We are in the dog days of August, and I am currently at our cottage, just trying to unplug a bit. We are experiencing unseasonably hot weather here on the Atlantic coast, so I am thankful for the air conditioning system we had installed in our new place.
The other day we went to the beach, an easy 5-minute drive, or a leisurely 20-minute kayak paddle via the Chockpish River. It was really hot that day too, but the water was great, even if I only waded in knee-deep.
So what better time for me to unveil a recent evolution of one of my favourite analogies, which just happens to involve a beach?
I say it is an evolution, but I am not sure that is the correct word. My point is that I have often used a swimming metaphor to describe one of the differences between my father and me.
He had much more impulsive tendencies, and was often tempted to dive right “into the deep end” of the pool with new ideas, while I preferred to “get my feet wet”, and then walk progressively deeper into the water, slowly but surely, like at the beach.
I am sure that I am not the only person who uses a “phased in” process of going for a swim at the beach. In my younger days, my preferred entry was to run into the water and dive in as soon as the water was deep enough to safely take the headfirst plunge.
Ten to fifteen seconds, and I was in, soaking wet and cooled off from head to toe.
Nowadays, my entrance is much more relaxed, and there are even a few discernable stages:
– Walk in slowly, up to about my hips.
After getting used to the water temperature around my nether regions for a couple of minutes…
– Wade in a bit deeper, slowly but surely getting in up to about my armpits or shoulders.
After another body temperature adjustment phase…
– Finally taking that final step, diving in head first and finally being “all in”.
I promised you an analogy, which I haven’t forgotten, and as regular readers know, I like to tie things in to issues that business families are living through.
But please recognize that while I was working my way IN to the water, the image I want you to picture is someone working their way OUT of their business.
The 180-degree switch will admittedly change the perspective, but let’s concentrate of the three phases, because that is where the value of this comes in.
My view on the exit of a founder from his or her business also has three crucial steps:
- Handing over day-to-day Management
- Turning over the long-term Leadership
- Transferring all of the Ownership
You could imitate the teenage me, and do all three at once, getting it over with as quickly as possible, but these complete transfer “events” are most often associated with scenarios involving unexpected death, and would not be recommended by anyone.
Alternatively, if you sell to an outsider, you can also have a much quicker exit.
But transitioning a business from one generation of a family to the next should not be viewed as an event, but as a process.
Ideally it is done over a few years (minimum 5?) one step at a time, just like gradually walking into the ocean at the beach.
– Knee-deep is handing over day-to-day management.
– Shoulder depth is leadership and medium-term decision- making.
– The final plunge is share ownership from one generation to the next.
There are no hard and fast rules to all of this, of course, but open communication and thorough discussions, including regularly scheduled meetings to discuss your progress are a must.
For more about this subject, including a variety of perspectives on the challenges involved, please click here to read, download, and share:
(The most recent “whitepaper” in my Quick Start Guide Series)