Ready or Not - Succession Planning

Dear Coach,

Next to my family, my business has been my passion for 40 years. In return, it feathered the nest and put two kids through college. I retire in one year and will be comfortable, but if the company is run right, it could give my wife and me the money to do whatever we want. 

I always thought my kids would take it over but am just now realizing that that may have been an empty dream.

My daughter is at least blatant about her lack of interest. She does work in the company but is only working for me to produce an income for her family and pay her tuition in graduate school. She will soon be credentialed to do something completely different and plans to leave as quickly as she finds a job in her new field.

This infuriates me because she is a cracker jack manager and knows our business inside-out. I always hoped she’d catch my passion and so have put a lot into making her tow the line and really learn how to succeed in our industry. As graduation day nears, I find I can barely look her in the eye.

My son says he wants to take over the business but when he says it, I can see the dollar signs pop up in his eyeballs. He’s told everyone that when I’m gone, he’ll be the boss and a recent golf game with a retiree tipped me off to the fact that most of the company either resents him or are afraid of him.

He uses his blood tie with me to make them do things and has a reputation for being lazy and taking credit for others’ work. He was like that in college too – he barely passed most of his courses but he had a great time and has lots of friends to show for my money. He uses his contacts to sell for us but I always thought he’d grow up and then I could teach him the rest of the business.

I figure I have twelve months to figure out how to replace myself but every time I realize neither kid is a good choice, I get too mad to do anything productive. 

Suggestions? I’ll be retiring –

- Ready or Not

Dear Ready,

When I first read your story, I sighed mightily and promised myself to a do a column on succession planning. Then I read your letter again.

You have done your succession planning.

You are very clear that your daughter is executive material and your son, while good at sales, is not. And – you’ve invested your energy accordingly. So now the real puzzle – why is she leaving and why is your son announcing his imminent promotion when that was never your intent?

I wonder about the extent to which you have sat them both down and discussed the firm’s leadership needs over the long run and how you see their competencies within that context. If you haven’t, it is not too late.

I’d also recommend privately asking Daughter to enumerate her reasons for leaving. Be ready to hear some difficult things. To prevent getting defensive, acknowledge where you might have done things differently and do not argue about what she has experienced.

Does she have the impression that despite her steadfastness and hard work, you’ll be turning over the reins to Son? If indeed she believes staying would mean she’d do the work and he’d get the credit, it’s up to you to straighten it out.

Is she willing to work with Son and, bluntly, do you both think it feasible? If yes, options include naming him as VP of Marketing and her - President and General Manager. Fashion a transition plan that will lever you out of the top leadership seat and her into it and create some fail safes to protect her authority.

If she refuses to work with him, then you need to consider letting him go (you certainly have grounds if your retiree’s tip is accurate) and keeping her on.

Many parents worry about equity with two offspring so you may wish to consider a “share” of the company profit as recognition for his bringing in clients over the years but if he can sell, he can sell anywhere. Your goal is to leave the company in competent hands – for everyone’s sake – and it would be terrific if your work to prepare your daughter to take over was not in vain.

If I’m wrong – and Daughter is leaving because her heart belongs to her new field – you still have time to find a buyer for your firm or to hire a General Manager and prepare him or her to assume leadership (or both) on that magic day when you become the “former, now retired President” of the company. 

Good Luck and Happy Retirement!