By Ed Avis
Last week IRgA hosted a three-part webinar on transitioning your reprographics business to new ownership, and the first part was about turning over the business to one of your children. This session was led by Mike Marchi, a family business expert who worked for Kohler and several other family-owned companies and now is a partner at CEO Coaching International.
“Succession is not an event, it is a multi-year strategic initiative or process,” Marchi said. “If you sort of treat it like a conversation, you’re going to have a conversation-level outcome. If you treat it as a strategic process or objective, you’re going to have a much more successful outcome.”
Here are five tips Marchi offered:
1. Be precise when setting a goal for your child to take over. Don’t say, “Eventually Janet will take over the company.” Instead say, “Janet will be named CEO by Q3 2030, with the business at $5 million revenue, a management team that trusts her, and governance that protects the family.”
2. Be honest about your child’s ability. Does he have the required character – does he have the right values and integrity and can handle adversity and criticism? Is he competent – is he an A-player in all areas of your business? And is he committed – does he actually WANT to lead the family business?
3. If you have multiple children who want the top job, set clear criteria for advancement and eventual promotion to the top job, and have an outside advisor make the final decision based on the data. Leaving the final call to an outsider ensures that the child best suited for the top job wins, not just the favorite child.
4. Create a development plan. Common plan elements include working outside the business first; joining the company and EARNING each promotion; having internal mentors; and having annual, measurable goals that are the same as any executive in the company. If performance data drives the transition process, the new leader will more likely have the required credibility.
5. Manage the hand-off carefully. Define the new leader’s decision-making role from the beginning; decide what role you (the current CEO) will have during the transition; and set a firm date for when you will depart and begin your own next chapter separate from the company.
Marchi said near the end his presentation that as the current leader is considering the succession process, he or she should ask the question: “What do I want my legacy to look like and what am I willing to do to make sure this business continues to grow?”
This just scrapes the surface of Marchi’s information-packed, hour-long presentation. To see the whole thing, click here to log into the IRgA Member Portal and then click on the Reports and Recorded Webinars tab on the left. The webinar is the top item.