Have them work in different parts of the company. I think it’s good for them to give them these opportunities so that the next generation can try and learn about the industry. It’s also good for founders or parents, entrepreneurs.
How should an owner help a child who is interested but not ready to take over?
My favorite thing to do – have them do summer jobs or after-school jobs with companies while they’re still young. Give them a chance to meet the people who work there and learn some basics.
There is nothing like gaining experience in another organization. Gaining experience elsewhere can build confidence, whether they work for another company in the same industry, or any well-run business. That way, no one else in your company thinks, “Well, of course this person is here because they’re the founder’s kid” and underestimates their abilities. If you are from another organization, you have the opportunity to prove yourself there.
When they do join the company, there’s an intentional plan where they work in different elements — sales, operations, finance — and then a step-up plan to take on more responsibility.
avoid divisive leadership
Do you recommend that the owner spend some time — a year, five years, six months, etc. — with the person who will take over and manage it together before the owner leaves? Or is it better to put it where one day you are the owner and the next day someone else takes over?
There are two schools of thought. Someone who has been mentored and trained and grown into this role is great, and it makes sense.
Where you do get challenged is if there is any notion of co-leadership.Then, in the org you get confused [the employee] go. It’s a flawed concept that’s rarely done well. Not impossible, but rarely done well.
This is where the “one size fits all” concept can come into play. If you’ve done a good job — whether it’s picking great people from the outside and getting them ready, or developing someone from within the organization — when you hand it over to them, you can really separate that way People don’t destroy their chances of success by continuing to come to the founders.
SEE ALSO: ‘We’re Surprised and Confused’: My Brother Dies, Giving His House, Cash and Possessions to Charity Can his siblings object to his will?
take his own advice
What’s in your succession plan for Cresset?
Cresset is young; five years old. But even in the earliest days we did all the things you and I talked about in terms of tax accounting and legal planning.
Our business vision is to build a 100-year platform, and we think it is very likely to exist in 100 years. So in succession planning, that includes bringing incredible talent to our leadership team.
We’ve built a team where if anything happens to Avy or me, we feel like our clients and our team members are on a resilient leadership team and a deep bench.
Do you have a written succession plan, if that happens… or in 2032, Avy and I are going to leave, who is going to take over? Or is it open ended?
It’s written around unplanned succession because the platform is young, because we love it and have energy, and we don’t have immediate plans for our own retirement. We just finished our first five years.
A written succession plan is something we’ll be doing over the next five years, certainly before I turn 65.
Richard Eisenberg is the former senior web editor for Next Avenue’s Money and Security and Work and Purpose channels, as well as the site’s former editor-in-chief. He is the author of “How to Avoid a Midlife Financial Crisis” and has served as personal finance editor for Money, Yahoo, Good Housekeeping, and CBS Moneywatch.
This article is reproduced with permission from NextAvenue.org, (c)2023 Twin Cities Public Television, Inc. all rights reserved. This is part of Leaders Lessons, the Next Avenue initiative by the Richard M. Schulze Family Foundation and EIX, the Entrepreneurs Innovation Exchange.
More from Next Avenue:
-Richard
(End) Dow Jones Newswires
01-31-23 0501ET
Copyright (c) 2023 Dow Jones & Company, Inc.
