Carl Can’t Let Go

Today, Carl is particularly proud of his business, a heavy equipment dealership that he co-founded 30 years ago with an older business partner. They literally built it from the ground up. In a high-performing region, their dealership has always ranked in the top three for sales performance and has been profitable every year but two. At 64, he is financially comfortable, but still working 70 hours a week, battling Diabetes and newly single after his business partner’s recent death.

In his corner office overlooking “the yard,” the responsibility to “keep the lights on” for 165 employees is weighing on him more heavily than usual. He just got back from his partner’s funeral. At 70 years old and seemingly healthy, his business partner Dan had a massive heart attack while walking the dog. Although Dan had retired five years ago and Carl had assumed all his responsibilities, it was nice to have the ear of someone who really understood the company. Dan will be missed.

There certainly isn’t anyone on Carl’s team who comes close to filling that hole. To be honest, Carl doesn’t have much confidence in his management. They don’t step up when he needs them to and although they keep saying they’d like more responsibility they haven’t proven they can handle it. Customers still come directly to Carl and he knows the finances better than the controller. If it wasn’t for him, the place would fall apart. No wonder he still works seven days a week.

But that’s leadership, isn’t it? Somebody has to take responsibility and he’s not letting go of the reins yet. He’s only 64, and who would take over anyway? Nobody would run the company ‘the right way’. A friend who sold his company last year asked what would happen if Carl died. He has that under control. He has left instructions with the company’s attorney to immediately liquidate the company’s assets and shut the doors.

The Acevez's Succession Plan Goes Awry

Andres and Lisa Acevez own a highly profitable specialty distribution business serving the aerospace and medical device industries. The business is highly specialized and requires technical expertise not commonly found.

The Acevez’s have two children and their son is actively involved in the business on a full-time basis and their daughter is part-time. To make it more difficult the Acevez’s son-in-law works in a key role and his relationship is strained with the son. Lisa has most of the institutional knowledge and if there is no one to take over the business, it will probably be closed or sold for very little due to the dependence on her.

Andres and Lisa have always treated their children equally. As a result, the total salaries and ownership of the business upon their death is equal. They believe their son will eventually control the business and the daughter will most likely be a passive owner. Although Andres and Lisa love their children dearly and want equality, they also know this arrangement will not work for the growth and successful continuation of the business.

What should they do? How can their legacy and their business’s legacy be carried on? How would their kids navigate the complexities of the business without hurting their relationship with one another and jeopardize their financial future?

Andres and Lisa discovered the sibling relationship and the succession issues were intertwined and needed to be resolved together. After thorough interviews and facilitated discussion, thinking through a transparent compensation plan and division of assets, successful resolution was well on the way. The key learning for Andres and Lisa was the need to find alignment through communication.

Sam Gets Sick

Over the past 35 years, Sam has started six successful companies in the US and parts of Central and South America.

Now 65, his vision is to continue growing the businesses, while gradually transferring ownership to his key employees. This would give him what he needs for retirement, and he would be independent of the company for his continued livelihood. It’s a win-win situation in Sam’s opinion because his managers will benefit and they will experience the thrill of running their own business.

Sometimes things don’t work out as planned. Right now, four of his companies are facing issues that are threatening their competitiveness and survival. After building a good management team, Sam has had to take the reins again because the market has become extremely volatile and sales are too dependent on a small number of customers in the same industry.

Plus, with a slowing economy, customers are paying more slowly, and cash flow is an issue. It also feels like the companies are missing a clear vision for the future – something he thought they had nailed but since he’s stepped back into more of a Chairman’s role, alignment around their core strategies has fractured. Sam has reluctantly taken a more active role in management again, but this dependency on him was what he was trying to avoid when he professionalized management.

Now, Sam is sick – a serious diagnosis that came out of left field. His wife is terribly worried and his kids are freaking out. His health has inserted a higher level of uncertainty with staff and his bankers and reduced the time he can provide leadership and guidance.

However, it is not all bad. Several members of his team have stepped up to fill the gap. And he has been able to complete the sale of one of his businesses to the management team, which provides him and his wife with additional financial security. But he still has five businesses and is carrying a lot of personal financial risk.

Every day feels like a gift, but it really would be nice to spend more time with his family. Even at 65, it never occurred to him that all of his businesses would need to be transferred so early.