- Embrace the tools of leadership and trust with confidence
In this stage, owners really begin to see the transition process take hold as employees embrace the tools of leadership they have been given over the course of the first two steps. At this point, every employee should be working under the shared-fate philosophy, meaning all employees share in the company’s success. These tips will help in this process:
- All for one, one for all: Institutional knowledge and business savvy has been shared through authentic conversations and empowerment, but how does a business owner pass on to others the type of attention to detail that keeps them up at night? A shared-fate system that links financial reward and loss is one successful method. This involves creating a single financial metric that drives the organization as well as rewards the entire team.
- Use the tools: Use a common vocabulary for discussing the business that is based on shared facts. This is achieved through using the corporate dashboard, SWOT, and employee and customer surveys. Taken together, these tools make it possible to have knowledgeable discussions about the organization.
- Embrace a shared fate philosophy: The entire team can now access the corporate knowledge base and change systems and process to positively impact operations using the strategic planning and system improvement. The team can collectively share the successes and failures of the organization through shared fate. The foundation has been developed to discuss
real ownership. - Define ownership: It is important to create a common understanding about what ownership means going forward. Some common questions to address include:
ο What should be the criteria for an owner?
ο Who should decide who gets to buy stock and when?
ο Who should run the company when there is not a majority owner?
ο Should owners personally guarantee debt when required?
ο Who should not be allowed to buy stock?
ο What decisions should the owner expect to make or be consulted?
Ultimately, these steps—and working with a knowledgeable partner—will help business owners turn the most difficult transition of their lives into a rewarding experience for employees, customers, and themselves.
Scot Hunsaker purchased a small engineering firm operating as a sole proprietorship from his father. That firm, Counsilman-Hunsaker, has designed aquatic facilities all over the world, including Olympic venues. During his tenure as CEO and owner, he increased company revenue, quadrupled the number of employees, opened four new offices in the U.S., and went from being licensed to work in 10 states to operating in all 50 plus three Canadian provinces. He sold Counsilman-Hunsaker to the employees for cash in 2012. Hunsaker has presented numerous seminars on business succession planning and is also the author of 30 published articles. In 2013, he formed Ardent Consulting to help CEOs and company owners prepare for these transitions with a particular focus on teaching employees how to think like owners. He can be reached via e-mail at scot@ardentgroup.com.
