Preparation for Multi-Generational Ownership

Peer Paths

Preparation for Multi-Generational Ownership

Peer Paths
Blood or Competency – An Overview
Challenging topic:
• Blood – part of who you are, your heirs/beneficiaries, keep *my* family business a family business.
o Business as Part of the Family:
 The care and preservation are more important than any one generation.

• Competency – ability to take rolls that are there and ensure they function properly.
o Specific types of knowledge, or capabilities
Also found at "The Big Question - Retirement" Station along the Transition/Conclusion
Blood or Competency – Larger Organization
Options differ for larger organizations.

• Larger Organization:
o multi store operation, larger staff of people, greater financial needs, more complex,
office off-site
o If the owner attempts to do it all, things will suffer.
-Puppeteer vs the puppet
o Larger organizations all started as smaller organizations/one store operations.

• If you are plenty busy behind the scenes (i.e. working primarily in the office, not in store), the
resources look different than a small organization.

• Where does competency & blood come in?
o Still need the same things as the smaller organizations (more than ever); desire/drive,
requires real competency, want to be there…
- Larger organizations have the ability to have resources around to take over the
areas that are not your strengths.
> Opening a spot for someone else to be good at what they’re good at,
and you can excel at your own strengths.

• Must be honest with yourself and your successors about what roles they are capable of
assuming in the family business.
Also found at "The Big Question - Retirement" Station along the Transition/Conclusion
Blood or Competency – Smaller Organization
One store operation:
o Do I have a separate office? Probably not.
o Office is likely at the store.
o Acting as more of a store manager… (But also HR, CFO, CEO, and so on)

Example: When you want to keep the store in the family and avoid selling

-"I want my son/daughter to take over the business."
>Are they teachable?
>Do they have a passion for the business?
>Can they do what you are doing?
Also found at "The Big Question - Retirement" Station along the Transition/Conclusion
Difficult Conversations
In this video we discuss the following in regard to having those difficult conversations with family about the business;
1 - More communication is better
2 - Techniques
3 - Outside Help
4 - Separation
Also found at "Albrecht Path" Station along the Peer Paths
Also found at "Preparing Business for Sale" Station along the Transition/Conclusion
Also found at "Do I Want To Buy A Business?" Station along the Start Up
Getting the Next Generation Involved
Also found at "Holt Path" Station along the Peer Paths
Also found at "Next Generation Start Up" Station along the Start Up
Timing to Transition
Timing DOES matter!
When is the right time to transition your family business, and how will you know when that time comes?
Also found at "Transferring to the Next Generation" Station along the Transition/Conclusion
Also found at "Wallace Path" Station along the Peer Paths
Also found at "Albrecht Path" Station along the Peer Paths
Also found at "Mattheisen Path" Station along the Peer Paths
Also found at "Eskew Path" Station along the Peer Paths
Also found at "Next Generation Start Up" Station along the Start Up
Personality Types and Role in Succession Part 1
Personality Types:
• Important to know the personalities of family members, and often team members as well.
• People have preferred personality types.

• Personality Tests:
o Myers Briggs
- To find out personality preferences

• 8 Preferences:

o Extrovert
o Introvert

o Sensor
o Intuitive

o Feeling
o Thinking

o Judgmental
o Perceptive
Also found at "Who Will Take Over?" Station along the Transition/Conclusion
Also found at "Greer's Path" Station along the Peer Paths
Also found at "Next Generation Start Up" Station along the Start Up
Personality Types and Role in Succession Part 2
Why is Myers Briggs important in succession?

• Personality preferences can conflict:
o These conflicts can lead to issues with decision making among owners and successors.
o Example: Parent running a business, child comes in to take over and has different
personality type and then struggles to fit in with the team of people who have a
different personality preference.

• Critical to understand who we are, who our team members are, and who our successor(s) are.
o Coping mechanisms: ex. Adapting the team
- Important to understand irritants – useful for team to understand each other.

• Where in the process do you address this?
o Hint: it’s not as you’re walking out the door!

*Example: Son and Father running business, they have different communication styles
and had to adapt their communication in order to work together effectively.
Also found at "Who Will Take Over?" Station along the Transition/Conclusion
Also found at "Greer's Path" Station along the Peer Paths
Also found at "Next Generation Start Up" Station along the Start Up
Next Generation Support Part 1 - Why
Support in guiding and developing the next generation.

What is mentoring, and are you a good mentor?
o Talking vs Teaching
- Never letting the next generations “touch the keys”
o Is the next generation prepared?
- Fear of failure to rise to the level of their successful parents.
Also found at "Greer's Path" Station along the Peer Paths
Also found at "Holt Path" Station along the Peer Paths
Also found at "I'm Retiring - Now What?" Station along the Transition/Conclusion
Also found at "Next Generation Start Up" Station along the Start Up
Next Generation Support Part 2 - How
1. Reciprocation Agreement
a. To give successors a broader perspective of the industry
- Contract with another business in the industry – communication between the
two businesses to focus on what they need exposed to.
- That individual leaves the company and goes to work at another business.
- Talk to your wholesaler if you don’t know of someone to have this agreement
with.
• Does the wholesaler have an opportunity with them?
b. Example: Coors & Gallo Families

2. Send successor to work elsewhere without an agreement.
a. Doesn’t have to be in the industry.
b. Still learn new business ideas
- Ex. Working with perishable foods as a grocer and being able to bring back that
information to your business.
c. Difficult, but can be successful with communication and understanding of expectations.

*Success dependent upon the next generation being prepared.
Also found at "Greer's Path" Station along the Peer Paths
Also found at "Holt Path" Station along the Peer Paths
Also found at "I'm Retiring - Now What?" Station along the Transition/Conclusion
Also found at "Next Generation Start Up" Station along the Start Up
Too Small, Too Young
"I'm too small. I'm too young." But are you?
In this video we discuss the importance of succession planning early on and in all stages of your business.
Also found at "Running the Business" Station along the Operational
Also found at "Starting Your Business" Station along the Start Up
Path to Involvement - Working Outside the Family Business
Let's talk about the path to your involvement in your family's business and the value of working for an outsider prior to returning to your family operation.
Also found at "Albrecht Path" Station along the Peer Paths
Also found at "Mattheisen Path" Station along the Peer Paths
Also found at "Next Generation Start Up" Station along the Start Up