Family Business Succession Dr. Leon Danco Style - with a Twist.
To cut to the chase about Dr. Danco, his consulting fee was $20,000 per day! Not a bad wage. He has been widely recognized as the founding father of the field of family business consulting. In the early ‘90s, Arthur Andersen and Dr. Danco created a relationship through which we were to become his successor. I was one of those who worked under him in that practice.
Dr. Danco had figured out the key steps family business owners and the other stakeholders need to take. That is, if your objective is to create the highest chance for your business to survive and thrive through the transition from generation to generation. His flagship book, Beyond Survival, has been described by Corp! magazine as “the old testament of the family business field”. It should be considered required reading.
Dr. Danco had figured out the key steps family business owners and the other stakeholders need to take. That is, if your objective is to create the highest chance for your business to survive and thrive through the transition from generation to generation.
Family businesses are special. You have the same challenges as other businesses, but an additional layer – a whole other set of dynamics – that outsiders don’t understand. You have nobody to talk to. Not about the things that really keep you up at night. Who can understand the whatever you are feeling about “the kid”. Or the brother. Or that you are getting older and need turn loose of control but can’t quite get there. There is a lot at work in any significant family businesses. There almost has to be.
The best way to understand is to look at where you come from. A few things I learned from Dr. D. are set forth below. I couldn’t tell you how many times I have been through this and then heard “the kid” pipe up and say “that’s my dad”!
Secretive - In the early days he can’t talk about how bad it is or they’ll shut him down.
Suspicious - You ask him what time it is. He replies, why do you need to know?
Powerful – He runs the show. Always has.
Unreviewed – He doesn’t like too much input, and nobody is looking over his shoulder.
Harassed – Business gets bigger, harder, more complicated. Times change.
Getting older – It’s not as much fun as it used to be.
How to survive and thrive is both not complicated and very complicated at the same time. What you need to do with the company, the roles, the structures, can be determined, communicated, understood, and acted upon. With the right help, you can create the game plan. That is what I call the “goal line” part of the equation.
After my time with Dr. Danco, I began to understand more fully one other simple reality. Human beings have an awfully difficult time getting out of their own way! We can give you a program to follow on the goal line. But, how do we help you get comfortable with actually passing the torch? How do we get the kid to take the bull by the horns? How do we clear away the fog and crystallize the vision for the future? Get all of the key managers behind that vision and excited about creating value? And, about 50 other things.
There is a formula. Concrete steps you can take to line your business and family up for survive and thrive. What I call the “twist” cuts much deeper. It’s around the conversation you are having with yourself. And, that applies to all members of your family business. Those conversations have been developed over periods of many years. Many of them no longer apply, but still run the show. Many of them are negative and counterproductive. The kid wants certain information. Dad’s not giving much. Doesn’t really know how. Friction among siblings who are running on negative programming and faulty information. The twist, in my world, is about going inside. Inside of you and yours. Once we start asking questions that haven’t been asked, and discovering realities that haven been discovered, the rest is just details.
Recommendation #1: Get really clear, and real, about what you want. Not what somebody else has told you. Not what seems to be the immediate path ahead. Rather, what you truly want your life to be now.
Recommendation #2: What are you willing to do to create that? Not next year – starting now.
Recommendation #3: Get your family in a room and listen. Call it a family meeting. A conversation with purpose. Discuss openly and clearly what each family member is passionate about, individually and collectively. Why don’t you have it already?
That’s just a start, but it can be a very powerful beginning of your second half. And, that of your loved ones - your family and your business!
If you are reading this as an advisor or other provider, consider where it puts you if you can help bring this about!