Case Study: 12 Rules for Becoming a Successful Business Successor

2. There can be but one leader of a business at a time. A leader cannot retire in place. Leaders do not prepare their successors by stepping aside yet staying at the helm. This frustrates successors and infuriates predecessors. This is a rule that is often broken.

This conduct can lead to no one directing the business and no one taking responsibility. The ship is adrift and the pilot is teaching the first mate a lesson by running the ship ashore. Good job. The leader must remain leader until the next leader takes the helm. To do less is to abdicate responsibility.

Or this conduct can lead to the successor pretending to run the business. “I do everything but the checkbook. Dad still does that.” This is not preparation. This is “playing business”. Further, giving a successor checkbook responsibility and then taking it back as punishment is a sure way to kill a transition.

3. The successor cannot make decisions for the predecessor regardless of the righteousness of the position; regardless of what the successor knows that the predecessor doesn’t. The predecessor is in charge until the successor is in charge. Until then, the successor advises and assists. One person, and one person only, can run a business.

The successor must understand the concept of under command. The successor is under the command of the predecessor. The successor would be wise to begin ideas, changes, and solutions with the phrase, “With your permission...”

4. It is impossible for the successor to join the business with the understanding that they are not going to be “working” for the predecessor. It is not possible for the successor to “share” power or do part of a function. It is only possible for the successor to be assigned a real function (job) and then to do it to the very best of their ability just like everyone else within the organization.

5. The leader is responsible for the results of the business. In family-based businesses, we founders rip the assets from the family and put them into the business. Therefore, we are responsible for returning to the family more money and more time than we would otherwise. And if we are not doing that, then we need to fix it so it happens, or we need to go get a real job. The successor needs to be part of this performance-oriented concept and not be a drain on performance.

6. The leader (predecessor) assigns authority to all individuals within the business. The leader assigns to you your job. You have no more authority than what the leader assigns to you. Your first duty is to assume the responsibility of the job you have been assigned. Do your job better than anyone else has ever done. And do it with enthusiasm, loyalty, and eagerness. You do not have any more duties or authority until assigned by the leader.

7. It is from assuming responsibility for your assigned tasks that recognition and more authority are assigned. Those not stepping up to the responsibility of tasks already assigned can never be expected to receive additional authority. It is this gradual earning of authority from the predecessor that the successor gains the confidence of the predecessor to succeed them.

8. It is as important to earn the confidence and acceptance of the other workers within the organization as it is to earn the confidence of the predecessor. Assuming responsibilities for tasks not yet assigned will be met with resentment, confusion, and conflict not only from the predecessor, but from other workers as well.

9. You must know more than the predecessor must know about different things. You are probably more academically qualified than the predecessor. But, that does not mean that you know what the predecessor knows. So, knowledge of things other than what the predecessor knows is not enough to allow you to gain authority. You will gain the confidence of the predecessor and authority by learning what the predecessor knows and practicing their work ethic.

10. The predecessor sets the work ethic of the organization. It is not up to the predecessor to accommodate the work ethic of the successor; rather it is up to the successor to adopt the work ethic of the predecessor.