How much is protecting your legacy worth to you? No seriously, how much? Can you even put a price tag on one’s legacy? In reality, it is more a matter of peace of mind than financial. So let me rephrase the question. How much is your peace of mind worth knowing that your legacy is protected? Have you taken the necessary steps to protect your legacy and the business you’ve been working your ass off for years and even decades? Here is another question for you. If something unexpected happens to you where you can no longer run the business, do you have a number 2 in charge identified, prepared and ready to step in at a moment’s notice to take over on your behalf? If your answer is “No”, why not? If the answer is “Yes”, are you sure you are the right person for the job? One last question (I know, “Enough of questions!”). What could your business do if there were two of you? How much greater could the results be? What would be the impact on EBITAD if it could replicate itself? Having a #2 at the helm who can step in and run the business, not a division, the entire business, it’s not just about you, the owner, it’s about every employee that works for you. Many families depend on his business. Not having a #2 at the helm (the right #2 at the helm), identified and prepared to replace you should something unexpected happen to you, can be summed up in one word: selfish! There is no need to sugarcoat this topic because it is too important; too important to you, your family and the many families who depend and trust you to take care of the business… for the good of all.
In case you are thinking: “Nothing is going to happen to me”, “I have a lot of time to put things in order”, consider the following:
Name: Position Company:
1.Donald Terner President Bridge Housing Corp.
2. Robert Donovan Chairman and CEO of Abb Inc.
3. Claudio Elia President and CEO Air & Water Technologies Corp.
4. Stuart Tholan President Bechtel
5. John Scoville President Harza Engineering Company
6. Leonard Pieroni President and CEO of Parsons Corp.
7. Barry Conrad President and CEO Barrington Group
8. Paul Cushman, Chairman and CEO of Riggs International Banking Corp.
9. Walter Murphy Senior Vice President of AT&T Submarine Systems, Inc.
10. Robert Whittaker President and CEO Foster Wheeler Energy International
11. Frank Maier President Ensearch International Ltd.
12. David Ford President and CEO Interguard Corp. of Guardian International
Do you recognize any of these names? These are the CEOs who were on the plane with Secretary of Commerce Ron Brown of the Clinton administration, on an official trade mission when the plane crashed on April 3, 1996. There were no survivors. You’ll wonder if they had your #2 in charge, identified and ready to immediately step in and take over your business.
Here is another example of how life can surprise you:
Company: CEO: Cause of death:
1. Wendy’s 1999 Gordon Tetrer Heart Attack
2. McDonald’s 2004 Jim Cantalupo Heart Attack
3. Circuit City 2005 Multiple Senior Leader Plane Crash
4. Sara Lee 2010 Brenda Barnes Stroke
One last attempt to convince you to have a #2 at the helm:
1. When the owner suddenly becomes disabled or dies, and his ill-prepared spouse or children take over the business, the likely result is bankruptcy or liquidation. -Entrepreneur Magazine
2. 60-70% of all family businesses that lose a founder through retirement or death are sold or liquidated. -Inc. Magazine
3. 40% (64 million) of the US workforce will be ready to retire by 2020. The resulting talent gap will have a direct impact on the future sustainability of each company. -The Wall Street Journal
Key issues to consider:
1. If your planned successor is one of your children, it’s not about “Who’s next”, it’s about “Who’s the best”.
�� How do you know which of your children is the best for the job?
2. Even his successor will need a #2 at the helm.
3. If your #2 in charge is you:
�� CFO: Do they have the operational experience to succeed?
�� COO: Do they have the financial expertise to succeed?
�� Any other role in your company: My CFO and COO comments apply to all of them.
This topic is deeply personal to me. That’s why I’m taking the time to write this article and a few follow-up articles to get you thinking about this critical business imperative. My friend Mike died at the age of 43. He was riding his Harley Davidson Switchback touring motorcycle (with helmet) and was shot. He was in a coma for 4 months and finally died, leaving behind a wife and four young children, all under the age of twelve. Mike’s plan was to inherit the business from him to his children. Mike didn’t have a #2 at the helm because he was too busy running his 28-chain QSR. He was too busy to identify and develop Mando #2 from him. Not unlike most of us, right? Mike’s CFO stepped in to run the business, but failed miserably as she did not have the operational experience. The COO was next in line and his authoritarian leadership style, which contrasted sharply with Mike’s “People First” leadership style, resulted in an employee revolt. On the advice of the bankers and Mike’s board of advisors, Mike’s business sold for $0.57 to the dollar.
The bottom line: Mike’s story doesn’t have to be your story!
For more information on this topic, visit http://www.2incommand.com
