Post on 30-Oct-2014
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“Perpetuating Family Business Legacies Through the Next Generation”
Best Practices for Achieving Succession Success™
Continuation of success through the next generation of owners and managers
Family Business Succession Planning AdvisorsThe Rawls Group
1.800.777.2957info@rawlsgroup.com
www.seekingsuccession.com
Defining Family Business
“Family Business”
Two or more people gathered together for reasons other than money. Family is a choice, and often not
an easy choice Family requires both parties to
give benefit of the doubt
FAMILY BUSINESS
A commercial enterprise that is satisfying and fulfilling the expectations & needs of those critical to commercial viability::
₋ Regulators ₋ Creditors₋ Customers₋ Employees₋ Managers₋ Family
Definition of Success
The maintenance of commercial viability while
fulfilling the personal goals and priorities of those involved in
the process.
Definition of Business Succession
The continuation of success through the next generation of
owners and managers.
Definition of Succession Planning
Preparation for the continuation of success
in light of inevitable, probable and possible
contingencies
Core ValuesFundamental to succession planning best practices
Family Business: An Oxymoron
Family: A relationship environment of based upon Unconditional Acceptance
Business: A performance environment based upon Conditional Acceptance
You can not run a business like a family and you can not run a family like a business.
The Family Business Equilibrium
BUSINESSperformance
FAMILYacceptance
The perfect balance between family and business priorities.
The perfect balance between family and business priorities, is a worthwhile goal but an impossible achievement to maintain.
BUSINESSperformance
FAMILYacceptance
There Is No Perfect Family Business
The Metric of Success for a Family Business…
How Long it Takes to Regain Family Business
Equilibrium
Covenants – The Key to Unity & Teamwork
Proactive, written agreements between critical family members or managers of unequal power that confirm reasonable expectations and provide reciprocal accountability.
More formal than an assumption or verbal acknowledgement but less formal than a contract.
COVENANTS
Best Practices for Achieving Succession Success™
Best Practices for Achieving Succession Success™
1. Respect the Succession Matrix®
2. Lead3. Grow Family4. Build your Succession Bridge®5. Develop and Communicate Your Exit Strategy6. Create a Performance Culture7. Make No Succession Assumptions8. Be the Beacon of Optimism
INVOLVES MORE THAN BASIC ESTATE PLANNING
Owner Motivation and Perspective Personal Financial Planning Business Structuring Business Performance Strategic Planning Leadership & Management Continuity Successor Preparation Management Synergy & Teamwork Family Governance Family Dynamics
1. Respect the Succession Matrix®
Succession is a challenging
journey into the unknown that
demands leadership.
2. Lead
An effective LEADER is willing to
Define the culture Defend the culture Represent the culture Portray confidence Achieve trust Make plans Express expectations Offer encouragement Recruit team members
Demonstrate teamwork Assert accountability Consider alternatives Make decisions Prepare your successor Rise above failures
FAMILY:
Is the fabric that brings resilience and strength to the business enterprise.
Is the foundation of teamwork that provides self sustaining purpose, synergy and gratification.
Generates the passions of pride and enthusiasm that enables those with less to do more.
3. Grow Family
Identify and affirm those (blood and non-blood) who are a part of your business for reasons other than money.
Accept the motivations and gifts of your family
Family is the fabric that differentiates the ordinary between the extra ordinary.
Empower your managers and demonstrate your dependence upon them
How to Grow Family
Identify a successor with reasonable pre-requisites not including blood-line
Confirm qualifications
Prepare and deploy a Successor Development Program
Be a coach not a critic
Give them room to learn from mistakes
4. Build Your Succession Bridge®
Have a life outside of the business
Acknowledge that your exit is inevitable and be proactive
Establish and respect a reasonable time-line (3-7 years)
Establish an Outside Operating Board of Directors that provides a forum for your involvement
5. Develop and Communicate An Exit Strategy
Confirm your definition of success beyond dollars and cents.
Create performance benchmarks and SMART goals that support and affirm success definition.
Do not tolerate mediocrity
Establish performance metrics
Demand accountability
6. Create a Performance Culture
“We’ve made it; we’re losing it; we’ve got it done; my kids will work it out; my key manager would never leave me; my son will grow up; we will learn to like
our daughter-n-law; my attorney and accountant will take care of that; my family will grow a brain; I can do this; etc. “
7. Make No Succession Assumptions
FAMILY, TEAMWORK , HAROMY AND ORGANIZATION ARE NOT NATURAL BEHAVIORS
We are family and we are supporting one another on our Seeking SuccessionTM journey
You are critical to our success because everyone has a vested interest in business succession.
The success of the business cannot be greater than the success of the people that make it successful
8. Be the Beacon of Optimism
SUCCESSION PLANNING BUILDS VALUE!
Knowledge is Important, Care is Critical
“Perpetuating Family Business Legacies Through the Next Generation”
Best Practices for Achieving Succession Success™Continuation of success through the next generation of owners and managers
Family Business Succession Planning AdvisorsThe Rawls Group
1.800.777.2957info@rawlsgroup.com
www.seekingsuccession.com