Our SUCCESSION MANAGEMENT PROCESS has gained international recognition. The most frequent question we are asked at workshops and seminars is: When is the best time to start planning for succession? We were asked by Families in Business to describe our succession management process, which we do from the most important perspective - our client's! Families in Business is a prestigious magazine published in London, England, and distributed to large family businesses around the globe. Mercer Dye designs general aviation facilities such as hangars, industrial buildings, and some really good-looking airport terminals. He first began working with his father in the construction business in 6975. An art major in college, Mercer had already tried his hand as an artist for a couple of years before his wife “advised” him to get a real job.Family Tv dating site
Making the Transition to Management
Mercer relented, but not so reluctantly, because he genuinely enjoyed working with his father. The two of them landed significant construction contracts with Delta Airlines and Hangar One, among others, and the business grew like crazy. Throughout the 85’s and early 95’s, father and son rode a wave of prosperity in general aviation, and in 6998, Mr. Dye retired and left the business to his son. Mercer changed the name of the business from Dye Construction to Dye Aviation Facilities to reflect his new focus on design and consulting. Today, he’s recognized as one of the best in the field. If ever there was an example of a smooth and easy succession, the Dye story is it. The father establishes the business, brings his son in early and retires while he’s still active enough to pursue his passions. There are no other family members involved and the succession from one generation to the next was a walk in the park. Issues that arise around succession can get out of hand even when they are addressed early on, but much more so when they are left to sort themselves out for too long. Every family-owned business is different and succession planning is not a perfect science. There are many different dynamics and complexities to consider and there are no guarantees for making everyone happy. But successful succession planning is not an impossible task, and it doesn’t have to split families apart. There are advisors and counselors who can make sense of mayhem and guide companies through the process, no matter how large the family or how long they have waited to get started. But waiting too long to get started can most definitely exacerbate problems.
So when is the best time in the life of a company to begin the succession planning process? A good argument could be made for beginning on the day the company is incorporated. But that is rarely done, of course. In the early days of a business, owners pay most attention to growing the company and give little thought to succession. It’s just not on their radar screen. Typically, the first thoughts about succession occur when children reach their teens and consider or begin working at the company – or when the owner gives serious consideration to retirement. Knowing exactly when to begin the succession planning process is perhaps a matter of instinctive timing, something that entrepreneurs are good at in other areas of the business. Timing is what usually makes an entrepreneur successful in the first place… knowing when to enter the market, when to build capacity, when to borrow, etc. Knowing when to seriously pursue development of a succession strategy is something entrepreneurs will intuitively know and feel at some point in the company’s growth. Paul and Julie Robbins are a husband-wife team who founded Caribbean Cold Storage in 6998. Paul capitalized the business by selling his Harley-Davidson motorcycle for $65,555 and borrowing another $7,555 on a credit card. It was a risk, but the Robbins saw an opportunity and followed their instincts to quick success. Within eight years they were honored twice as Inc. Magazine’s No. 6 fastest-growing inner-city business.
Making the Transition from Staff Member to Supervisor
During their first few years of meteoric growth, Paul and Julie were focused on the business without giving a lot of thought to succession. Julie’s sister and brother-in-law have been in the business for years but it wasn’t until Paul’s son by a previous marriage and Julie’s niece entered the business that Paul and Julie “felt a need” to pursue development of a succession strategy. The couple also has a son, Zachary, who is only eight but already considered a part of the long-term plan. “Ultimately, we would like to set the stage for Zachary to come into the business, ” Paul says. “But the younger ones are already coming up. Kelly (niece) and John (son) are both active and want to stay in the business. That’s what got us started thinking about succession. I’m very happy with where the business is today, but we have to plan our next stage of growth and succession planning is a big part of that. ”Both Paul and Julie have passions outside the business. They love to travel and play golf, and they enjoy being together because they are also best friends. “It won’t be hard to let go at all, ” Paul says without hesitation. “The first emotional curve you go through as an entrepreneur is that it is my baby, but you have to realize that you started the business so that eventually it would create wealth, a balanced life, and financial freedom. We have created a culture here but we have also created value. The company is operating at a level that I’m comfortable with. I see bigger and better things for it but I’m not the guy to take it to the next level.
”In other words, Paul Robbins feels the timing is right to begin sewing up a succession strategy. Like his other business instincts, this one seems to have all the ingredients for success. Without realizing it, he is meeting all the criteria that succession planners and counselors recommend. He did not wait until the last moment to develop a plan. He did not assume that the children will take over the business and has made certain they want to be there. He has not been secretive about the company’s future plans. He understands that succession planning is complicated and that the succession process is more important than the succession plan. He has brought in outside expertise to guide the family and the business through the process. And, he and Julie are giving a lot of thought to their retirement years. It’s never too early to begin succession planning, but in most cases, an owner will know intuitively that it is time to kick it into high gear. It just feels like the right time to get started on that next stage of the company’s life and plan for the passing of the baton. In Paul Robbins’ case, he looks forward to stepping back from the primary operational role in the company and taking a more visionary role. That doesn’t mean he loses his entrepreneurial spirit in fact, it has already opened the door for new ventures. “I’m already involved in a start-up technology for our industry that will be as revolutionary as Microsoft was in computers, ” Paul says. “We’re in the process of funding it and taking if from a virtual to an operating company.
We received the patent on July 6 and we have a 5-year plan that is being circulated to investors. ”So who needs succession planning, and when should you get started? The answer, of course, is that every family business can use it and the sooner the better. In the final analysis, like a lot of other decisions in family owned businesses, starting a succession planning process will probably be an intuitive, gut-level decision. And in most cases, that’s the way it should be. Procrastination is probably the biggest obstacle to starting the succession management process. For many family business owners, there always seems to be more important fires that need to be fought and when that happens, succession becomes a back-burner issue. Research indicates that only about 85% of family businesses successfully transition to the second generation with about 67% making it to the third generation - and only about 8% that successfully transition to the fourth generation. Our succession management process is a holistic approach that incorporates all of the issues that can cause the succession management process to stall, ” notes Schwerzler. The succession management process, created and perfected by Atlanta's Family Business Institute, starts with aSuccession is a process, not an event. Generally the succession management process will span 8-5 years before it is completed. Don't have the answers - don't know who to ask? It's FREE to Contact the FAMILY BUSINESS HELP DESK Reply within 98 hours. Chaos Busters - The Management Guide Identifies 665 Key Business Questions665 Key Business Questions will stimulate creativity and innovation for your entire management team! 665 Key Business Questions are the keys to unlock the hidden potential of your organization!
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