By Hugh Roberts, CFP®, Partner/Director,The Rawls Group
"I'm afraid I'll either be too tough or too
easy," lamented my mentor, discussing why he hadn't
encouraged his son to join our succession planning business. Having worked with
hundreds of family business owners, he understood how easy it is to be too
focused on either business-first or family-first when
dealing with family members in your business. But regardless of how you approach
developing your child, the goal is to prepare your successor to be capable of
running the business today if need be.
Is Your Successor Ready?
The question is, "Is your successor ready?" If the answer is NO – what
needs to happen?
Let's start by addressing one of your big challenges. As a father (or mother), the business owner always wears two hats – parent and business leader. Unfortunately, all too often, although they have good intentions, business owners fall prey to being either too easy or too hard on their children. It's important to remember: you can give your child a job and provide them with a title and even a paycheck, but you can't give them respect – they have to earn it!
Recently dealing with two brothers who each have sons in their
business, it became apparent that they each believed they had to advocate on
behalf of their individual sons to protect their son's future in their
company. I said, "I fully understand as a father why you want to protect
your child and help them succeed, but your sons are men, not children – they
don't need your protection!" In fact, by trying to
protect their child, they were jeopardizing the business since they weren't
forcing their child to do the difficult things that the fathers had done to
Each successor candidate needs to earn their position,
demonstrating via their work ethic, teamwork attitude, leadership, and the respect of the management team, who will then
want them to lead the company. Otherwise, once you are gone, it's only a matter
of time before the talented managers are gone! They don't have to work for
Prepare Them for Leadership
So, how do you prepare your child for success? Of course, no one intentionally sets up their child for failure! But many dealers do so by not forcing their children to do the things necessary to prepare them for leadership. Setting them up for success starts with preparation – education is more important than ever in today's world. The disciplines involved in getting a college education are more important than any individual class they may take.
Also, learning what it means to be an employee usually requires working for someone other than you. We strongly recommend your child work a minimum of 1-2 years for another company. Require this, and it will help them develop confidence that's harder to get when working in your company. To many, this may sound like reasonable advice. Still, regularly we have to challenge business owners not to cut corners, which often happens when their child pushes back, saying, "You didn't work somewhere else," "You didn't finish college," or "I can't be away from family to go for training classes."
SUCCESSOR DEVELOPMENT CURRICULUM – What's
When a successor candidate comes on board, they need a plan
that maps out the pathway, or curriculum, to becoming a potential successor. Part of that entails orienting them to all departments of your business so they can
experience what employees have to deal with. This curriculum should include the
learning objectives they need to demonstrate proficiency in before moving from
department to department. Estimated time frames will help them understand what
it will take to become your successor.
the goal is for them to demonstrate they have the knowledge required and the
leadership ability to step into your shoes when the time comes.
Unfortunately, some dealers cut corners allowing their children
to take the elevator to the top when they need to take the stairs.
Bottomline: This curriculum is designed to help your successor discover their natural
aptitudes applicable to the business and prepare to lead others who
complement their skill sets.
Unfortunately, business is a combat sport! Your
successor must be prepared to deal with well-financed, effective competitors
who will not treat your child with kid gloves. Your successor must know how to deal with adversity and be able to lead so others will follow when times are tough and when the odds of success seem overwhelming.
When your child pushes back and doesn't want to do the hard things
required to succeed, you must stand tall as the dealer and parent! Your
decisions will impact whether your successor is ready today!
Hugh Roberts, CFP®, is a Partner/Director of The Rawls Group, a business succession planning firm. Hugh specializes in dealing with the
issues that car dealers and their families must resolve to preserve assets and
develop succession plans geared toward building business value.