INSIGHTS > SUCCESSION

Learning succession through unfortunate circumstances

It was the late 80’s. I was a newly minted MBA grad during a time when MBA’s were going to solve every business puzzle. With my “case study experience” in hand, and little else, I prepared to conquer the world. Looking to find my way, “the way” found me through the most unfortunate of circumstances. Our small family business, with my dad and my mom’s younger cousin at the helm, was about to undergo the direst of situations. Unexpectedly on a snowy Saturday in January, my dad’s younger partner passed away of a sudden heart attack. This event triggered a series of profound changes on two families, countless friends, and a small business that wanted to continue along.

We Definitely Weren’t Ok.

One family, our cousins, were devastated by the loss of a husband, father, brother and son. Taken too young at the age of 43, the family had to pick up huge pieces to move forward. My dad, 60 at the time, was always sure of one thing; he would be the one to leave the business first, through selling his shares to his younger partner in the next few years.

We Weren’t Prepared.

When people speak of succession, they consider multiple topics from knowledge transfer to risk management, from clear roles and responsibilities to proper plans.

As a small business, with few resources at its disposal, this wasn’t done. My dad had to borrow significantly to pay out the shares of his late partner. There wasn’t any proper transfer of knowledge, and as was typical of small businesses at the time, each didn’t have much knowledge of the others’ day to day responsibilities.

Long Before We Heard the Term VUCA, There Was VUCA. 

VUCA is the acronym to describe systems, markets, etc.. that are volatile, uncertain, complex and ambiguous. The term didn’t exist in the 80’s but the affects surely did. 

After the death of his younger partner, my dad asked me if I would consider joining the family business and helping in the short term (my elder brother had joined 3 months earlier). I did and discovered that manufacturing textile products in our corner of the world was the furthest thing from an MBA.

The Company Found Its Way.

There was a profound affect early on. As well there should have been. The company was founded almost 10 years earlier, my dad being 50, and his partner 33 at the time.

They each had a division of responsibility and were successful in building a small but profitable business. It wasn’t a fortune by any means, but instead provided a nice living for themselves, while employing about 50 people. My brother and I worked exceptionally hard, took small salaries and believed in tomorrow. We had very good people grow the business with us, found strong partnering relationships with our customers, and braved the world while the world accelerated its VUCA. We sold our business a dozen years later and the business is still operating today as part of a global textile company.

 My dad passed away last August at the age of 91. I miss his wisdom, his humor and his love of family and life. His passing allowed me to reflect upon this difficult period in our lives.

My 5 Key Learnings on Succession

1. Don’t ever underestimate the importance of managing risk. 
   Be prepared.

2.  Succession isn’t something you do when you have time. Make it a priority before it becomes an urgency. 
   Build a plan.

3. Build a business that can withstand VUCA. 
   Build a great foundation.

And most importantly,

1. Acknowledge the contributors to your success, be they employees, customers, friends, family, while you can. 
   Always treat people with respect and dignity.

2. Nothing lasts forever. Were here for a short time.
   Be appreciative of the moment.