It’s August 21, 2008. The setting is Beijing National Stadium—the 2008 Olympics.
Nearly 100,000 people cheer as the U.S. Men’s 4 x 100-meter relay team walk out on to the track. Before long, the gun blasts and the runners take off. Everything starts as it should for the dominant American team.
But, then, the worst happens.
Tyson Gay reaches back to take the baton from Darvis Patton, but nothing is there. In what should have been a textbook handoff, the aluminum falls precipitously to the track.
Race over. The U.S. is going home.…
This is what it looks like to drop the baton in transition—literally. Weeks, months, and years of preparation all come crashing down in a single moment.
As specialists in family business succession, we’ve seen it too many times. Even though owners are ready to pass the baton and successors are eager to receive it, lack of preparation leads to a fumbled transition.
And, 70% of the time, that fumble ends up knocking the business out of the race.
This is why family business owners need to communicate with their successors about the future and prepare for the role—specifically around how the former expects the latter to perform in their new role. When the transition is made, performance management conversations are critical to ensuring that the successor has the support and guidance needed to perform at their best for the long-term benefit of the company.
Performance Management Tips for a Smooth Succession
- Owners must balance space and support by working their way out of leadership without leaving the new leader hanging;
- Expectations must be defined by way of concrete benchmarks so that successors can be objectively measured and held accountable for their performance; and
- Outgoing leaders should encourage innovation as a necessary element in the company’s ongoing success, yet do so without undermining family tradition.
Before I forget, if you’re not sure about the key conversations in a succession, this book can help you get started.