Succession and Transition Planning
You are probably like every other entrepreneurial business founder and owner, hoping to create a successful future, both for yourself and your loved ones, as well as for the next generation of leaders of your company (who in some cases might be your own children). Unfortunately, many entrepreneurial businesses—and most family-owned and run entrepreneurial businesses—fail to successfully navigate the succession and transition process.
Only one in four such businesses makes a successful transition to the second generation, the others failing or being sold before the children of the founders get a chance to take over. Of those that do last to the second generation, only one in three makes a successful transition to the third generation. These are not encouraging statistics.
Designed Outcomes would like to help you improve your personal odds by giving you a head start on building a viable succession and transition plan. Our goal is to help you approach the track record of the world’s longest-surviving family-owned business, The Houshi Onsen, a traditional inn in Japan that is currently run by its forty-sixth generation of family members.
But be cautioned: even when a business owner works diligently to create business succession and transition plans; things don’t necessarily go forward smoothly. While the plans may appear sound, there are often many invisible obstacles and interpersonal land mines that blow up and destroy people’s dreams and relationships. As William Bridges has pointed out in Managing Transitions: Making the Most of Change,
It isn’t the changes that do you in, it’s the transitions. They aren’t the same thing. Change is situational: the move to a new site, the retirement of the founder, the reorganization of the roles on the team, the revisions to the pension plan. Transition, on the other hand, is psychological; it is a three-phase process that people go through as they internalize and come to terms with the details of the new situation that the change brings about.
Managing your way through these transitions is the key to successful succession planning. Founders and owners need detailed plans with carefully plotted paths to help the different generations of owners and leaders uncover these land mines and successfully navigate through them toward a promising future. Designed Outcomes, with its focus on helping the small business owner develop extremely clear goals for their desired succession and transition planning outcome, is uniquely positioned to help create the personal tactics that will deliver that outcome, by design.
Learn more about our unique approach to Succession and Transition Planning. Check out the new book by David Franzetta and Moss A. Jackson, PhD, Changing Places: Making a Success of Succession Planning for Entrepreneurs and Family Business Owners.