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Family businesses have common recipes for success 

Bluso, Linda L. "Family Businesses Have Common Recipes for Success." Crain's Cleveland Business. Oct. 2016

 


 

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Starting the Conversation - Planning for Transition

 

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 and second newsletter, John, the CEO, is 66 years old and is struggling to stay focused and passionate about his business.  Meanwhile, his son Patrick, who is working in the business, is wanting to know the succession plan his father has in mind. 

It was a beautiful warm, sunny day for the local chamber of commerce golf outing.  John always looked forward to this golf outing and bought his usual foursome in support of the chamber.  As in years past,  he asked the same guys to play but this year one had to back out on short-notice.  Without the time to focus on getting a fourth, John asked one of the two who could play, Adam and Bob, to find a fourth.  Bob’s long-time friend, Connor, was able to fill in on short notice.

Connor owned a very successful specialty nut and screw manufacturing business.   When nut and screw manufacturing went offshore years ago, Connor saw value in differentiating and keeping his manufacturing in the U.S.  His company found its niche in high-end specialty custom and unique products such as what is used in military defense.

Connor had no family working in his business, but he had built a strong management team.  It took some time, but Connor finally felt the management team was aligned with his thinking and had the skills to be able to run and grow the business.  They didn’t disappoint.  The mutual trust between Connor and the management team allowed Connor a sense of freedom, if you will,  to be away from the business for extended periods to travel or pursue his other many interests.   

As Connor was introduced to John, he saw a wide-smiling guy his same age but with a youthful twinkle in his eye.  John wondered who this guy was.  After the first hole was finished and they were walking back to their carts, John asked Connor what he did for a living. 

“Well, I’m sort of retired from my business," Connor responded.

“What does that mean?  Either you are pregnant, or you aren’t?  What am I missing, here, Connor?” replied John.

“I almost sold the business to a Chinese company.  Glad I didn’t.  But that is a longer story than I can get into here.  Simply, I have a strong management team that can run the business without me.  Believe me, they don’t mind me in the least filling in at golf outings on short notice.  Hey, Bob, are you sure my President didn’t call you to get me out of his hair?”  Connor and Bob laughed. 

John listened intently.

For the rest of the golf outing John found it hard to concentrate on the game as his mind drifted to imagining how Connor’s transition plan could be used in formulating his transition plan.  At the end of the outing, Connor and John exchanged business cards and John promised he’d buy Connor lunch for filling in the foursome on such short-notice.

Connor laughed and replied “That isn’t necessary.  I had the time and love to play this course so no need to buy me lunch.”

“Oh no, I insist.”  John was really fumbling for a reason to see Connor again to pick his brain on exactly how Connor pulled off his transition plan.  “Why hadn’t I thought of this idea?” John kept wondering. 

With lunch scheduled with Connor in a couple of weeks after his return from a fishing trip in Michigan, John kept wondering how to make this type of plan work in his business.  He had his son, Patrick, to consider.  He also had Greg, his loyal and competent COO, to consider.  How did Connor go about all of this?  John decided to write down a list of questions to ask Connor when they met. 

“It’s as good a place as any, to start, I guess.”  John thought as the questions began to flow on the paper.  He was really looking forward to talking to Connor again.

John’s questions are currently focused on how Connor developed and implemented his transition plan.   In our next newsletter, John and Connor meet for lunch and John has some “aha” moments. 

Leadership transition plans are a key component to effective business succession plans.  Not only does the business need a leadership transition plan, as John will come to learn, the current leader needs a personal transition plan.  This is critical to the personal well-being of the current leader and  critical for the successful transition of the business.  It minimizes the “meddling” that can occur when a current leader can’t let go of the business. 

A personal leadership transition plan should focus on what the leader’s sense of purpose and well-being is or will be in the future.  It may contain a redefinition of the role played in the business, or it might not.  It is highly personal and customized to the person’s values, interests and financial situation.

 

Nancy Valent
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