Just because you’re ready to take over the family business doesn’t mean your predecessors are ready to turn it over to you. That is the message I have delivered to more than one successor; most of the time it’s because the successor isn’t trained and is not qualified. But sometimes the reason the transition doesn’t take place has nothing to do with the successor’s training. Sometimes it’s just because the successor doesn’t know how to be a successful successor. Here are 12 rules for the successor.
How Much Brass?
The general was having a staff meeting. The lieutenant on the back row spoke, “Excuse me, general. But what you are saying is not exactly the way I see it. I think you should…” The general nodded and continued.
A few minutes later the lieutenant spoke again. “Excuse me, general. The idea is good, but you’re ignoring the new technology available to us. I think you should . . .” The general was fuming underneath the surface.
A few moments later, the inevitable happened. The lieutenant spoke again. The general blew. “Lieutenant, why must you disagree with everything I say?”
“Well,” the lieutenant said confidently, “I want to get ahead, sir. And I know you didn’t get where you are today by agreeing with your superiors. Fact is, I know you have had your own ideas and spoke your mind.”
“Yes,” the general responded with his voice lowered, “I didn’t get to be a general without having my own views, expressing my own point of view, and confidently discussing issues.”
“See, that’s my point.” the lieutenant said smugly.
The general continued, “But, that’s sure as hell how I made captain, lieutenant.”
A Matter of Timing
Just because the successor is trained and capable of taking on additional responsibility, if not the business, doesn’t mean it is time.
Before you can be a good general, you have to be a good enough lieutenant to be promoted to captain. And that boils down to the predecessor’s confidence in the successor. Instead of being the impetuous lieutenant, be a good vice president.
Some would insist that my concept is closely akin to sucking up, and why would anyone want to do that? Well, does the successor have $500,000 to pay the predecessor? That’s what the business is worth. The answer is no. The answer is always no. However, if the answer is yes, then pay the predecessor the $500,000, take over the business, and don’t read any further. You don’t need to know how to suck up…er…be a successful successor.
If, however, you are trying to get the predecessor to loan you $500,000 so you can purchase the business from them over time and pay them back with the proceeds of the business, then you do need to know how to be a successful successor.
Yeah, I know that the predecessors (often parents) didn’t know much about business when they started the business. But no one gave them a business doing $1 million in sales, with 10 workers whose families’ livelihood depended upon the skills of the person running the business either.
They risked everything and perhaps that was because they didn’t have anything to lose at the time, but they took the risk and succeeded. You, as successor, have that option open to you. If you want to go do it, have at it. But don’t come whining that your parents ought to give you their business because you happened to pop up in the lucky gene pool. No, you’ll have to do it the old fashioned way—earn the opportunity to succeed by first becoming a successful successor.
The 12 Rules
In an effort to make the time the successor serves as the understudy happier and more productive, I offer the following sucking up concepts.
1. The business leader must select, train, and install their successors in their lifetime (Dr. León Danco, “Inside the Family Business”, Center for Family Business, Cleveland, OH). And I add that it is not enough to just be a member of the family. It is up to you to prepare yourself so you are the most logical person to be selected. The predecessor must train, but you must also be willing to be trained. If you are not trained, the leader must move on to select someone else or sell the business outside the family.