Whether You are Entering or Exiting a Business as General Manager, Timing is Everything.
“You got to know when to hold’em, know when to fold’em, know when to walk away, know when to run.” Probably many of you have identified these words as part of a song written by Kenny Rogers called the Gambler. I think these words have much meaning for both sides of those involved in the succession question. Then there is the quote that Danny Williams made during his retirement announcement from Newfoundland politics. He quoted Orson Welles who said, “If you want a happy ending you need to know when to end your story.” So how does this fit into the succession discussion for farm family businesses? Let’s look at some very good exit strategies and some less than successful ones.
First of all, Danny Williams left as Premier of the Province of Newfoundland with a 90% approval rating. He left at the top of his game. So did Peter Loughheed when he retired as Premier of the Province of Alberta. Oprah is discontinuing her show at the end of this season when ratings couldn’t be higher. These people all have an exquisite sense of timing and an extreme awareness of the environment that they function in. Now let’s look at some not so successful debarkations. His own party removed Ralph Klein, one of the most popular Premiers in the history of the Province of Alberta on a non-confidence vote. Ralph just stayed too long and the bloom went off of his political rose. In professional sports there are two glaring examples of not knowing when to quit. The first is Babe Ruth, who stayed way past his best before date and was finally traded by the New York Yankees to the Boston Braves to end his career in a rather dismal manner. The most visible example today in NFL Football is Brett Favre who retired at the pinnacle of his career only to come out of retirement to put on a very mediocre performance both on and off the field. To those people who value their legacy and their place in the history books, I ask the question, “What will people remember about Brett Favre’s career, the stellar performance he put in before his first retirement or the painful demonstration of mediocrity that we are all being subjected to right now. I submit it will be the latter, and not the former. This might be food for thought for some of the senior generation contemplating what form their succession scenario should take and how it will affect their legacy and the remembrance of their time at the helm.
How do we apply these lessons of history to family business succession? To the older generation, your sense of timing has to be acute. You have to pick and choose when the time is right for both the business and the family to open the next chapter and more specifically to identify what the goals and objectives are that you are attempting to achieve by selecting your particular timeline for transition. An honest appraisal of why you have selected a particular timeline will tell you much about what your motivations are and what end you actually seek. Remember that the succession time line can be a win win situation. One door closes and another door opens with brand new challenges and opportunities to be experienced. You’re not getting older, you’re getting better and it may be possible to put that skill set that you have been building for years to brand new use. Maybe a change is as good as a rest. But it is all about timing: go too early and you will leave a management void that could be dangerous to the continuation of the business, and leave too late and you may have just dealt the final blows to your business, a business that has been drained of its vision and purpose, a business mired in frustration and emotional angst.
To the younger generation, you have to exercise responsibility and restraint. Careful planning and execution are the order of the day. It is quite selfish to only seek to satisfy your own personal desires and goals. The leader of any business must put the health and well being of the business and all family members equal to and along side of his own aspirations. There must be honest discussions and realistic expectations on both sides for this process to be a success. But remember that the words of Kenny Rogers’ song apply to you as well. You have to know when to hold’em and when to fold’em, and if you’re holding a hand that is a good one and you are not being allowed to play the cards, it may be time for a new table where the odds are not so heavily in favor of the house. The senior generation brings the gold to the table, you bring the youth and vitality that will allow the business to prosper and continue. The trick is going to be how and when and to what degree both generations are able to meld these two very powerful attributes into one synergistic force.
So in succession, timing is everything and the time to sit down and discuss this vitally important issue is now, right now, today. Everyone deep down wants a happy ending to the story and it will in Orson Welles’ words only happen if all know when the story should end. Winston Churchill put it so well when referring to the British Victory over the German Afrika Korps at the second battle of El Alamein when he said “Now this is not the end. It is not even the beginning of the end. But perhaps it is the end of the beginning.” I believe that Churchill’s words epitomize what a successful succession plan can be.