Letting go of the baby

Owners of small to medium sized businesses often don’t have a clear idea of what will happen with the company when they eventually come to retire or simply want to pursue different interests.  Even when they do, they simply have trouble “letting go of the baby”.

Baby being handed from one person to anotherWill the company continue?  Is the company in a suitable state to be able to sell it or will it be the case of shutting the door and walking away?  Many owners realise that to be able to sell the business it needs to be able to stand on its own feet without the need for them; and to make it attractive to purchase it possibly needs to grow in terms of size and profitability.  Some owners also recognise they need help in making these changes, to drive business development and to put clear processes and procedures in place.  Some even recognise that new people may be required.  However even when all of this has been done, many fail to see the hurdles that lie ahead between now and the point of exit, in particular the people issues that can occur if the process is not carefully planned and managed.

From the owner’s point of view, having possibly built the business from scratch, there may be a large amount of emotional attachment to what is metaphorically seen as the owner’s ‘baby’.  There can be a number of personal issues to be faced and overcome, such as: coming to terms with what the exit means for them personally (what will they do with their time post-exit); letting go from an emotional point of view (changing the idea of the business as being their baby to it being an investment); letting go from a control point of view (trusting the team); accepting they don’t know it all (taking advice on the best strategy for exit); and feeling guilty of imposing a new owner on the team (the bad ‘parent’).

As the exit draws near and certainly afterwards, there may be additional issues: a reduction of self worth; a sense of loss, almost akin to bereavement; and a fear of what comes next.  To address these, the business owner needs to create very clear personal goals and have a clear plan for what to do after the exit.

At the same time, the business owner is responsible for ensuring the rest of the employees are taken through the exit in as smooth a way as possible, without the loss of any key personnel.  Some may welcome the news of a new owner; however others may be against it and fear for their own future.  To ensure a smooth transition, the owner may need to develop new skills, such as: introducing change; dealing with dissent; dealing with conflict; building trust; presenting to the employees; presenting to prospective buyers; and delegating tasks.

One-to-one coaching of the owner, plus facilitated workshops with the management team and other key-employees can help address the above issues, developing the communication skills and relationship skills of the owner to develop the trust needed for the team to buy into the strategy.  It also helps in building self-confidence in the owner, who may not be used to the activities and responsibilities required for the transition to be a success.

Of course when there is more than one owner and a joint exit strategy is required, the above issues are magnified.  Here again, one-to-one and group coaching of the individuals involved can help achieve common goals and understanding, helping each owner to understand the drivers and motivation of the others.

Remember, when “letting go of the baby” and trying to ensure a successful exit, it is not enough to just put in the required systems and procedures, you also need to recognise and deal with the people issues that will inevitably occur.

 

Mike Jones specialises in improving relationships in businesses by developing emotional intelligence.  If you would like help in managing a successful exit, call him now on +44 (0)1908 509088 or email mike@potentialmatters.co.uk.

About Mike Jones

Mike Jones is an executive coach specialising in developing Emotional Intelligence through transitional and performance coaching. You can contact him directly on +44(0)7747 011 589 or via mike@potentialmatters.co.uk

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