Succession Planning in Business is a crucial topic, your legacy should live on…
In this episode I am interviewing best selling author and Ex media CEO Nelly Shein, the book she wrote on succession planning in business, which was a best seller.
Succession Planning in Business is a crucial topic, your legacy should live on… In this podcast episode I am interviewing best selling author and Ex media CEO Nelly Shein, the book she wrote on succession planning in business, which was a best seller.
We discuss how to plan for succession in your business, why it’s important and how to make sure your legacy lives on. Succession planning is an essential part of any business, yet so many businesses don’t have a plan in place. This can be a disaster if something happens to the owner or key members of the team. Succession planning ensures that your business can continue to run smoothly even if there are changes in leadership. It’s not just about what will happen when you retire or die, but also about what would happen if you were suddenly unable to work due to illness or injury. If you don’t have a succession plan in place, then your business is at risk of being sold off or going under if something happens to you. Succession planning is therefore a vital part of ensuring the long-term success of your business. Thanks for listening!
So that’s quite an exciting topic it is one of your 25 books, I believe Gunilla?
Gunilla Shein
Yes, actually it is. And I actually wrote that book together with a solicitor and it grew from the original it was going to be something like 90 pages. When we were finished, it was 300 pages and we thought it wouldn’t happen, as publishers suggested that is was maybe not to happen, because it was triple the cost, but it was a best seller. So I think he was happy in the end.
For me, there was a lot to go through there. We went through the tax situation, everything and the big picture, we went through the people you have employed the everything with your clients, we went through all situations and you know that you need to plan well ahead. And something that really surprised me.
If I look at UK, United States, if I look at Australia, New Zealand, Sweden, a statistic about 75%, in any of these communities, a big lesson United States, other business owners are actually looking to retire within a 10 year period! Some even shorter. Some people even looking to retire in one year’s time, and they have no idea how are they going to do that and what they’re going to do. And they sort of just pop their head into the sand and hope that they will come a solution, right.
But there is quite a lot involved to have a successful planning for succession planning in place. It takes some time to get it on board. But yes, I wrote that book. And it’s all very well, so maybe time for another book.
Nathaniel Schooler
Sounds like quite a good idea. I mean, I speak from personal experience. When I when I, you know, I know about family business, as I worked for my Dad in our family business, he actually worked for his Dad and his family business.
It depends on the type of businesses it is, and also. Is that business about the individual themselves? Or is it about a bigger purpose, you know, and, and I think it really just depends on that individual. And whether that individual wants that new generation to take the reins or not, I mean, I think that’s, that’s, that’s actually a vital piece of information, you know, in fits into the points which you’ve kindly given me around the life circumstances.
And I mean, I think, you know, when, when people in life, if they’re ready to, to let go of those reins, you know, it will be brilliant, and they can, they can actually help with the transition of of that new generation, but potentially, they may not want to let go of the reins. And I think that’s, that’s a major consideration, really.
Gunilla Shein
You’re absolutely right about that. But it’s also this idea that most people we go wrong to think that we will live forever. So with the life circumstances, you know, if something happens tomorrow, what happens to the business? How will it affect the business?
And most people say:-
Oh, don’t talk about that. I don’t want to talk about bad things like this.
Yeah, if you are a business owner, and you’re responsible for hundreds of people who are working for you, I think you’re always ow that to them and to your family to sort something out. So it’s not that you can be in charge all the time, because he can become sick or whatever can happens to you. So you need to have, again, a bit of time ahead of you when you’re going to do this.
Nathaniel Schooler
Yeah, yeah, very much. So. And I mean, I think having a, having a clear strategy around that is very important, because we’re not, we’re not here for an infinite amount of time, you know, and if, if we’re planning on retiring, saying 5 years or 10 years from from whichever business we’re in, then we need to be thinking, you know, do we want to sell that business?
Or do we want to actually help with the transition into the next stage of, of, you know, the next the next generation of our family, or it may even skip a generation in terms of some, some businesses, you know, certainly within the brewing industry that I know of, I mean, that’s, that’s another business that I know a little bit about, because that was my mother’s side of the family.
They had a brewing a brewing business, very big brewery, that was I think it was eighth largest in the, in the UK when it was in its in its prime, you know, and they clearly had a succession planning situation then, but but then things changed and everything changed. And then they sold the pubs and, you know, so I think strategy is very important. But obviously, we got to be aware that the market can change the, the family, obviously, the commitments that we have, as well, you know,
Gunilla Shein
Yeah, absolutely right. And the market I mean, look at the market, how it how it is today, for instance, people who have family business that had new people enter the empire, I mean, that has scrambling to almost nothing. So, really the industry, you’re in you need to take that thing to consideration as well. And together with your children, your family, do they want to take over the business.
Sometimes, as you say, it is that the older generation really wanted younger, younger generation to be part but they don’t want to do that they want or travelling to something else? And sometimes it’s the opposite. Yeah, so those ideas and strategies and where you want to be takes times to form
Nathaniel Schooler
But also I think if we, if we kind of look at the look at the bigger picture here, you know, if that business, for example, does not interest those children or grandchildren, yeah, then then, you know, there needs to be some provision for the future.
And that provision could be, I’m going to help, I’m going to sell the business, and then I’m going to help you to set up your own business. And I’m going to use my knowledge, my connections, my money, and I’m going to invest that into a new business, a brand new business. So we’re going to, we’re going to run a start-up together, or we’re going to buy an existing business, and then we’re going to help I’m going to help you to transition into that business.
You know, and I think taking the time to understand your your relatives. And what makes them tick is is really, really important. I mean, my godfather he he he’s an investor, he invests in property. And he also invests in, in distilleries, yeah, so, and anything really connected to those to those kind of two different things.
But if is if one of his five children turned round and said, well, look, Daddy, I’m interested in in this, you know, business skills don’t change that much. At the end of the day, it’s just a different industry. It’s like you need to cash flows, you need your marketing plan, you need your brand plan, and you need your, you know, all the other bits and pieces, right. Nothing really, is that different? It’s just a different market.
Gunilla Shein
Yeah, absolutely. I think as well, you know, when you have been in a family that has had businesses. I’ve been myself coming from that situation like you. And, you know, when I grew up because of like, the question like, what are you going to become, when you are an adult? It was, what kind of business are you going to run when you’re an adult, and you can understand the disappointment in my parents and everybody when I turn around and become employed in the largest daily paper in Scandinavia
Employed, how can you become employed, really you know, that that wasn’t really the thing if, you know. It took me a week before I dared to say anything. But anyway, so I think that when you are when you have grown up in that kind of family on both sides.
You have also that mindset about risks and everything in your life, it affects absolutely everything later down the track, I have sort of come into the family situation of having my own business as well.
But I didn’t have it from the beginning. But I what I was going to say is that, you know, if it is a larger business, there are so many complex factors and there are so many people involved. You have the accountants you have the solicitors, you have their marketing people, the HR people, and sometimes, you know, you have arguments and fights in a family about how you got to solve that.
Sometimes you need to bring in even a counsellor because everybody needs to be happy when this is done. So it’s really important. I think, for first and foremost, for the older generation, that what are their goals?
What do they want to have out of it?
Because the truth is that they may have 20 years or more average to leave, or even less, so they need to get what they really are aiming for. And also, you know, it might be their reward for 40 years of work.
That now is going to come out, so and as well, for the younger generation, you know, what, what they really want to take it over. But in some cases, the company is successful, they’ve taken the opportunity to become publicly listed. I’ve seen too many occasions. So there are all sorts of ways that you can go about it, you can merge with another business, and they may be take over the leadership. So there are all sorts of scenarios that can come to play.
But whatever you decide, you need to have the horizon over three years, in front of you front of you.
Nathaniel Schooler
So, so sorry, to stop you there. There is a lot of information that you’ve just sort of shared there. But I think so let’s, let’s step back a little bit and look down upon the business from a strategic level and a knowledge gap, okay, because there are going to be, there are going to be some massive knowledge gaps within. Dependent upon how old those those children or grandchildren are.
So for example, there may be an 18 year old young adult who, who is leaving school who, who needs to go and learn some more skills before he or she joins that business. Or there may be some older children or Grandchildren who, who have left University and actually got some really good skills, really good ideas to bring into that business.
But they also have a gap between, you know, a skill gap and, and that goes for the people who are maybe perhaps a bit older, in their, in their 30s, or even 40s, for example, but they also have a skill gap.
And they have a relationship gap. Because if they’ve never been within the business, and then they are brought into the business from the outside, there is a kind of resentment also from from employees. Ahh look. “He’s come in, he’s a family member.”
And there’s this kind of jealousy which can, which can actually harm the business a great deal, actually, and being being the boss’s son, or the boss’s daughter, or whatever, is a very difficult position to be.
I know many people who are in this position, and it’s, it’s very, very difficult for them. But it’s also difficult for the staff because they don’t know what they can tell them. They don’t know what they can’t tell them. And they don’t know if they’re wet behind the ears, which is a phrase that we use, so they’re bit thick, or they don’t know anything about the business. And there are these problems that actually come from that, really.
I think it all goes back to what sort of a legacy does the does does the owner of the business want to leave? That’s the first that’s the first thing does that person have a personal brand?
Which, you know, everyone has one, whether whether they like it or not, and if that personal brand is very visible on the outside of the business. So then how do you do you do you merge that personal brand with the, with the brand of the new school if you like, and then build those two together with with with a fresh idea of how the business is going to, you know, move into the next quarter and into the next 5 years? 10 years, 20 years for longevity?
When it comes when it comes to the brand or the individual I mean my grandfather he was he was a great great leader in in business in the states within his within his niche and and on his on his gravestone he was called Nathan actually on his gravestone. They said that he was charitable, devout, energetic, and he was a civic leader, beloved husband and father. Right. So so that’s what those are the words that were on his gravestone.
So to step back a little bit, we’re all going to die, right? We’re all going to die, okay, it’s inevitable. And if we can, if we can make some kind of thought process around where we’re heading, and how we want to be looked at when we do die, what do we want to leave behind?
What legacy do we want to leave behind?
And I think that, for me, is really important in my mind. It’s like, you know, my grandfather donated over a million dollars to charity in his in his working career. And he did a lot for the local community. They had lots of apprentices within Long Island in New York, there is a funny story, I can’t talk about it.
But anyone wants to know it, you can always ask me, I got a great story about like, the mob, it’s a long story….
So anyway, there were there were lots of apprenticeship. apprentices that were that were hired to, to learn would work, and they had all this equipment and, you know, the family business bought all this equipment. And there was a little bit of a corruption problem with with the government. But that was kind of fixed rather quickly, which is, which is quite a funny story, actually.
But, you know, it goes back in goes back to what do you want to leave behind? What do you want people to think about you? And how do you want them to think about you, when you’ve when you’ve passed over to the other side?
I think it’s, I think it’s really, really important. What do you need to do. Now, though, Gunilla, you’ve mentioned the received value reward for all your hard work. And, you know, do you have the horizon of three years, right? So what what do you think needs to happen in that, in that in those three years,
Gunilla Shein
I mean, in those three years, you really need to both have talks with, with your accountant, with your solicitor, and of course, first of all, to everybody who are involved and decide, and the actual owner. What do they really want to do, once you know that what you want to do, then you just need to start to tick off the list.
But the problem is often what do you want to do, because you have maybe to take into consideration other family members, maybe that person has a brother who is also and is a passive owner or something. So they are many things that needs to be looked at. But first of all, your accountant, you need to talk to your solicitor, you need also to go through your staff and key personnel and your clients. Because you need to take all your boxes, everything where you’re vulnerable, because taking over a business from the other generation is a very, very vulnerable time in a businesses life.
And you can look at big businesses you can look at Steve Jobs was everybody was really worried what is going to happen, when he was not around, everyone was really worried with IKEA. What is going to happen now the founder is not there, will the three sons manage, of course, they would manage because they’ve been brought up the whole life to take over.
So you need to have your to do list. And I have that in my books, you know, long to do list that you need to tick off really about what you want to do, and how you’re going to handle things, and good will and all of those systems that you have in place as well.
So there are a lot of things that you need to take into consideration. And I can seen hit for half an hour and yes, talk about the different things, but I will have it up on my web page later as well, what you need to do .
Of course, then people are always welcome to talk to me as well about what they need to do. Because that is the thing when you do the succession planning, there’s so many people involved. But this seems to be no one was really keeping everything together.
Because there’s continents doing his part, the solicitor his part, that it person, his part, but you really need to see that everything is aligned so that everything is happening when it’s supposed to be happening. And that is, for instance, for I’m doing myself to be a project leader, keep all of these people and ensuring they are working against the timeline that is decided,
Nathaniel Schooler
I sort of look at it from a brand point of view. And yes, each one of those, each one of those businesses is going to have a brand and each one of those family members is going to have a brand. And I think the great thing is, is actually seeing all of those come together towards a common goal of continuity of that business is actually very exciting, really, succession planning, very, very exciting.
But, you know, in essence, it all depends on the enthusiasm, of those family members for that new business or old business depending on, you know, how it’s progressing. And what’s going to happen in the next year, two years, five years down the line really. So I think it’s, I think it’s certainly a very exciting time. And, you know, it’s a, it’s something that we can certainly help with, I believe together because, you know, you obviously will help manage all of that process.
Together, we can kind of pull together some some assistance for the business owners, right?
Gunilla Shein
Yes, yes, indeed. Okay. Great.
Nathaniel Schooler
Well, it’s, it’s been absolutely lovely talking with you. And yeah, it’s, it’s, it’s been, it’s been a real joy, you know, and I think with all your experience, or with all your business books that you’ve written, and your publishing experience, and your counselling experience, I think, I think that actually, those those skills that you have, are ideal really, to help with this transition. And, you know, I think it’s, it’s, it’s a very exciting time right now, for sure.
Gunilla Shein
Thank you so much. And thank you for having me. And it’s really nice to be in your company again, you’re always so inspirational. I have so much joy and wisdom to share. So thank you for doing that. And I want to hear those stories that you just briefly mentioned.
Nathaniel Schooler
I’ll tell you. But I’m gonna have to turn off the recorder, can’t record that I will get in trouble.
Gunilla Shein
Yeah thank you Nathaniel.
Nathaniel Schooler
Thank you very much Gunilla. And I look forward to look forward to speaking more about this about about business and marketing and all these great subjects, you know, that the business people actually really need to learn more about, you know, including me, I mean, I think the problem exists is when people actually stop learning! That the or they think that they they need they don’t need to learn any-more. And that’s the that’s the major problem, I think, within within business and life these days, you know,
Gunilla Shein
Yeah, I agree, more another time!