Ask the Expert: Preparing Your Successor
I am the founder of our family business and five years away from formally retiring. My daughter has been in the business for 12 years, but I feel she lacks the commitment and work ethic to run the business. Any suggestions?
The baby boomer generation is notorious for its 80-hour workweeks and “do whatever it takes” attitude. Not so the successor generation. They have seen their parents work ungodly hours and remember when Dad or Mom missed the soccer game or the recital, and vowed not to follow in those footsteps. Rather, they want to “have a life.” When this fundamental philosophical disconnect becomes apparent, these steps can be helpful.
1. Clarify your daughter’s goals in three areas.
- Family goals: What are her goals for raising a family? How much time does she want to spend with her family? How flexible can she be with her time? Will she want to take extended vacations?
- Business goals: What are her aspirations for running the business? What future does she see in the business’ growth and diversification? What are her expectations for time spent in the business and her commitment to meeting those expectations?
- Personal goals: What are her personal financial goals? What about goals on health, religion, travel, retirement, fitness and social life?
2. Agree upon performance expectations and measures; those measures will put the focus on achievement, not on hours worked. For an operations manager, typical performance measures might include:
- Achieving productivity targets such as sales revenue or output per employee;
- Managing expense budgets;
- Eliminating safety violations;
- Completing training plans for production employees;
- Achieving a defined level of employee satisfaction in the annual survey.
3. Create an individual development plan with her that defines her developmental path for the next five years. An IDP is often created using a formal competency assessment, for which there are many tools. The IDP will give both of you confidence that there is a path and a plan for her. This path will be more detailed in the first year or two and it will most likely change over time. It often includes:
• Areas of the business she will work in and have responsibility over;
- Formal courses or skills she needs to improve;
- Industry associations and service boards she should join to develop a strong network; and
- Mentors she can align with formally or informally to guide her through uncertain times.
These three steps will help clarify whether she has what it takes to assume control. In the process you may learn a lot from her about work/life balance and new ways to manage it.Business Consulting Resource