Succession: Passing the Baton of Business Ownership to the Next Generation

How can you ensure a smooth “exchange” when passing the baton of business ownership to the next generation?

?Hopefully, this podcast episode can help.

?It offers a glimpse behind the curtain of a company transitioning to the next generation.

?That’s why this episode is so personal to me. We’re talking about our company: Legacy Advisory Partners.

?In Episode 33 of #The3WinsPodcast, I sat down with my father-in-law—and the founder and CEO of Legacy—to discuss the ins and outs of passing the business on to the next generation.

?David explains how to hand over the reins of ownership in a timely and suitable way, and how the next generation can take over the role as smoothly as possible—incorporating their own values and personal leadership style, all while respecting the company culture and structure they are inheriting.

?Watch the full episode here. Below are the big takeaways from the episode for easy reference.

?Episode Highlights

Here are the key takeaways from Episode 33 with David Harper:

?1. Beware of the potential pitfalls.

(01:45) Passing the baton to the next generation is, more often than not, done poorly. This is usually because founders have their identity tied up in their business and may have trouble relinquishing control. For a company to thrive beyond the current founder, there must be collaboration over sheer control.

?2. Build your successor’s leadership capabilities.

(06:56) One of the main traits that determine the suitability of a company’s successor is how well other people in the organization recognize their leadership capability.

?3. Ensure a level playing field between you and your successor.

(11:42) There should be equality between how Gen 1 and Gen 2 express themselves as company leaders. Gen 1 should never make Gen 2 feel as if they have to defer to the former. Instead, Gen 1 should make it clear that Gen 2 has a voice.

?4. Plan for what to do if things don’t work out.

(18:17) In case of a crisis in which the previous generation is unable to go through the gradual transition of ownership (due to the owner’s death, for example), there are three factors to consider: legalities; governance (i.e. who owns stock) and how those assets will be refunded; and how roles will shift including who needs to be hired.

?5. Create a culture that ensures long-term success long after you move on.

(21:42) Long-term success following a transition of ownership relies on four elements: humility over egotism, which leads to role optimization and clarity; knowing one’s Most Important Tasks (MITs); attentiveness over distraction; and empowerment through feedback.

?Connect with the Guest:

●?????David Harper, founder and CEO of Legacy Advisory Partners:

●?????David on LinkedIn: https://www.dhirubhai.net/in/jdharperjr/

?Connect with the Host:

●?????Russ Clemmer, president of Legacy Advisory Partners

●?????Russ Clemmer on LinkedIn: https://www.dhirubhai.net/in/russclemmer/

●?????The 3 Wins Podcast is presented by Legacy Advisory Partners: https://www.legacyadvisorypartners.com/

?Connect with the Producer:

●?????Sean Lyden, CEO, Lyden Communications

●?????Sean Lyden on LinkedIn: https://www.dhirubhai.net/in/seanlyden/

●?????The 3 Wins is produced by Lyden Communications LLC: https://strategyandstorytelling.com/

?To learn more about how to apply The 3 Wins Framework in your business, download our FREE whitepaper, “The 3 Wins: How to Unleash the Collaboration Effect on Profits in Your Company” here: https://www.legacyadvisorypartners.com/signup-for-free-book-download.html

?The Great 8: A New Paradigm for Leadership, by J. David Harper, Jr., CEO of Legacy Advisory Partners

https://www.amazon.com/Great-New-Paradigm-Leadership/dp/0986233609

?Disclaimer: Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer member FINRA/SIPC. Advisory services through Investment Advisor Representatives of Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Legacy Advisory Partners are not affiliated.