By Prof. Enrique Soriano
I am sharing a timely letter addressed to business owners. It is meant to assure them that they are not alone. That whatever challenges they are facing now is a mirror image of what many owners are presently experiencing. Time is both a friend and enemy in a succession journey. The choice is up to the owners of family enterprises.
“Dear Prof. Soriano, I am a healthy, 72-year-old founder of a successful business. I am reaching out to you after a friend sent me some of your articles related to succession. One particular title, “He knew this day would come,” roused me (honestly, it provoked me) and made me uncomfortable for a few days. This made me reflect if I am really helping prepare my children to transition. I have two sons and a daughter; all three have been helping me for many years. The eldest, Jr, has been with me for the longest time. This year, he will be celebrating his 20th year, Johnny, 18 years, and Joanne, almost 15 years. They have been involved in the management of our business, and I can say they have done a good job. The first few years were quite challenging; all of us made adjustments. We had to keep our egos in check while running the business. Eventually, we got along well when we hired a consultant to align our responsibilities. We have taken strides in the last few years, and that is why we have cushioned the impact of the pandemic. I thank my children for being persistent in convincing me that we should plan and think ahead every 2 to 3 years. If not, we would have been affected. I am confident that someday, they will be ready to take over the day-to-day leadership of the business.
The reason why I am writing to you is not about my children but about me. I feel I may be the problem. For one, I am not entirely sure if I am ready to exit. I can sense from them that they are no longer as excited every time I raise the matter related to retirement. It is as if they are no longer interested to dwell on the topic. More than 10 years ago, I shared my thoughts about retiring at 60, but they prevailed upon me as the global financial crisis hit many industries, including our markets. My children, especially Jr, told me that it was too early to retire and they felt that they needed guidance and oversight. So I told them we should start working out a succession plan for the next five years. We all agreed, but as we closed in on my 65th birthday, the work doubled. The organization was in an expansion mode and we were neck deep working on so many deals. Retirement was no longer an option. One day, my wife raised it to me privately, echoing the sentiments of the children. I reacted negatively and that was the last time the matter was ever discussed. At present, my children are just working, but I can sense their disappointment. They are less enthusiastic and there is a feeling of muted resistance. I don’t understand anymore — is their behavior a result of my reneging on my promise to step down?
At my age now, I feel I can still contribute. Is there such a thing as retirement for founders like me? I have been working as an employee and business owner for more than 50 years and, personally, I still have a lot of energy left. I cannot imagine myself not doing anything every day. My father passed away a few years after retiring as a government employee. He cautioned me not to stop working. How can I exit? How can I be the “founder George” in your article where he deliberately prepared his children? Are there steps that I need to follow? I still want to take the lead, but I also want to empower my children to make major decisions. Is it possible to do both — to step back but still be involved without overriding their decision? What if they commit major mistakes?
Can you offer some advice on how to structure a power-sharing model in the family business? Is this dilemma common among founders or is this just me? I have asked other consultants, but they seem to provide me with general answers. I want specific responses and I feel those with real experience like yourself can shed some light on my situation.”
