Coaching Your Successor and Keeping the Family Business Alive and Thriving
What worked for you probably won’t work for them. But, with insightful, experienced coaching, your investment in them will prepare them for success.
When the time comes to hand off your business to the next generation, the pressure is on to get it right. After all, studies show that two-thirds of family businesses don’t survive the transition to the second generation. So, to avoid adding to those ugly numbers, you need to ask some questions:
Will my children make smart decisions, even better decisions than I made?
Will my children work well together and stay in the business if I’m not there?
What advisors or outside management people will they need to guide them?
How will I exit my business to meet my needs while being careful to set them up for success?
Your window to retire might be fast approaching, so you'll want to do everything in your power to ensure the business can sustain the next generation of family members.
Here is how you can work through these issues.
Maybe you started the business from scratch, hiring employees and expanding as fast as you could to get to cash positive and build a profitable business that supported your family. Or possibly, your parents built it and handed it over to you. From there, you were able to turn the company into something even more significant while dreaming of turning it over to your children.
But what does the future hold?
One thing you have to realize is that what got you to here (hard work, entrepreneurial drive) won't necessarily get your successors where they want to go (smart work, predictable incomes, growth).
If your business now has to support multiple members of the next generation and their families, it'll need to grow; you might have to be part of that growth before you step away. Or some insight from outside the family might be needed.
You'll have to come up with a vision and a plan to ensure that this business is built to survive what a large generation of family members can put it through.
Why you coaching your successor can’t work
Before your children are ready to take over the family business, they will need coaching from an advisor who will ask tough questions, provide insight and experience, and challenge the next generation of leaders on the team to get past any complicated personality dynamics between them and to teach them what you could not teach them.
A few years back, I was coaching a family business, an e-commerce company run by four family members (a mother, two daughters, and a son). In their words, here’s why they needed an outsider to help them.
“We are a family-owned business that has been in operation for only three years, and our revenue continues to grow 10x year over year. But even with the success, our executive team was only growing more and more splintered by unspoken feuds and hidden grudges. Healthy conflict was a foreign concept to us, so many gaping issues in the business didn’t get solved. That’s when we contacted Jonathan. With his help in facilitating our executive team meetings, we were able to iron out many of the wrinkles that were keeping us from communicating throughout all departments thanks to implementation of the Rockefeller Habits and Scaling Up principles.” — Grace Eleyae, CEO – Grace Eleyae Inc.
Often, family businesses will find that the successors are more likely to embrace a coach from outside the family. Family dynamics can be a whirlwind of dissenting opinions and long-simmering issues, so having a fresh voice that can cut through it all can be critical to a successful transition.
Professional coaching services
Just because you have built your business from the ground up doesn't mean you have the knowledge and experience to prepare the next generation to take the reins. This problem is common in all forms of business because, while successful people can drive themselves to success, they often don’t know how to get others to that point. (Read the Harvard Business Review article “Most Managers Don’t know How to Coach People. But They Can Learn.”)
As a business owner, you might not have an aptitude for coaching, but there are professional services – such as mine – that can assist you in preparing the next generation of family members.
According to the book “Trillion Dollar Coach: The Leadership Playbook of Silicon Valley's Bill Campbell,” a good coach points out our blind spots. This awareness allows us to work through our issues, which is crucial because it's your blind spots that can sink you.
You already know what you're good at, but where are you struggling? It can be challenging to point out the areas where you're weaker because human nature pushes us to ignore our faults.
A professional coach knows how dangerous your weak areas can be to the survival of the business and will point them out and help eliminate them.
Are you coachable?
Would you consider yourself to be open to coaching? Family business members often come to recognize the need for some fresh outside input. Many such business owners have hired me to provide just that, and I have coached thousands of them to scale up their businesses.
By working with a coach, you can take a more hands-on approach to grooming your successor, working together to create a business that is sustainable for the next generation.
Going through coaching with your successor provides a solid base from which the company can grow. The process will also make you confident that everyone is on the same page moving forward.
Preparing for business transition
As you get ready to transition your business, you should know that you are needed one more time. In this case, your job is to prepare your successor or successors to take over the company. Coaching is a vital tool in this situation because it sets the company on a path to continued success when so many others fail.
The Goldhill Group offers business coaching services to companies of all sizes. Whether you're looking for team coaching, leadership or executive briefings, or workshops that introduce new concepts to your employees, you're covered here. I will put your successor in a position where he or she can scale your company to new heights in the future. Contact us to book a free strategy session.