to address

  • A fear of giving up control, not wanting to retire, or addressing the inevitable of all humans – our mortality

  • The monetary/ time investment appears to much for the business

  • To excited and focused on growth to think about “the end”

I am not going to minimize any of the reasons above for avoiding succession planning, as they are very valid arguments however; I would like to challenge your thinking on the concept to see if I can move it up on your popularity scale. To do this, I am first going to provide a definition of succession that is much more comprehensive than misconceptions may lead you to believe.

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Key Manager Retention: Investment in Relationships Yields a Greater Return

I was with a new succession planning client the other day that is known for paying his managers very well. He is also known for being a bit cocky and aloof. He was a referral sent from another client who is very successful at recruiting and retaining managers. He inquired about the advice I had given his colleague, in order to have the same productivity. I confirmed his observation noting that his friend had several managers who were amazingly motivated and most importantly, they were totally committed. I confirmed that they were paid well but not extraordinary, but relative to the jobs they were doing. I advised him, that with respect to the development of these managers, I expressed that his friend was coachable. I told him to acknowledge those managers that produced, show affection to managers that could lead, affirm the ones that drink his Kool-Aid, and show love with more than money to those leaders who believe in him. His friend had done this and now he has a very impressive management team that is getting better every day.

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Setting Boundaries: How to Avoid Family Business Entanglements

A principle I'm reminded of on a daily basis is: “It is far easier to get entangled than it is to get untangled.” If you've ever tried to unravel a tangled up web of string you know what I'm talking about. Entanglement almost seems to be an effortless exercise whereas untangling can tax even the most patient of personalities.

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Pursuit of Perfection: The Game That Can’t Be Won

Some people are obsessed with perfection. Recently, a Board of Directors asked that we conduct a 360 Evaluation of the Chief Executive Officer of their organization. When asked if there were any specific performance concerns, the response was “Not really, we think that Mary Beth is an exceptional leader, organizes well, thinks strategically, and has the full confidence and support of the Board. We just have some concerns that we’re not doing all we can to help her develop, and a 360 will help us identify areas that are deficient.”

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Regrettable but Reality – Facing Challenging Family Business Decisions

In spite of family dynamic issues, ABC Auto, a second generation multi franchise dealership group was “successful.” Dad, our original client from 35 years ago, was quite the dynamo. He had been a very successful domestic dealer in a prosperous community. Back in the 80's he also accumulated an assortment of lucrative import franchises before they were hot. Both of his sons came into the business and worked their way through the various seats with energy, enthusiasm and varying degrees of success. Against my recommendation, however; their dad did not hold them accountable for performance, elevated them quickly to management, paid them and passed ownership to them equally. He just could not bring himself to make a decision as to who would lead and who would follow.

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As Seen in Multi-Unit Franchisee Report - Successor Prep for the New Generation

Picture a 50-something year-old multi-unit franchisee who has been in business for more than 20 years and has tirelessly worked to grow and build a diverse business. His kids are in their mid- to late-20's and have been getting more involved in day-to-day operations. They are ecstatic to be entering the family enterprise and proudly fly the family name. The company has a fantastic reputation in the community and the family name holds weight and notoriety in the industry. It is well-established with sound business practices and a formula for success that has produced generous profits and provided a great place of employment for many families. Sound familiar? 

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Successful Successors Come in All Sizes

The story of first generation family businesses is usually an inspiring saga about an individual with a vision who overcame a great deal of adversity through hard work, dedication, good timing and a certain amount of luck. Success does not come easy, especially when you start at the ground floor. The lessons learned through the sacrifices of G1 become a value system that is modeled for future generations. As future generations are introduced however, the story of G1 often becomes more like folklore – the message is heard but is not entirely relevant anymore. The successful family business is sure to have had a positive change on the family’s standard of living and your successor isn’t starting with the same perspective as G1. So in order to successfully pass the baton to the next generation, it is important to identify who you’re working with and what will motivate them.

The difference between successful G1 and G2 business owners can be compared to an ongoing rivalry between two current NFL quarterbacks – a first generation Tom Brady and a second generation Peyton Manning. Their routes to the NFL couldn’t have been more different; Brady an unknown back-up in college and 6th Round Draft Pick vs. Manning who is essentially quarterback royalty and a First Round Draft Pick. Despite the differences, they are both tremendously successful at what they do and are both known for a relentless work ethic to be the best.

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Successor Development - What About the Youngest?

Birth order can be a significant factor in many situations. Should it be relevant in the succession of your family business?

If you’re like most parents, you probably strive to treat your children equally, paying special attention so as not to create jealousy or the illusion of favoritism. Additionally, you want to equip each of them with all of the tools they will need to be successful in life. Unfortunately, reality has a funny way of making “equal” unattainable.

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How to Check Perfectionism at the Door - Keys to Becoming An Effective Leader

Mary Poppins described herself as “perfectly perfect in every way”. Some of us nourish that same self image as we sing or think to ourselves, "What’s the matter with people today? Why can’t they be like me, perfect in every way?”

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Why Do I Procrastinate and How Can I Stop?

A friend of mine believes very strongly that no one should do today what they can put off until tomorrow. He is the ultimate procrastinator; and he's quite happy with where that's taken him in life. He simply does not buy in to the notion that any non-emergency has to be dealt with today. His rationale is all based on a Rolling Stones' hit titled "Time Is on My Side."

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Win the Right to Be Heard: Successor Prep for the New Generation

Picture this, 60+ year-old dealer who has been in business 20+ years. Possibly inherited the dealerships from his/her own family and have tirelessly worked to grow and build the business. The kids are in their late 20’s and have been getting more involved in the dealerships. They are ecstatic to be entering the family enterprise and proudly fly the family name. The company has a fantastic reputation in the community and the family name holds weight and notoriety in the industry. It is well-established with sound business practices and a formula for success that has produced generous profits and provided a great place of employment for many families. Sound familiar?  

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Family Feuds and Business Turf Wars: How Do They Start? How Do They End?

A lot of people lose sleep over a great divide where two or more people have chosen sides. It happens where ever there are people. It could be among friends, enemies, a family or families, clients, or business partners. Usually it is a disagreement over relatively scarce resources: People; Time; and/or Money.

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When is the Right time to Discuss Succession Plans with Family Members?

In 1988, Jack was thrust into the leadership position of the family business his father started in the late 1950’s. At the time Jack took over the family business there was only one dealership and approximately sixty-five employees. Over the years the business had become highly productive and profitable in large part due to his father’s incredible work ethic, customer focus, business savvy and knack for attracting quality employees. Jack’s father was a humble man who attributed much of his success to luck, good fortune and being in the right place at the right time. “Timing is everything” was a phrase Jack’s father used frequently. From a business perspective, there very much could have been some truth to timing and being in the right place at the right time but for Jack, timing could not have been worse!

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Preparing Family Members to Take Over - As Seen On Automotive Buy Sell Report

Succession planning is a hot topic in the automotive industry and has been one frequently discussed in the pages of Automotive Buy Sell Report. Recent articles by Don Ray and Robert Bass have specifically focused on successor identification and development, and how, in the absence of a qualified successor or the lack of management bench strength, owners are forced to sell their business. 

Click Here to: Read full article on Automotive Buy Sell Report website

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Family Business Issues - I Did Not Like You at 22

I recently met with the son of a client that I had not spoken to in a couple of years. It was somewhat of a surprise as I frankly did not think I would ever meet with him again as a prospective successor. We had initially been introduced when he was 21, a fresh college graduate and a new employee at my client's business. Neither he nor my client had taken my advice that he work elsewhere prior to joining the family business. Sonny was newly married and Dad did not want him to struggle as a common law employee; working long hours, being criticized for his size and not being able to travel with the family on vacations.

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Are You Really Listening to Your Successor

"Good morning, Jacob. Thank you for the fine dinner last evening. It was nice to spend time with you and Sandy. It is very apparent that you married above yourself."

"Oh yes, Loyd. You continue to have an outstanding ability to pick up on the obvious," he responded with a chuckle. Dr. Merlot, my succession planning alter-ego, joined us as we enjoyed a cup of coffee before continuing the prior day’s discussion about Successor Development Curriculums for Jake Jr. and Sally, Jacob’s son and daughter who were both working in the dealerships.

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Successor Filters

For many dealers, coming to terms with the assets and liabilities impacting the continued success of their business can be a difficult wakeup call. The ability to build a resilient, sustainable business over multiple generations is a multi-faceted endeavor impacted by different factors. One common concern heard from dealers however; is “Who has what it takes to fill my shoes?”. Here is an example of just that type of situation.

"Loyd, is there anything else you want to discuss? This succession assessment has really put me under a microscope. I haven't been bruised up like this since I slipped on the ice a few years back!"

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Keys to Preparing Your Successor

Just as there are many roads that lead to Rome, there are many paths that can be taken when it comes to preparing your successor. Many Dealers believe operational experience in the front and back ends of the business and participating in learning opportunities such as Dealer Academy are all that is necessary to become a successful auto dealer. Operational rotations and successfully completing industry education are extremely valuable steps in the successor preparation process. However, this approach often results in a false sense of security for both the Dealer and the aspiring successor as other critical developmental opportunities are omitted. So, what else can you do to ensure your successor is adequately prepared to lead your business in the future? Here are some tips to help ensure your successor is equipped to take the leadership baton and successfully run with it.

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As Seen in Automotive News - Family feud disrupts DARCARS


Article Written by Jamie LaReau for Automotive News, Jeff Faulkner Cited as an Expert Source


The cornerstone to the success of a family-owned auto retailer is the family members themselves.

So when a family dispute flares, the impact on operations can be devastating. It becomes a concern for many manufacturers and could result in termination of the franchise agreement, experts say.

DARCARS Automotive Group is embroiled in such a family dispute.

Tamara Darvish, 51, a well-known face of the company and leader in the auto industry, filed a lawsuit against her father, John Darvish Sr., 78, and the company he founded. She charged that he reneged on his promise to make her part of the dealership group's ownership team. Her stepbrothers run the company.

The suit, filed Jan. 9 in a Maryland court, will have a ripple effect on DARCARS' 22 dealerships, experts say. And such conflicts usually worry manufacturers..

"Family members are the leadership of the organization and when they are sideways with one another, there is no sense of purpose for the company," said Jeff Faulkner, an Atlanta partner at succession planning firm Rawls Group. "The business is not just about them. It's about their employees, vendors and others who depend on that business."

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