Succession Planning In A Family Business is not easy.
According to my coach, Pam, it’s one of the toughest things I’ll ever do in my business life.
We started this process four years ago and it’s not always been plain sailing, but this post focuses on the successes.
I was fortunate enough to go on the Lead Wales training program at Bangor University ion 2014.
It was a fully funded 10-month program, which included five and a half hours of coaching.
Something that I’d never had before.
A good chat
We’ve always had good conversations as a family, but they were never structured and time was never set aside for them.
They’d consist of 5 minutes behind the counter during a quiet period or over a family meal.
We, as I’m sure many families do, blurred the lines between home life and work life.
One of the first few questions asked by Pam in our coaching sessions was, what does the future hold, what do my parents want from the business and how do they want to exit?
To which I thought “Well, God. We haven’t really had this conversation.”
Despite all the hours we talked, I had no clue what my parents wanted from the business, long-term.
I’ve never pictured a world without my parents, I’m not sure if many people do.
I do picture a future for them that doesn’t require them to work every day though.
One where they get to travel a bit more.
But that was my vision of their future, what was theirs?
It turned out they didn’t have a clue
I came straight back from my first coaching session determined that we needed to have more, structured, board meetings.
I knew we needed to start them sooner, rather than later, so went straight to Mum and Dad to pencil one in and we ended up having one right there and then.
The chat lasted about 2 hours, I think. I talked them through my session with Pam and asked them “Right, in five years’ time. What do you want to be doing?”
They didn’t know how to answer. It’s not something that they’d consider.
Which, I believe, is a fault of many owner/managed businesses. They’re so busy fighting daily fires that they don’t look more than a few months ahead.
Take a couple of weeks
I told them to take some time to think and gave them a 2-week deadline.
Which came and went.
I don’t think they had an answer by the next directors meeting, which would have been four weeks.
So it was a little bit after that, perhaps six. They were late whatever!
When they eventually came back, Mum said “Well, I don’t want to be working at all. I want to be completely retired.” and Dad said, “I’d like to just come in a couple days a week maybe and just potter. I want to have a bit more flexibility and freedom,”
Fantastic, we had a goal.
Initially, we felt we were miles away from because the business relied so heavily on them. But we knew where we were heading.
After more talking it turned out we could free Mums time up straight away.
She’s a tremendous seamstress and spearheads the technical repairs and manufacturing.
However, that type of work had been in decline and there wasn’t a huge amount of requirement.
So overnight she went from 5 days a week, to two mornings. Tuesday and Thursday.
Dad is a different story
Prior to those, conversations. Before taking the time to think about an exit strategy we all believed there was no way that the business was ready for such a change.
Asking the question “Where do you want to be in 5 years?” focused our attention and helped us find solutions.
Dad to just come in two days a week and potter was/is a bigger hurdle.
A large part of the business back then, and still today, relies massively on my Dad’s input.
More significantly though, he is not ready to stop and that’s a point worth reiterating.
My Dad is not ready to stop working yet, he loves it too much.
Five years will be next year, in 2019.
Mum continues to come in two mornings a week, but not all the time. Sometimes she’ll take the day off or just do a couple of hours. It’s completely up to her.
We have that flexibility because the work she does has reduced further.
However, we want to ramp up in-house manufacture.
Which is obviously at odds with Mum’s exit plan, so we want to switch her role over to one of a trainer and mentor.
To help bring on a new generation of machinists.
She doesn’t think she can do it, but I have complete faith in her!
Dad is still very much part of the business. It’s something that both he and I want. He is an amazing problem solver.
We’ve tried a couple of different working patterns, but none of them were ever followed through.
Except for this year.
Succession Planning In A Family Business
In January Dad started a 5-week cycle. He works on 4 different areas that he loves, a week on each, then takes the fifth off.
He spends time at home, with my Mum or they go away together.
He loves it, even though he was skeptical initially.
The only we could have got to this point was by having that conversation four years ago.
I took on extra responsibility, outsourced some workload to software and experts.
More recently we’ve recruited too.
All of which helps.
Who knows, perhaps by next year Dad will just be coming in 2 days a week.
Personally, I don’t think that would satisfy him.
But if we keep having conversations and keep looking at our personal goals, we can be certain that the business will help facilitate them.