How to Turn Over the Keys to Your Company, Gracefully
Frigibar Industries was a small business with a 39-year track record of success when its founder died shortly after being diagnosed with Lou Gehrig’s disease. In the aftermath of his passing, the founder’s daughter, Shuly Oletzky, was left not only grieving her father’s death, but also struggling to hold together the company.
Oletzky worked full-time elsewhere and lived 80 miles away, but she knew if she didn’t step in the employees who depended on Frigibar for their incomes would be unemployed.
“His death didn’t mean it was all over,” Oletzky told a room of executives at the recent Small Giants Community annual summit. “It was just the beginning for me and I was terrified. I hadn’t had the opportunity to learn everything from him you would hope to.”
Her father had not left many notes on the important clients or contracts; there were no operating manuals, or even a list of who the most important contacts were. It took 18 months for Oletzky to piece together the basics of the business’s operations. She held a ring of keys up to the audience. “I still haven’t figured out what these keys are for,” she said, pausing to laugh.
“The experience was overwhelming and avoidable,” says Oletzky. Determined not to watch other business owners go through the same challenges, she launched a website, www.successionproof.com, to share tips and ideas for having the difficult conversations that make successful transitions possible.
“You’re not planning for your death. You’re planning for the living that will succeed you,” she told the audience.
Oletzky’s advice is vital for any small business owner to consider. And while her focus is on the unexpected successions caused by the death of a company’s owner, the wisdom applies for any transition process, in companies of all sizes.
Four Steps to Make a Succession Plan
“Learn from our mistakes,” Oletzky invited the audience as she encouraged them to take the four important steps her father resisted taking, even at the risk of losing the business he’d built.
Have the conversation.
“Ever have an awkward conversation, say about sex?,” Oletzky asked. “Most people like sex. Not so much death.” She tried to have the conversation with her father but he wouldn’t respond to her direct questions about the future of the business. A friend later told her that her father hoped she would take over the business but didn’t want to pressure her.
Make a plan and put it in writing.
A written plan outlines the business owner’s intentions, and creates legal documentation of what the future should hold. Attorneys, accountants, and financial advisors should be consulted in this process. Oletzky’s website provides a list of important questions to consider.
Teach and foster.
While the plan puts a framework in place, nothing is more helpful than hands-on-experience and detailed documentation. Oletzky recommends creating a “lifeline booklet” containing the company’s most important information: corporate documents, wills, lists of vendors, friends of the business, and other important contacts.
“Put it in a place someone can find it if you need it,” says Oletzky, and make introductions for successors to important people on the list.
In small businesses where much of the company’s processes are stored in the mind of one or two leaders, Oletzky also recommends making detailed procedure manuals so others are able to step in and help.
“Your reputation will not die with you, in fact how people remember you will make it stronger,” says Oletzky, who still hears stories and compliments about her father from the company’s employees, vendors and colleagues. “The way you leave things will either be an asset or detriment to the people who follow in your footsteps.”
No one wants to plan for an unexpected transition to new leadership, says Oletzky. But the lack of a plan can be a business’s downfall. Six years after her father’s death, Oletzky is leading the company he founded and attracting national attention for both their products and her advocacy on the topic of succession planning. Frigibar has survived, and Oletzky wants other companies to do the same.
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