Business Owners preparing for the future embark on a journey of transformation.
A spotlight on owners. Owner/partner transitions begin by shining a light on their personal strengths, motivations and leadership style as the guiding compass of business success. As the leadership culture is re-framed for the future, we can consider the distinctions, previous strengths necessary to bring the company from start to now, and the strengths necessary to move the company into the future. There will be shifts in management approach, different communication protocols, and role revisions throughout the company, in order to carry the operation into the future.
Since 2011 a vast 10,000 baby boomers are turning 65 everyday. A recent study by the Exit Planning Institute® revealed that boomers own 63% of the private businesses in U.S. and 80-90% of them have their wealth tied up in their businesses. Owners in this study (53%) were not prepared for a business transition. We find the study results accurate among our clients. In addition to the need for critical expert advice, millions of business owners face a central planning question; what does the future of your business look like, and who will lead it? Working closely with business owners, our first conversation is a critical expression of truth; when owners hear themselves explain how they feel about the company they have built, and what’s different today.
The decision to plan and implement a business transition is complicated by something most owners don’t recognize as part of the plan, the need for a personal assessment of when and how to pursue his or her next great adventure. Owners often rely on their personal stamina to carry the business longer than necessary. Simultaneously, dedicated owners wrestle with dwindling enthusiasm for tackling day to day business needs and a personal longing to do something different with their time. This combination of feelings causes strain and tension as owners fight to remain fully engaged leaders. The workplace culture begins to suffer when owners no longer feel the burn to make things happen by their own volition but they can’t shake feeling responsible to the organization they have birthed and nurtured. This internal conflict keep owners coming into the office, but the unmet desire to spend personal energy in a different direction will make it hard to endure. Over time, a number of symptoms surface that effect business growth and continuity and an owner’s ability to lead effectively. There may be a number of conversations that occur over a five to ten year period when owners can experience a growing internal sense of urgency to take action but have a tendency to keep their personal needs hidden behind an external protective posture. Wanting a personal transition and needing to protect the company slows the pace of a timely business transition and this can blur owner vision toward what is right for the future.
Separation Anxiety is resolved by framing a path to the future. Owners have to look over the horizon, beyond a strong sense of responsibility to the organization which he or she has personally, and often single-handedly built over thirty to forty years of their life. The framing process starts with a very personal question; what will your personal future look like? Why does this matter you might ask, because our clients don’t want to simply walk away; sell the business and hand over the keys. Instead they want to wean the people and the operation away from full time dependency on their personal leadership and presence as a central force in company growth.
A Role Map clarifies the weaning process. Engaging talent and defining personal right fit is not just for a team. Specific personal engagement is planned and mapped for owners in transition. The need for transition is natural business evolution. Transition helps owners to avoid an abrupt change that disrupts an organizational foundation. Alternatively, role transitions help owners to avoid being stuck in the same set of responsibilities for too long. Human energy changes and owners find themselves questioning their desire to do only what they love, and not the things they don’t. The natural gravitation to activities they are predisposed to do well, may have been overtaken by requirements of the role as the business grows. Over time owners find it increasingly more difficult to engage personal stamina in work that is out of alignment with their true strengths. We take an honest look at owner strengths to discern a revised role that enables him or her to stay in the game, continue to employ their knowledge and wisdom, and inspire growth and innovation, in a role that enables their freedom to explore other interests that may have been delayed to prioritize the business. A revised area of concentration is communicated across the organization to ensure positive change. Four considerations put urgency for transition into action and maintains business continuity.
Define when the next phase begins, map an owner’s personal path into the future, align and communicate revised roles, and determine how each member will take their first steps into the future plan.
Feeling an increased desire to explore the right timing for a business transition? Don’t delay the conversation. An effective transition takes time and energy to ensure people and process will remain in tact.
(Exit Planning Institute 2013 ‘State of Owner Readiness’ Updated 2016 Results)