Over the past three decades I’ve worked with many business founders who want to see their entrepreneurial success extend to the next generation. Yet they share a common realization that defeats their ambition. They are not going to find anyone who can replace them.
This sounds like an egotistical delusion, but it’s true—nobody can replace the company founder. Not family members, not long-time loyal executives, not the most talented outsider, not even a clone. What is delusional is that succession requires sustaining a founder’s entrepreneurial vision.
Can you remember Newton’s First Law of Motion?
The law of inertia tells us an entity will preserve its velocity and direction as long as no force in its motion’s direction acts on it. Every a business has countless forces acting on it all the time. Entrepreneurial vision can’t reverse that law–meaning succession is not about continuity it’s about adaptation.
The next generations will create their own success in their own way with their own creativity and their own passion. Sure they can honor the founder’s vision, but don’t expect them to worship it.
This tension between founder vision and successor adaptation makes succession planning a very tough process, because it goes against the force of entrepreneurial nature. If you want your sons and daughters and protégés to succeed, get ready to change some of your ways. Here are a few recommendations….
Reallocate your entrepreneurial energy.
Although they tell can great stories about how they made it all happen, entrepreneurs are seldom good teachers for how to make it happen. They lack the patience. They feel certain their way is the right way. They can’t understand why successors don’t get it. That’s why so many of them believe sink-or-swim is the best way to train successors and why they become convinced the next generations are cursed by entitlement.
Here are my observations. One, while there is a lot to learn from failure and success, they are inconsistent teachers and add needless years of delay to the succession process. Two, the notion that the next generations’ commitment is tainted by having everything given to them is a blind cliché. The differences between generations are real but it’s not about work ethic—it’s about Gutenbergs versus Googlebergs.
The Gutenberg generations prefer linear, logical progression. Life is lived by turning pages, starting new chapters in our own book. We plan and advance based on goal-setting—pick the road, persevere against the challenges, reach the ring of success. Do it again.
The Googleberg generations are programmed to search for success, taking multiple leaps that eventually reveal where to drill down with the same passion, creativity, and commitment as their forebears are famous for. New knowledge and experiences drive them–that’s why giant tech companies refer to their offices as a campus. The more you teach them how you did it your way, the faster they will choose the highway.
Overcome your need to control.
If sink-or-swim is a waste of time, the flip side is misguided protectiveness and a complete waste of potential. Here’s the reasoning. Why expose successors to the mistakes and compromises the founder endured? Why push them into situations they aren’t ready for? Why not give them tasks they can succeed at? After all, they grew up being told everyone is special and showing up is as good as winning.
Sure, nurture their success, but nobody can test their mettle in a goof-proof environment. Sometimes it’s effective to have them work in another company to learn business realities without the expectations that come with succession. But in my experience the fastest approach is to treat successors like contract employees. Give them a series of increasingly challenging projects that teach them how to work with processes and people. Give them enough information and resources to analyze problems and develop solutions that have to be implemented within a reasonable time-frame. Get progress reports and have them justify their thinking without judging or jumping in to fix things. Offer your experience and insights only when they get stuck and then again at the final debrief session to help them value what they have learned.
Open your baggage for inspection.
Every family succession situation risks being undermined by past misunderstandings and conflicts. Non-family protégés can be equally problematic when the past is not mutually known. The mixed emotions and unspoken expectations bring doubt and frustration. If you don’t address these baggage issues, in time you discover you don’t communicate—you’re only clinching between imaginary punches.
In my opinion a successful business transition across generations doesn’t require closure on these emotional issues, but they can’t be ignored. It’s enough that both sides simply understand each other’s point of view and accept that everyone has reasons for their words and actions. We can believe they are mistaken, but we can also respect their right to make mistakes. Don’t turn succession into therapy, just treat each other as if you are both doing the best you can with the gifts and handicaps you have been given.
These three problems are easy for an outsider to spot and the recommendations are just as easy to say. Living them is hard. That’s where an outside facilitator/coach fits into the succession plan. The outsider adds composure to the process as well as posing challenges equally to both sides. The facilitator recognizes the right moment to ask the right question with the right attitude.
Let me pose one of those questions right now….
Are founder and successor job titles?
I can answer that. No, they are commemorations of past and future events. They are also symbolic of different kinds of knowledge and expertise. But founder and successor are not jobs.
Let’s take them out of the succession plan in favor of more precise and more practical roles that are critical to business longevity. I prefer these job titles—developer and ambassador.
Developers take advantage of resources already in existence and make things better. The change could be more efficient, higher quality, lower cost, more responsible—there are countless applications that could improve your business and prepare it for new environments. Instead of a clone, look for brilliant innovation from an engineer-like mindset—the perfect developer.
Meanwhile, founders don’t really want to retire—only continue the fun stuff and offload the day-to-day grind of running a business. The fun stuff for most retirement-age founders is networking and influence-sharing among peers—their best clients, professional advisors, industry resources, centers of influence. The perfect ambassador promotes the firm brand and tees up relationships in business, social, political, and philanthropic communities for developers to build on.
While the evolution from founder to ambassador involves a gradual narrowing of focus, the growth from successor to developer is a massive personal transformation. They need to gain the broadest and deepest knowledge in the shortest amount of time. The succession plan has to focus on three educational areas every developer has to master….
Know your products.
Being an entrepreneur is often like a character in a comic book—a light bulb suddenly appears in a balloon above the founder’s head and from that a company is born. It could be a truly new idea, but most of the time it is a better way to do something already in play—what-if somebody came up with a way to … [fill in the blank]. Developers have to learn that product history, appreciate the beauty of the idea, recognize the power of what it has achieved for customers and everyone involved in the enterprise over the years.
Beyond the history they need to know the current status of products from every angle and perspective—their technical specs, their economics, and their place in the market alongside all the other products that might compete or even replace them. They need to meditate constantly on how to improve products and master all the resources, processes, technologies, and people required to make them, take them to market, and service them.
Understanding how products are made and what they can do has to be matched with a deep understanding of why the company is committed to them. What is the mission to deliver value and how does fulfilling that mission establish the company’s culture and impact the community, the industry, and the economy. Only with all that background can developers earn the right and accept the responsibility to question and innovate.
Know your customers.
Companies don’t succeed because some dreamer decides to make something cool. The cool thing has to connect with people who understand just how cool it is. Developers need to know how those people think, how to get their attention, and how to help them make decisions in their best interests—not just as profiles but as people the company should communicate with. Whether products are tangible things or intangible services, the connection between the product and customers is both functional and emotional. Buying and using a product creates a relationship and commitments.
Developers have to know what that relationship means and be able to tell the company story that makes the relationship take on a life of its own. Persuasion is as important as it ever was to business success, but the era of the persuasive salesperson or the convincing ad campaign is closing quickly. Consumers can arm themselves online with any information or opinion to help them buy or reject products and services Developers have to pursue new customer connectivity and use these information sources to build on the brand reputation and customer loyalty they inherit.
Know yourself.
Developers don’t want to run companies in the shadow of the ambassador. Still, just putting their hands on the ship’s wheel can’t make them the captain. They need to understand leadership and recognize their personal style for applying it. Leadership may be at most 20% personality and at least 80% learning the power of awareness, sensitivity, insight, and resolve. Books and inspiring quotes can help, but both the 20% and the 80% reside with developers and create their character. They need to trust themselves and question themselves accordingly.
Leaders need followers, so understanding leadership means understanding followership as well. Developers have to learn and appreciate the value of every role in the company–just like the Undercover Boss tv show. They have to be approachable, but more important, they need to approach and get involved with the people who rely on them and who give them a third of their time nearly every day. Then a leader has distribute authority, autonomy, and accountability wisely and create sub-leaders who can execute with respect and integrity.
Meanwhile, the great destroyer of developer leadership is the ambassador who can’t give up the leadership role. Who thinks it saves time to respond to issues without deferring to the developer. Who believes it saves trouble to override a developer decision before something bad happens. Who fails to realize how a glance or a gesture can undermine leadership irrevocably.
There are more issues to complicate succession that will be examined in later posts. So far I’ve offered three attitudes that ambassadors have to drop and three knowledge areas that developers have to pick up.
What is common to everything I have described here about the succession process is the scarcity of time. In the best case I can see three years to make the successor-to-developer and founder-to-ambassador transitions. Typically it takes twice that time. If it drags much beyond that it isn’t working.
I appreciate that founders don’t feel ready just now. Maybe if they knew about the ambassador role they would want to start preparing for it soon. They don’t have successor candidates or they can see that the candidates aren’t ready just now. Maybe if they knew developers are more than clones they would want to start investing in one soon.
Nothing changes on its own but the calendar. Most founders stumbled into their opportunity yet made their success by planning and force of will. It’s a great story. Somehow, stumbling out of success doesn’t seem as compelling.
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