5 myths family business owners tell themselves about succession (and why they’re all wrong)
Family Business Succession & Custodian Mindset.
What family business owners tell themselves about succession.
Let’s bust some of these myths.
In the last couple of blog posts, I’ve discussed succession planning for family businesses and introduced the Custodian Mindset. However, I’m not naive enough to think that everyone in your family business will be on board with the concept.
Far too many times in my life, I’ve heard people say, “That’s impossible” or “It cannot be done”. Each time I hear this, I simply hear a challenge to be won and a mindset to be changed! These are beliefs that often cloud people’s judgment and reinforce their bias. They are just myths without any substance to back them up. So, let’s bust some myths.
Myth 1: “The business simply will not run without me”
Wrong. Planned and set up correctly. The business will run without you.
What I mean is that simply dumping your role, or parts of it, on your successor and walking away will make your business suffer. Implementing a succession plan, upskilling your successor, monitoring their progress, and refining and improving the business at each stage will ensure your business has every chance of success.
Myth 2: “My business is far too complex for others to understand”
No, it’s not. Planned and set up correctly. It can be simplified and taught.
A few years ago, I was fortunate to receive a present from my wife for a day of driving tanks and tracked vehicles. Being a history geek, the opportunity to drive a WWII vehicle was very exciting. When the day arrived, I was extremely nervous. In a muddy field lined with these machines, I thought, “Would I be smart and good enough to drive one?”. The first vehicle was a WWII Russian armoured personnel carrier. It turns out these are extremely easy to drive. Two leavers. The left lever controls the left track, and the right lever controls the right track. Push them down, and the vehicle moves. Pull them up, and it stops. Extremely simple. Then the thought occurred, of course, it would be simple. These vehicles were mass-produced, and the troops driving them weren’t typically highly trained. If it were a vehicle that was complex to drive and took years of training. The model simply wouldn’t work.
What has this lesson got to do with business? Number one, keep your business model as simple as possible. Number 2, the perception of a complex product or service is typically wrong. A high proportion of businesses can break down their products or services into modules for staff to learn. Most owners overthink and overcomplicate their product or service, whilst presuming wrongly that no one will ever be clever enough to understand it.
Myth 3: They will never be ready to take over.
Yes, they will. Planned and given the right support. They might even do a better job than you!
Have you given any thought to this possibility? Given the chance, guidance, mentoring, and the environment to flourish, your successor might turn out to be better than you. The good business leaders I have met realise that often their employees are better at the job than they are. Don’t underestimate your
successor.
Myth 4: We have tried their ideas before, and they didn’t work
Ideas are like new foods and vegetables. Mum always said you must try a new food at least 10 mouthfuls before saying you don’t like it!
Too many business owners are quick to turn down ideas just because they don’t like change or the new reality. They will use excuses like “We have tried that before, and it didn’t work”. In reality, they tried the idea once or twice, received some form of emotional rejection, and shied away from trying it again. Hardly a scientific trial approach!
If you try an idea, conduct a documented and planned trial. Use starting metrics to understand where you are starting from. For example, a finance team could look at debtor days. An easy report that most modern finance systems will produce as standard. If the debtor days are currently 90, we now have a starting point. We know that reducing debtor days increases cash within the business.
Therefore, how can we go about this? Once you’ve determined your strategy to reduce debtor days and, most importantly, acted on it, review the report next month to see the impact. Did they go up or down? If the results are positive and it works, refine the idea and keep doing it. If it doesn’t work, stop and go back to the drawing board. Whatever the results, we have used a basic metric-led trial, not something done on feeling and emotion.
Myth 5: It worked for them, but it won’t work for us.
Throughout my life, I have heard “It’s ok for you, Mark, because “insert common comfort zone reason”. Doing something different normally requires you to move out of your comfort zone. Otherwise, nothing changes.
Over the years, I have had to massively push myself to work outside my comfort zone. Is it scary? Yes. Does it fill me with anxiety? Yes. Is it easy? No. This myth is never truly a practical reason why succession won’t work for a business. It’s much more about the incumbent or successor moving out of their comfort zone to achieve their success.
Going through a major lifestyle change, such as retirement or reduced work, can be very daunting for any incumbent. However, I promise that stepping out of your comfort zone to plan and properly set up a succession plan can be one of the most rewarding pieces of work you can do in your career.
From the above, you will see my emphasis on “Planned and set up correctly”. A succession plan can be a hard job to get done. However, documenting a plan, setting clear goals to achieve and installing systems and processes will give you every chance of success. Rather than simply going it alone and dumping tasks you no longer want to do on your so-called ‘nominated successor’.
Mark Bailey is a Family Business Consultant helping SMEs improve communication, profitability, succession planning and growth strategy. For more family business and small business sales support find and follow Mark Bailey on Linkedin.
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