top of page

Fred Passes The Baton!

Updated: May 28


Like sprint relay teams who drop the baton in attempting to pass it, most businesses fail in transition to second-generation leadership.

Sprint relay teams are famous for their failures in passing the baton. The U.S. men's relay team messed up their baton exchange in seven of their previous eleven Olympics and world championship meets. Since 2005, the team has either not finished or been disqualified because of a baton exchange failure six times. It [is] the worst rate of failure of any national team in the same time frame.

Like sprint relay teams, most businesses fail in their transition to second-generation leadership.

Fred retires from the company he started. Employees, customers, and suppliers all show up at his retirement party to honor him. It is an emotional celebration of his decades of business that makes a profit, blesses the community, and advances its purpose. It is a celebration of shared values and mutual commitment.

But, decades earlier, it didn't start that way.

Fred starts the company as a partner with one of his best friends, Jim. As happens often, the two give themselves so totally to serving their customers that they neglect to work on their relationship.

A lot of little things begin to add up. Their interactions become toxic. They ignore each other. The staff takes sides, tension exacerbates, and the business is crippled. Each day is more toxic than the one before.

The end comes on a day when Jim explodes in emotion, demanding to buy the company or be bought out.

Fred gets the company but loses a great relationship. The tension is so great these two former best friends and their families never speak again. It is a painful loss they both endure to this day.

The struggle with Jim leaves Fred with a newfound appreciation for developing a team where trust is paramount. He has learned that this trust flows from a shared set of values. His passion now is building a successful company and a team that can continue his legacy.

For the next twenty years, Fred builds the company, only allowing those who share his values to become equity owners. He understands all too well that for partners to have ownership and decision-making power but not share the same values is dangerous.

No one is allowed to be an equity owner without aligning with company values.

After many years, the three senior partners that Fred elevates work closely with him to ensure that the company can continue to prosper and grow in his retirement. They determine where Fred is strong and most effective in the company. He begins a transition toward retirement, moving to part time, working in these areas.

As part of a ten-year payout, Fred begins to receive his buyout money while also getting a check for working part time in his areas of strength. This works wonderfully as the company prepares for his absence.

When the time is right, Fred announces his retirement. It is a high and happy time for him and the company. During the transition, the company never misses a beat and continues to grow.

Most companies don't prosper in their second generation of leadership. But Fred beats the odds and passes his baton to the next team to continue his legacy.

In his absence, the company continues to make a profit, bless its community and advance its purpose.

There is no success without a successor. Seventy percent of businesses fail in their second generation of leadership. This does not have to be the story at your company.

Succession planning begins with conversations. To help fuel these conversations I have created 14 Questions To Fuel Succession Planning Conversations. It is my gift to you, free! CLICK HERE TO DOWNLOAD.

Harry T. Jones

P.S. Don’t neglect powerful succession planning, CLICK HERE TO DOWNLOAD my free resource, 14 Questions To Fuel Succession Planning Conversations.

*Like all my stories, Fred's story is real. The name and some particulars have been changed to protect them.

More Popular Posts From Harry T. Jones

19 views0 comments

Comments


bottom of page