Transitioning Ownership of Your Business
I’ve worked with several people who were involved in a transition of leadership for their companies or organizations. It’s a very interesting journey, with many layers and nuances.
If the current owner started the company, then he’s going to have a great deal of personal ownership tied up in it. Even if he’s getting burned out and wants to leave, he’s still going to be attached to the history. He’ll remember sitting around the kitchen table drawing diagrams, the day the business opened, and the first customer. All of these are emotionally charged events, and it’s hard to give them up.
It’s kind of like a divorce, or a close friend dying. It’s impossible not to get drawn into emotional responses.
The new owner, on the other hand, has her own history – both inside and outside this company. She’s going to have a fresh viewpoint, even if she’s a strong supporter of the previous owner. It’s natural for her to have difficulty balancing these new ideas and the old way of doing things. If she moves too quickly, that’s taking on significant risk. But staying with the old means that progress can slow to a crawl.
Notice that I haven’t even talked about the technical knowledge needed to transition ownership. That’s the easiest part, because often the technical skills are fairly visible. When the new and old owners have a chance to plan the shift a year or more in advance, it’s not hard to build a comprehensive list of everything that needs to be done, to analyze how decisions were made, and the relationships that will be tested when the switchover occurs.
Let’s not forget the adjustment that employees make when leadership changes. Usually their jobs don’t change much, at least not initially. But the relationship with your manager, especially if that’s the company owner, is an important part of whether you’re happy on the job or not. So all these relationships will essentially be re-negotiated from scratch. That takes time.
The best advice I give people is to:
- Plan the transition well in advance – preferably, more than a year
- Create a rigorous plan for transition of technical knowledge
- Develop a comprehensive list of all the relationships which will be touched: partners, employees, managers, suppliers, and customers
- Be patient with the internal emotional journeys each person needs to go through
- Learn as you go – it’s never perfect!
Are you thinking about how you might change leadership in your company? Start working through these points, even if you’re not sure when it’s going to happen.
Carl Dierschow
Small Fish Business Coaching Fort Collins
www.smallfish.us
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