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Gloria, Maximum Speed & Conversation #7

Updated: May 28

Gloria is a veteran in her industry. She founded her company twenty-five years ago. Very comfortable in her role, she knows everyone in her industry on a first-name basis.

Her team’s longevity is a source of pride. Basically, she has the same inner circle she started with decades ago. Loving what they do, they all joke that they want to work until their last breath.

Gloria is 68 and has slowed down.

She has actually been coasting for years now. Her team has all been slowing down together. Her board chair is 80 and five of the six board members have served over twenty years and are no longer actively leading a business.

As Gloria and her team slow down to enjoy life with their grandchildren, they are unaware of how the business suffers. Her best people are missing the growth opportunities that would present themselves in a thriving business. The business is coasting and is not attracting fresh talent to take the business to new levels.

Gloria is stuck, she just doesn’t know it. She is in for a rude awakening.

As Gloria continues to slow down, she looks at succession planning. She checks the industry valuation standards and begins looking for a buyer for her business. At industry conventions, she interacts with brokers who can help her sell her business. They are confident that she can get top dollar.

Gloria plans her retirement, banking on getting top dollar for her company.

Quickly, Gloria gets a verbal agreement from a company that will buy her business. She is excited. But after the company examines her business, they back out because Gloria has not raised up a team to succeed her. Without Gloria and her aged team at the helm, her business is not as valuable.

With a broker’s help, they find another company, but after investigating her business, they offer her half the industry standard.

Gloria slowly realizes that in failing to raise up a team to lead the business in her absence, she has hurt herself. The more she understands this reality, the more she sees she has also hurt the company and her people.

After close investigation, the second potential buyer discovers that she has a weak board that hasn’t built a team to thrive in her absence and drops out of the deal.

Gloria finally makes a deal to sell her company for a fraction of what she had planned on.

Relay teams that win spend a lot of energy practicing passing the baton at maximum speed. The runner with the baton and the runner for the next leg must be running at maximum speed. There is only a brief window of opportunity for the runners to exchange the baton in the relay box. When the runners don’t pass the baton at maximum speed inside the relay box, they often forfeit a win.

This is a problem for Gloria and her team. For years now, they have been slowing down. Passing on the business at its maximum potential is not an option.

Here is a succession planning gold nugget: You can slow down but your company can’t.

The savvy entrepreneur builds their company like they will own it forever and the team they are building will buy them out.

In conversation six of the twelve succession planning conversations, some good questions to ask:

1. What is a workable plan for passing the baton?

2. What is a possible timeline?

3. What might the milestones to measure progress be?

4. How might the leadership team and other team members be empowered to succeed?

5. What aspects of the culture and leadership style could be improved to help succession?

Remember, 70% of all businesses fail in their second generation of leadership. There is no success without a successor.

Your business will thrive, I have confidence in you!

Harry T. Jones

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