Starting the Conversation
This is a story about a family business called AnyOnes Company, a fourth-generation family business. AnyOnes Company is an aviation parts manufacturing business located in the Midwest with annual revenues of $50 million. In our first newsletter John, the CEO, is 66 years old and is struggling to stay focused and passionate about his business. Meanwhile, one of his children, Patrick, is wanting to know the succession plan his father has in mind. Patrick is unaware of his father’s burn out with the business. Patrick thinks that his Dad is in one of his funks again where he complains about everything.
John Hill has just left AnyOnes Company’s President, Greg White. John and Greg White had been meeting about a union contract dispute. Greg had a great solution to the union matter. As he gets back to his office, John thinks to himself, “I’m so glad we have Greg. He has been great for the company these past 10 years. Wait, has it been 10 or 15 years? Oh well, whatever, time flies.”
Greg is non-family member who was hired by AnyOnes Company for his operational experience in aviation parts manufacturing. His entire career was in manufacturing as VP of Operations for a publicly-owned Texas aviation parts manufacturer prior to joining AnyOnes Company. Greg had no experience working in a family-owned business prior to this position. Nevertheless, Greg was able to improve processes at AnyOnes to reach the next level of growth AnyOnes was enjoying. Profits were at an all-time high. John liked the insights, decision-making and problem-solving skills which Greg brought to the company.
When Greg was hired at AnyOnes Company, John’s children were not working at the company and John stated that he didn’t think any of his children had interest in working at the company. John talked about a possible CEO role and equity position down the road for Greg when John was ready to retire. That was a motivating reason for Greg to leave the Texas company. He had always wanted to be an owner/CEO of a company.
For the last 15 years, Greg was patiently waiting for John to get his succession plans in order. In the meantime, John’s son, Patrick, had joined the company and Greg got the distinct feeling that Patrick wanted to see succession flow to him and only him. Patrick, Greg thought, was too inexperienced to lead the company.
As soon as John returned to his office, he was inundated with the chaos of the day. “I can’t take this anymore” he thought, as he walked into Patrick’s office. As he sat down, Patrick saw a serious look on his Dad’s face and thought something terrible had happened.
“What’s going on, Dad?” Patrick said with concern.
“I’m tired. I think I want to retire,” John declared.
Trying to hide his obvious joy at the thought of this opportunity for himself, Patrick said, “When are you thinking of doing this?”
Collecting himself from an obvious emotional dumping on his son, John, the consummate businessman, matter-of-factly replied, “I don’t know. Just letting you know I am going to put a plan together to make it happen.”
“OK, Dad, whatever you want to do,” replied Patrick, obviously deflated and thinking the plan will never materialize.
Fifteen years ago, John thought perhaps Greg would step in the leadership role. Now Patrick works for the company. John isn’t sure what the plan should be. He’s not even sure what he means by “retirement.”
One thing Patrick must bear in mind is that leadership succession planning is often a non-linear process. Timing, business circumstances, and family dynamics may be critical determinants in what otherwise logic should dictate. John has spent his career building the company, at great sacrifice, for the benefit of himself and his family. His personal identity is the company.
Patrick goes home that night to vent to his wife about the conversation. Surprisingly supportive, Sarah offers “Well, at least your Dad recognizes he needs to do some planning.” Patrick agrees, but he is still wondering why his Dad didn’t ask him to be involved in the process. What Patrick is overlooking is that his Dad needs to find his own way on his personal succession plan before he can involve others.
This “What Next?” is a critical component of successful leadership transition planning.
In our next newsletter, find out what John learns during a chance encounter which provides some clarity to his plans for leadership succession.