Managers and owners typically go through a series of stages during successful transitions, from first becoming aware that their model of making all the decisions may not work when their authority is shared with others, to exploring options, to developing a vision and plan for how to do their transition and protect their interests, to implementation, and finally evaluation and adjustments if needed.
We meet our clients wherever they are in their unique transition. Together, we examine and address what needs to be accomplished in order to move through each stage of the transition process. The Balance System never goes faster or further than the primary decision maker is able to support. The pace of the work is decided by the primary decision maker; he or she has sole control over how fast or slow the work progresses. We help the primary decision maker evaluate the consequences of going too fast or too slow, and we help others affected by the transition accept the pace.
The Balance System is based on a thoroughly vetted and widely accepted behavioral change model that explains why successful family business transitions require more than a set of legal documents.1
Where are you?
1. “I’m not ready for change.”
During the Peripheral Stage, transition planning is a marginal idea for the primary decision maker, who for any of a number of reasons is not ready for change.
2. “I probably should do something.”
In this stage, the decision maker acknowledges something should be done. Often confused with “draft an agreement,” the Vision Stage is actually the time for the primary decision maker to begin to imagine what a successful transition might be like.
The Balance System offers resources and activities that help the primary decision maker identify those parts of the history, meaning, purpose, and legacy of the business and family that are important, and from this information help the decision maker create a succinct “vision” of his or her successful transition.
We also prepare other members of the senior generation whose involvement would increase the chance for success (e.g. a spouse) to review the primary decision maker’s vision relative to their personal values, needs, and goals. We also coach the senior generation on their role, interest, and commitment to helping achieve the transition vision.
During the Vision Stage, we help the primary decision maker conduct an accurate cost-benefit analysis regarding the transition vision based on doing nothing or doing something.
3. “How do other business owners successfully do this?”
Successful transition requires getting the successors ready to achieve the primary decision maker’s vision. Once the primary decision maker begins to realize he or she is still in control they are ready for the Plan Stage.
A transition plan is developed so others can become prepared to achieve the primary decision maker’s vision of succession.
After learning from key senior and successor generation members about their values, needs, goals and what they would like to see, the primary decision maker:
- Assesses the current reality in light of his or her transition vision
- Assesses the extent to which current systems for decision making and interactions can stay the same — or need to change — in order to accomplish the vision
- Drafts a transition plan to achieve the transition vision in response to the current reality and how the current systems need to change
4. “Okay, I’m ready to try it.”
The Implementation Stage signals when the transition plan is tested. The primary decision maker can see how successors participate, and successors are given the opportunity to learn and practice their roles and responsibilities. Trusted Advisors can help the primary decision maker evaluate the progress and recommend changes.
We complete only the transactions needed to test the transition plan. This holds down unnecessary expenses.
5. “How’s it going?”
During the Recalibration Stage, everyone is responsible to the transition plan and the system designed to achieve the vision and plan. This helps the primary decision maker evaluate whether the changes successfully fulfill his or her vision and the transition plan. As with learning other new behaviors, additional coaching, training, and reinforcement may be necessary.
To learn more about the Balance System and how we might help you transition your business, please call 952.681.7125.