3 Tips For Businesses Going Through Succession Process
- Write down your succession plan.
- Set time frames.
- Know what your goal is.
Passing The Baton
In this episode of Construction Dream Team, host Sue Dyer interviews Linda Gates, who with her husband, created the landscape and architecture firm Gates + Associates. Linda has over 40 years of expertise with landscape architecture and owning her own business. This episode focuses on the topic of passing the baton of owning a company from one generation to the next.
Linda says that the creation of her business was almost unintentional. Both she and her husband are landscape architects, and around the time their business was created, Linda had just graduated and her husband was teaching. They started doing some consulting, involved some of her husband’s students once they graduated, and before they knew it they had a team of about 35 people doing over 5 million a year. They didn’t really have any intention or business plan, but they learned a lot over time to become a successful family-owned business. Now, Linda and her husband are focusing on retiring and exiting out of the business.
At first, they looked to their senior employees to see if any of them would be comfortable taking over the business, but they discovered that it takes a unique kind of person to feel confident in taking over and running a company. But around the time their older daughter graduated college, the director of their marketing department had quit. Their older daughter didn’t have much if a background in marketing, but was happy to take over the position because Linda didn’t have it in her to go through the tedious hiring process with someone completely new. Linda also has a younger daughter who decided to get a degree in landscape architecture in order to also be part of the family business. At this point, they knew that their daughters will likely be the ones to take over the company when the time is right.
Linda encouraged her daughters to join The Women’s President organization, where they would meet once a month and talk to other business owners and get advice from separate viewpoints. It also helped them get advice from people aside from their mom, and feel more confident in their abilities. The daughters realized that everything in the company was a little vague, which frustrated them. So one of the daughters introduced them to an approach called Traction, which is a book and provides facilitators to help the company take accountability and make their goals clear, also how to solve problems and even run successful meetings.
Traction and Its Benefits
The four members of the family (Linda, her husband, and two daughters) were the leaders going through the process, and it became clear that some of them were more willing to step up and do the organizational work, while others were more interested in the design aspect of landscape architecture. It helped them create more clear roles in the company, and they could bring in other people to do the things that not everyone was very inclined to do. They took the family dynamic out of it and focused more on the business. They needed a third party to help hold them accountable and put systems into place.
Who To Pass the Baton To
Linda says It was an emotional decision. It became clear that the younger daughter who trained as the landscape architect was willing to step up, while the other daughter wanted to be invited to step up. The younger daughter took over hiring and performance reviews a few years ago so the staff would view her as more of a leader and someone who is in charge. The older daughter loves to interact with people but wasn’t comfortable critiquing people.
It became clear to the younger daughter that if you want it, you need to grab it, you can’t just wait for it to fall into your lap. And the younger daughter was willing to do the work and be aggressive in her role if needed.
Challenging Aspects of the Succession Process
Through this process, everyone in the family had been hurt or saddened due to misunderstandings or assumptions, which was hard in the moment. It was hard to stay business-like when sometimes the daughters needed a mother rather than a business partner. It was hard to keep the eyes on the prize. Also, Linda’s husband was making the motions of retiring without realizing he was going to need to step down, which required a firm hand with him that their youngest daughter had to take care of in order to take over the company. It was important to make sure he wasn’t semi-retired.
Advice For Going Through Succession Process
Linda had 3 main words of advice for any company going through a succession process. First of all, write down what you want succession to look like for you, don’t be vague or just focus on what other people want out of it. Second, set time frames; if you want to be retired in 5 years and have the company in different hands by then, set a time frame for that to happen, don’t just wait for it to happen. Finally, know what your goal is and be very clear about it so there can be no misunderstanding or assumption.
Best Advice Received
Linda’s best pieces of advice are to bet on yourself and believe in yourself, and also to stop waiting on everyone else and make things happen for yourself.
Linda would also like to encourage listeners to “learn how to play”. A lot of business professionals get so caught up in their work that it becomes their play, but remember to move forward and learn how to have fun again.