For family business succession, one needs to examine the meaning behind the word "yes."
By Beatrice E. Wolper
Finally! The operating generation (current leader) of the family business, or OGFB, has agreed to start succession planning. But for many family businesses, the long awaited "yes" is only a word. And as Chris Voss states in his new book, Never Split the Difference, "yes" has three different meanings-all starting with the letter "C."
The three "C"s of YES:
COUNTERFEIT. In this scenario, the OGFB says "yes" to the question, "Will you now start to discuss succession?" In reality, all the OGFB wants to say is "no ... and please leave me alone." He or she will say "yes" just so the person asking will leave the room! The OGFB is agreeing that succession planning will occur "someday," but not today and probably not tomorrow. The "yes" is counterfeit and an attempt to appease the person asking the question, and move on with the next discussion. This type of procrastination can be dangerous to the family business.
CONFIRMATION. The OGFB says "yes" but means, "I hear you. I am listening and nodding my head, but I do not intend to start succession planning any day soon." He or she may not mean to be procrastinating, and may have good intentions … however, the confirmation "yes" is merely a recitation that the OGFB is listening and has heard the words, but does not agree to start the process. In order to move the OGFB towards action, a meeting with a person who has expertise in succession planning for family business may be helpful. Since ninety percent of family business owners want to have the family business succeed to the next generation, it may be helpful to hear that only 50 percent do something about it!
COMMITMENT. When the OGFB says this "yes" to the discussion of starting succession planning, action steps are decided and implemented. The OGFB and the next generation should get the key advisors together to plan and begin the process. Maybe a family council is scheduled, maybe discussions occur with trusted advisors, maybe a draft of a buy-sell is set in motion, and maybe the trust is revised. No matter how the journey begins, the important fact is that it begins!
It is important to recognize "yes" does not translate into the desired result of meaningful succession planning. For family business succession, one needs to examine the meaning behind the word.
Beatrice Wolperis the President of Emens &WolperLaw Firm Co. and co-founder of the Conway Center for Family Business.