This article was originally published at familybusinessmagazine.com.
In 2001, Mike Sipple, Jr. joined the family business, a boutique executive search firm, for the purpose of having a steady income to help avoid college debt. He studied landscape design and had his eyes set on using his creativity in that field. However, what started as a side job became a passion. Six years later, Mike Sipple, Sr. approached Mike Jr. about considering a future as President.
Emotional Challenges of the Succession Process
In 2012, our family business began a healthy succession process – but do not mistake “healthy” for “painless.” We did all the “right” things by planning thoroughly and bringing in outside advisors. However, the emotions of the succession process, although expected, were highly underestimated. In true transparency, succession is a mind game with opposing views from one generation to the next. Here’s what we learned about the emotional challenges that come with the process:
An outside advisor is essential for cutting through emotions. We don’t believe our transition would have been healthy without an outside advisor walking us through the process. We enlisted the help of a trusted friend and business advisor who facilitated our succession discussions. Without her guidance, we would have avoided tough topics, left meetings with misunderstandings and pushed aside succession decisions to work on more immediate business decisions, ultimately driving a wedge between us.
An outside voice is invaluable during the transition because of the emotional dynamics that will naturally come to the surface. The right advisor keeps you focused on the objective when emotions are running high.
Differing timelines can be a great source of frustration. The senior generation will likely want to be very deliberate about preparing the next generation. Having the wisdom that comes from experience, Mike Sr. wanted to take it slow and dedicate years to do all he could to prepare Mike Jr. for the job ahead.
Conversely, Mike Jr. was eager for the transition. He was ready to take the lead and start implementing fresh ideas and his vision and felt the extended time of preparation was wasted time. Looking back, Mike Jr. was thankful we took the extra steps, and had the privilege of doing so. Many of our colleagues get no preparation either by poor design, or life altering circumstances.
As successful as the current business strategies have been, the next generation will make changes. Mike Sr. had seen the business through several lows in the economy and had come out strong. He built a strong corporate culture based on trust and authenticity.
Despite the successful past, Mike Jr. had changes he wanted to make. This vision and desire to innovate is what businesses need to stay competitive, but the changes can be hard on the outgoing leader. Mike Sr. understood he had to come to grips with the fact that the future may go in a different direction, which can be difficult to accept.
Decisions impact more than the incoming and outgoing President. Decisions around succession greatly affects at least three parties: family of the current leadership, family of the next generation and the business. Mike Sr. likens this to a three-legged stool; all legs need to be in place for the stool to be stable. If a decision made is good for only two of the three parties, conversations needed to continue.
During some of these stalemates, the easy (and less emotionally draining) route was for one of the parties to concede, but that leads to unhealthy results. An outside advisor can help you stay on track until a decision can be reached that satisfies all three parties involved.
A sense of obligation is not a good reason to be the successor. We know too many people who stepped into leadership because they felt obligated to, which set them up for personal and professional failures. We learned from the mistakes of others – it’s not good or right to assume that a family member is the best choice as successor.
As a result, we joined a robust program called, The Next Generation Institute through The Goering Center for Family and Private Business, to help us critically evaluate the commitment and fit of having Mike Jr. as successor.
Other family members need to be part of the succession process. Mike Sr. realized early in the process that not including the wives in the planning was a mistake. There were hurt feelings due to this neglect. “We thought we were being kind by not getting them involved in the ups and downs of succession, when in fact they wanted to be included because their lives will be impacted by the decisions we were making.” Acknowledge other family members who may be impacted by these conversations so that relationships are not damaged.
Emotions cause you to make bad decisions. Uncomfortable conversations come up the further you dig during succession planning. Solutions to disagreements and alignment must be found through layers of dialogue. Our natural response is to avoid the immediate discomfort, and therefore move quickly, only to face larger issues later. For example, it was hard to talk about death, divorce, and incapacitation – that of our our own or of our loved-ones. However, those are topics that need to thoroughly discussed when succession is on the table. All the ugly “what-if’s” need to be dealt with so that the business and other families are taken care of if any of them become a reality.
A heaviness comes with leadership. The thrill of stepping into leadership and getting to develop new strategies is a great feeling but the surprising emotion was the heaviness that came with it. The outgoing generation is counting on the next generation to be successful. It takes a lot of work not to feel the weight of the world when you are taking over leadership.
There are many more lessons we learned through the process, but it was the emotions that were a reoccurring obstacle. They often keep people from making tough decisions and applying the appropriate level of detail. Now, we see the process as a blessing because we know many don’t have the opportunity to plan for succession as we did. Six years later, we can look back and say that our transition has been a good one and we have a better understanding of each other because of it.
Mike Sipple, Jr. is president of Centennial Talent Strategy & Executive Search and co-founder and CEO of Talent Magnet Institute; Mike Sipple, Sr. is chairman and CEO of Centennial Talent Strategy & Executive Search and co-founder of Talent Magnet Institute.