As the former President of a family owned business, I have seen our organization go through lots of different changes. Among them have been a company-wide lean transformation and implementation of enterprise-wide software systems. Looking back, these changes pale in comparison to the change challenge that we share with millions of small businesses every day — the challenge of choosing a successor and planning for the orderly transition for owners and managers. This represented our most dramatic change and yet remains the one that has given our greatest gifts; the gift of legacy for our family and the gift of longevity to the company.
Without change our business would not have been able to manage an average growth rate of 22% year over year for the last 25 years. While our core values and product and customer focus have remained constant, we have had to redefine ourselves on several occasions in order to remain competitive. We have accepted that challenge heartily.
Yet, without doubt, the issues of transition and succession seemed both overwhelming and daunting to us, as I know they do to most business owners. Because they are daunting it makes them a favorite for being frequently moved down on the list of priorities. I certainly understand this reasoning; however, having personally gone through not one, but two succession transitions, I have witnessed the tremendous benefit to the company, owners, employees, customers and vendors alike.
We have successfully transitioned the ownership and management of the company from my father, who founded the company, to my sister and me serving as a sibling team. Now, after the passing of my father, we have again redesigned our roles and are working on another transition to shift top leadership of the company from me to my sister who will now take over the day-to-day management and operation. In completing this process we have been able to eschew the idea of traditional roles and each was able to “dream” our dream roles in the company. To quote Lisë Stewart, founder of the Galliard Group,
The advantage of having a family business is that you can structure your role however you want…it’s your business.
So, with each of us redesigning our roles, we were able to think about what we most wanted to do, which lets us operate out of our strengths, and allows us to minimize the effects of our weaknesses.
The first management transition — from my dad to me — strengthened the company and allowed us to realize new growth opportunities. In doing so, we had to shift from the informal, entrepreneurial method of running a business to a more formal and process-driven model. While my dad’s informality clearly gave us a wonderful start; I did not share his entrepreneurial skills, market knowledge, and technical abilities. Instead I needed to put in place meetings, processes, planning and a team approach. Doing so helped to reinforce the things that a founder often does by instinct or feel. In fact, whether or not the founder or previous owner is still actively involved, the business will need to adjust and change to accommodate the new manager/management and owner. By fostering these changes, I was able to get the information and inputs I needed to make product development and other critical decisions. These changes allowed me to guide the business in a way that honored my dad’s skills and drew on my own skills.
Today we are looking toward the next 10 years to transition the management (and possibly ownership) of the company to a third generation family member. We are again redefining roles for owners and family members. We are also redefining the future management and management team. To our surprise, when we turned our attention to the management team we discovered that several of our managers and key employees, plus the two owners are all expecting to transition out of the company within the next 10 years. Imagine the impact on the company if that eventuality is not properly planned for. Now that the organization has made this realization and is more accustomed to accepting changes, it’s a perfect opportunity to focus on the succession plans and exit strategies of all key personnel and to make needed changes to restructure departments.
The work we have done through both of these transitions has been successful because we recognized and addressed the needs of both the business and the family. We have honored the legacy that our dad had created. We have identified what we each need and want as owners. We have looked at what the business will need to thrive. The result is a company that is stronger and more stable and more sustainable for future generations.
For me, after 23 years and multiple roles in the company, this transition has permitted me to move out of the day-to-day management and to do some of the other things that I have long wanted to do. What a gift!