Deadly Sin #7 – Be A Hands-On Manager

Throughout the first six articles in this series we’ve talked about how owners who have built up a successful business have worked hard on seven good habits that have served them well in developing their business. Now however they need to undo and rework those good habits if they are to successfully transition the business, either through a sale or hand-off to family.

This seventh habit sums up everything we have discussed in the previous articles and specifically addresses the habit of “Being a Hands-on Manager”

Knowing every aspect of your business has been important to you. It has given you peace of mind and allowed you to sleep at night knowing that you are in control of your own fate. Depending on your management style you may have been able to let go of some of the less important issues that made you feel that you could step back from the day-to-day operation of the business. But leaving the business for more than a week at a time is still difficult. The time has come for you to take the next step. Its time for you to “Take Your Hands off the Wheel”

How do you know when it’s time to step aside and make room for a new generation of leaders? And what’s the best way to handle the transition?

Look at the needs of your business.

You know your business best so think about where it is and what it requires to move forward. It could be you’re doing well but have plateaued and things have been the same—product and service offerings, advertising, earnings and revenue—for a while. If you’re looking for growth and innovation, the right new leadership can bring that about. Think about the role new leadership will play, whether that’s handing over reins to your children or to up-and-comers in the organization. How can you prepare them for the challenges ahead and to be sure the business flourishes in the future? Consider these recommendations from Forbes.

Prepare the next generation of leaders.

It’s best to prepare those you want to lead the business by embedding them in the business early in their more junior roles, so they understand—bottom to top—how the business works. Set up a relatively long-term shadowing program for those you intend to promote up into the business’ leadership, family members or not. Have junior leaders see you doing the things you’re best at, like customer interactions, sales, managing an engineering staff or a manufacturing floor. The goal is for the person doing the shadowing to observe as closely as possible all the small decisions, interactions, adjustments and responses a company head has to make.

Learn to communicate across generations.

Millennials, just by virtue of their age and their life stage, are not as focused as you are on the legacy of the business—maintaining all you’ve built and the financial security that creates. Millennials are looking for new opportunities and may not be thinking about all that came before them and that can cause some friction. However just talking about it can go a long way toward diffusing tensions that come from different perspectives. Acknowledge that you understand they are eager to make changes and boost revenue and sales, but also talk about the company’s history and its mission and the importance of staying true to that.

Ease into the back seat.

If you’re transitioning to less of an ownership role or selling the business outright, you may want to set up what’s known as “seller financing.” It’s been more common since the economy downturn, when buyers couldn’t get a loan to cover the entire cost of a company. With seller financing the owner agrees to get paid over time. It will also allow you to stay involved with the business longer and ensure a smooth leadership transition, which is good for employees, as well as clients, customers and vendors.

Move aside and stay there.

Once you do step down, no matter what role if any you’ll continue to play in the business, it’s important to let the new leadership find their own way of running things. Questioning why they are dong things differently than you won’t help them do get dug into the role any faster. You can always give some advice about steering the business if you feel it’s warranted, but at some point you have to take your hands off the wheel.

Next 30 days: Identify specific roles in your business that you think would be a good fit with each of the individuals in your company who you plan to transition to. Have a conversation with each employee about how they would handle the transition and put a step-by-step action plan in place to allow you to take your hands off the wheel.

• Reference:
  • Forbes
  • Barron’s Advisor Centre
  • Exit & Retirement Strategies in Centennial