No one’s interested in succession planning…
No one’s interested in succession planning…
This is what I was told by one of the directors of a large New Zealand accounting firm.
“Interesting,” I thought, particularly because every family business owner I know of cares and loves their family more than anything else in the world … and I mean anything.
Now, this director clearly knew her stuff. She had a PhD in succession planning after all, and from her research and in trying to sell Succession Planning to her clients she was convinced that family owned businesses were not interested in selling their businesses nor in passing it onto the next generation.
My first thought? “What are they going to do – keep running the business and hope they become the first person in history to live forever?”
But the most compelling question I had was, ‘‘Why is it that no one wants to talk about succession? Why does this intelligent, well educated person think no one is interested in it?”
Let’s start with the wording
It could be that succession is the wrong word. Succession seems to be equated with ‘retire’ and that really scares the living daylights out of business owners.
So forget ‘succession’ and forget ‘retiring’. Founders of businesses don’t want to retire. They are smart, driven people who are terrified of being bored … and even more terrified of being irrelevant.
So instead, think ‘transition’. Think about what role you want to transition into, in your business.
And then, what role do you think your kids need to transition into within the business? My advice is to give them all the crappy jobs that you don’t want to do. You had to do them – why shouldn’t they take a turn?
The other word to think of here is lifestyle. This way you can do the things you love doing in the business and yet have the time to do the other things you want to do – go sailing, go travelling, play more golf, spend time with the grandkids etc. Tim Ferris, author of the ‘4 Hour Work Week’ has a great line. ‘Go for mini retirements, take three months off to go do things and then come back to the business.’ This is great advice!
It can be done!
People do this. I can name three businesses straight off my head that have a specific office or desk set aside for the founder even though the next generation is running the business. The oldest founder I’ve met doing this is 100! He will never retire, and my goodness does he have his finger on the pulse of the business! But, he does the stuff he loves and leaves the rest to his daughter.
One of the key advantages of being in a family owned business is that you can make up the rules (as long as they’re legal – and then some still push the boundaries).
So make up the rules. Set up your business so that you can do the things you want to do in the business, get the time to do what you want outside the business, and set it up so the next generation get the experience they need.
But…
Do it now!
Do the thinking now! Have the conversations now!
One rule I say must be followed with all family business … ‘No Surprises’. Talk to the next generation. Tell them what you want. Find out what they want and have the conversations you need to have.
This is how we at Family Business Central help. This is our expertise – giving you the frameworks, the skills and the support to have the conversations and make the decisions that benefit the entire family – the thing you care about the most.
For more information call Philip Pryor on 027 411 8820 or Bob Selden on 027 565 1110
