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If you are the founder of your family business, I have probably already lost you. (Well, if you’re reading this now, I suppose not.) Losing control? What is this guy talking about? You always thought just the opposite - happiness is called control.
How Does It Start?
You come by your need for control honestly. Let’s go back to the beginning. I learned my definition of an entrepreneur from Dr. Leon` Danco 25 years ago. Dr. Danco has long been recognized as the founding father of the field of family business consulting. He used to say an entrepreneur was “30 years old, flat broke, and just been fired”. Most entrepreneurs I have met over the years seem to fall into some part of that definition.
You started out with an idea, a certain set of skills and knowledge, an overdose of determination, and a sometimes-overwhelming feeling of fear. There was sure as hell nobody else there to be in control. Even further, that need for control, your control wiring, is the main reason you started your business in the first place. Otherwise, you’d still be working for somebody else.
A determined controller from the beginning, what happened over the next 30 years? You damn sure didn't give up control. To the contrary, you proved over and over you were in control, and that you needed to be in control. You took a very powerful beginning. A controller by necessity. A controller by instinct and internal programming. Then, you reinforced it mightily for decades.
Being in control is who you are. It is what made you. You’ve proven it over and over. It feels right and good. It is hard to imagine, at a level deep within, anything else. Not being in control feels incredibly uncomfortable and instinctively wrong. That is true notwithstanding head level, intellectual, awareness.
They Want What????
Now, “they” are telling you to give up control. How dare they!
We all know you get it at a mental level. You know you can’t run things right up until they put you in the ground. Of course, you understand you have to turn it over to the next generation. Or, sell it. What you don’t want, is to see it start falling apart. And, I can promise you that is what will happen if you don't take action. It always does.
What is Control Anyway?
Sometimes this is explained clearly. Sometimes it isn’t. Sometimes is glossed over. Sometimes it’s misunderstood. Sometimes it is understood, at the head-level. But, that internal programming. That long history of who you are and what feels right to you. That will always win the battle. Until we start to hit pause and break it down.
Let’s begin by getting clear on what control really means, by summarizing the big two forms of it.
Legal control - Also called voting control. The owner who ultimately calls the shots. We think of this as whomever owns 51% of the company. He or she hires and fires the Board of Directors, CEO, and rest of the management team. This owner holds all the cards.
This level of control is distinct from the other “control hats” you wear. That is important. Further, it is separate from ownership. This comes into play in estate planning, for example. I could own a company worth $200 million, and have $199 million of that be nonvoting stock. I can start transferring that $199 million of equity value without giving up any legal control.
Exactly when and how legal control should be transferred is a big discussion. For now, you might not be transferring legal control at all. Most family business owners aren't ready for that. That can come a later, as the new management team proves itself, and as you gain more and more confidence and comfort.
Management control - This is what we’re really talking about. And, this is where things get all gunked up. You, speaking to the business owner who has control now, wear a lot of different hats. You are the owner. That’s legal control. You are CEO. That’s management control. You are an employee, probably the hardest working employee. A Director. And, a family member. The problem is, you, the family members, employees, and even the Board tend to get these roles all mixed up. That is where a lot of the problems come in. You must keep those roles distinct.
You need to make definite plans to transfer management control. Otherwise, how can you get behind and execute a transition plan? That is, how do you move forward if you plan to be holding the puppet strings all the way through? How can “the kid” get excited, energized, and clear about running the company?
So, they are telling you need to put the new management team in place. You are saying “Yes, I understand. I agree.” But, you can’t. What’s inside of you, left to its own designs, is way too powerful. It is standing squarely in your way.
Then there is the idea of semi-retirement. After a few years of this, Dad has his picture of showing up in the office a little less, checking in on this, that, or the other, etc. You know - “semi-retirement”. Ask the kid about semi-retirement. He calls it “Dad coming in and screwing up the business on a part-time basis.” You will no doubt have an ongoing company role or two. But, you need to be very intentional about it. And, you all have to be together on whatever that role really is.
What to Do Now?
I hope reading these words might cause you to hit pause. To slow down and take a deeper look. Perhaps this is nothing new. But, this is where good intentions go wrong. You say you get it, but you can’t do it. I see it and hear it over and over.
You have to get real about where you are, and where you want your business and family to go. Ditto about where you are going from. That involves facing and disarming the powerful internal forces that are truly in control. Hear me on this. You’re not in control. Your programming, what is inside of you, built up over many years and countless life experiences. That is in control of you. Not good or bad. Just what is.
And, you have to get excited about what you’re going to. There is so much good for you ahead. A part of that involves your continued involvement with your company. In whatever clear and positive role that will be. A part involves helping create the next level of success for your business and those you love. For your employees and all of those who helped you get where you are today.
A part of your “second half” will be built on things you like to do now or have been tossing around forever. The best part, perhaps, is yet to be discovered. Now, that’s what I call exciting!
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