“Once you are in the racket, you’re in it for life.” Al Capone
We spent two days in Phoenix this week helping build the next generation of leaders at Haydon Building Corp. Many family businesses, started by gritty baby boomers like Gary Haydon, are starting to hand over the family racket. Frequently the next generation of family takes the reigns, sometimes faithful employees are given the opportunity to own and lead the business. In this case it is a combination of the two. Gary’s daughter, Katie Haydon Perry, and Matt Carpenter, who started as an intern 20 years ago are taking the top leadership roles.
XM Performance has been a key partner in dozens of family business transitions over the last 10 years. What does it take to successfully transition the Family Racket?
Create a plan for the transition: The legal, financial, and structural forms will require significant outside help. There is also a complicated reality of needing to develop and communicate the plan internally, without tipping the hat too soon to the competition in your market.
Leaders must be developed: There is no magic ‘easy button’ here, this takes time and investment. Are internal candidates capable of performing the ownership and CEO roles? Should you consider outside candidates? The most successful transitions we have seen involved promoting key leaders from within.
The Founder has to leave: Nothing dilutes the focus of the new leadership team more than having ‘Mom’ looking over their shoulders every step of the way. Founders, find your next project, develop your new leadership team, coach the transition, and then get out of the way.
If you are planning a transition in your family business, give yourself 3-5 years of time to execute the plan. Stay tuned, we will be adding additional insights and stories from our clients to help you with one of the most challenging stages of the business owner’s journey.