How valuable is your legacy to you?
How much is it worth to you to protect your legacy? No, really, how much? Can you even put a price 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 the peace of mind of knowing that your legacy is protected worth to you? Have you taken the necessary steps to protect your legacy and your butt-busting business for years and even decades? Here you have another question. In the event that something unexpected should happen to you where you are no longer able to run the business, do you have a number 2 in charge identified, ready and ready to step in at any time to take over on your behalf? If your answer is “No”, why not? If “Yes”, are you sure you are the right person for the job? One last question (I know, “Enough questions already!”). What could your company do if there were two? How much greater could the results be? What would be the impact on EBITAD if it could be replicated? Having a second in command who can step in and run the business, not a division, the whole business, it’s not just about you, the owner, but all the employees who work for you. Many families depend on your business. Not having a number 2 in command (the correct number 2 in command), identified and prepared to take care of you should something unexpected happen to you, can be summed up in one word: selfish! Let’s not sugarcoat this topic because it is too important; too important to you, your family and 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 plenty of time to get things in order,” consider the following:
Name: Company title:
1. Donald Terner, President of Bridge Housing Corp.
2. Robert Donovan President and CEO Abb Inc.
3. Claudio Elia President and CEO Air & Water Technologies Corp.
4. Stuart Tholan President Bechtel
5. John Scoville, President of Harza Engineering Company
6. Leonard Pieroni President and CEO Parsons Corp.
7. Barry Conrad President and CEO Barrington Group
8. Paul Cushman, President and CEO of Riggs International Banking Corp.
9. Walter Murphy, Senior Vice President, 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 of Guardian International Interguard Corp.
Do you recognize any of these names? These are the CEOs who were on the plane with Clinton Administration Secretary of Commerce Ron Brown on an official trade mission when the plane crashed on April 3, 1996. There were no survivors. You wonder if they had their number 2 in charge, identified and ready to step in immediately and take over their company.
Here’s 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. Plane Crash in Circuit City 2005 Multiple Senior Leaders
4. Sara Lee 2010 Brenda Barnes Stroke
One last attempt to convince you to have a # 2 in command:
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 for retirement in 2020. The resulting talent gap will have a direct impact on the future sustainability of all companies. -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 your successor will need a number 2 at the helm.
3. If your number 2 in command is your:
�� CFO: Do you have the operational experience to be successful?
�� COO: Do you have the financial experience to be successful?
�� Any other position in your company – My CFO and COO comments apply to all of them.
This topic is deeply personal to me. That’s why I take 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 thrown. He was in a coma for 4 months and eventually died, leaving a wife and four young children, all under the age of twelve. Mike’s plan was to pass his business down to his children. Mike didn’t have a number 2 in command because he was too busy running his 28-string QSR. He was too busy to identify and develop his number 2 command. Not very different from most of us, right? Mike’s CFO stepped in to run the business, but failed miserably because she didn’t have the operating experience. The COO was next in line and his authoritarian leadership style, which contrasted with Mike’s “People First” leadership style, resulted in an employee revolt. On the advice of Mike’s bankers and advisory board, Mike’s business sold for $ .57 to the dollar.
Bottom line: Mike’s story doesn’t have to be yours!
For more information on this topic, visit http://www.2incommand.com