Business ownership by nature is risky; succession planning however creates strategies and structure to put you in control.
Lean on the Doc!
If you are having any of the following symptoms, you are not alone:
Worry, fear and anxiety
Loss of control and understanding
Concern for what the future looks like
Apprehension to do anything
Unease about how to move forward
Emotionally, mentally exhausted and confused
These are all normal during times of crisis and transition. Fill out the “Ask the Doc” form to the right with your question, and the Doc will write you back. If you would rather talk it out, let the Doc know and he will connect you with someone on the team. Here are some of the hottest questions being asked right now:
Don’t you hate a smart ass who answers a question with a question? Nevertheless; chew on this hopeful exception. Irrespective of your growth mode, don’t you believe the continuation of your success is important? Of course you do!
When you have pulled the trigger to grow, you:
- Become more vulnerable to market swings, manufacturer issues, key manager performance, teamwork, capitalization, etc.
- Are typically dealing with increased debt, unknown territory, new employees; major distractions from your core business.
What if you:
- Encountered a death or disability in the midst of stretching your resources (time, people and money) to grow?
- Lost a key manager or your business performance took a turn south.
Never know, Murphy may be waiting in the wings. In the realm of CV-19 dialogue, the immune system of your business would be lowered during a strategic growth move.
Growth is a sign of life and, it is not optional because the opposite of growth is protracted decline. Succession planning assumes growth, internal or external; no acceptance of the status quo while the world advances. The fundamental assumption of succession planning is that you need a resilient, strong foundation to grow that will assure the continuation of your success beyond contingencies mentioned above and many more. That could mean you need a larger economy of scale that would promote immediate growth. Or, to the contrary, that could mean more efficiency, teamwork, productivity and working capital in current operations which would mean postponing external growth. Both succession and growth are strategic maneuvers which require planning to appropriately identifies, aligns and focuses your resources.
Let’s first set the foundation for this answer. I pity you if you have problems; issues that you are unwilling to address. That means there are lumps under your carpet large enough to scare your cat. That means you are tip-toeing around the room like a timid ferry trying to let the smelly sleeping dogs lie. How do you manage family and business relationship? Grow a set! Family business demands leadership, not a panty-waste patronizer who cannot stomach confrontation. Leadership is not a popularity contest. The imperative of leadership is purpose and if your highest priority is the continued success of your business at large; not the entitlement of individual family members, you are in a fight way above your weight class and your business could go comatose. A CEO is not a chief consensus officer. If you think you have problems, you are the problem! Step up or step aside for a leader.
More than likely, the problems you are referring to are really ‘issues’; persistent, complex challenges with no easy answer: a Dr Merlot Conundrum. Welcome to my world. I’ve been seeing this in family business for the last 47 years; different places, different names, same issues. Whereas I have become an objective, to the point, occasionally crass, realist; for significantly less years, you have been trying to make sense out of repetitive, nonsensical, egocentric behavior of your family. This protracted struggle has rendered you frustrated, weary and even cynical. But beyond the negatives, the good news is that you stayed in the struggle and have asked a question which means there is a good chance you are ready to listen.
First, congratulations for hanging in there beyond the advice of your spouse, advisers and friends who have heard you vent. You certainly merit a Purple Heart but whose got time for ceremonies and a metal will not resolve your issues. I congratulate you for having the huevos to call an ass an ass, not tolerate mediocrity and confront family members that believe they are entitled to special treatment. You don’t think you are making any progress but you are. Stay in the struggle. Pursue issues as evidence that you are pursuing your purpose. If you can garner the juices, increase the pressure on family terrorists. Don’t carry the weariness and frustration; pass it to them by doubling down on your commitment that no individual is more important than the business and that family is the servants not the royalty. Challenge them to participate, cooperate and contribute or get the truck out of here!!
Second, strengthen you foundation. Identify supporters of your purpose to achieve succession; to build and protect your family business. You cannot do this alone. If you are a leader, you need to identify those that are following your example and passion. Most important, listen to them and do not rely on singular often self-serving thought. You need to make sure everyone knows your purpose and those that share your mission. There are more than you think but if it is only you and the custodian, that’s enough for today, just expand that base tomorrow. Search for disciples who share your ‘discipline’ and who are willing to lock shields to protect your family business. Succession success relies on the theory of large numbers
Third, take a day off and come back to this challenge understanding that this is not a must win battle, but an infinite game which is more about endurance vs. winners or losers. Family and business are not compatible bedfellows. Family business is an oxymoron. Family is a highly subjective association based upon unconditional acceptance. Business is a group endeavor based upon conditional performance. When you combine family and business you spontaneously have excitement that can bring mothers to tears and brothers to combat. There is no perfect family business. As all family businesses evolve, including both yours and mine, issues evolve and you must be prepared to deal with Dr. Merlot’s Family Business Cycle of Excitement. When you overcome the challenge in front of you, thank God that succession continues and confidently proclaim, “Next!”.
I am far from a fortune teller, but I can share that history proves that this too shall pass. We need to be vigilant, patient, and at the same time, motivated to keep things moving forward as much as we can.
Many will say that as soon as the curve flattens out, we will be moving forward. However, we must prepare for some lingering affects which can still impact us in the long-term. It will not be business as usual for a while, but we have to do what we can to lean on our advisors to help us keep moving in the right direction.
Knowing a crisis can hit anytime and as we have seen with COVID-19, very unexpectedly, the best prescription to keep from being here again is to ensure you have a solid strategic and succession plan in place. The strategic planning process can help you define goals which may include crisis prevention/communication, where as your succession plan is all encompassing to help you protect your family, legacy and future of the business.