There’s a big difference between wanting to own a company and wanting to run a company, and knowing where your successor stands on this point is critical.
Owning a company can be exciting. There’s a certain feeling of power in being able to say you own a company. Not only does it give a person added stature by being the owner of a company, but in many cases, creates a kind of “celebrity” status. The idea of owning a company can be heady stuff.
As owner, you’ve got full authority and are the final decision maker. When you own your own business, you’re your own boss – there’s no one to answer to, no one to ask for time off, and no one to ask for a raise. As owner, you’re in complete control.
These are the very reasons that many people dream of owning their own company. Or more accurately, it’s that perception of what being an owner is that causes people to want to be one.
But anyone who has owned and run a business knows that the realities of owning and running a business are a bit different than those noted above. Franchisors have long recognized this. Rarely will a franchisor sell a franchise to someone who isn’t going to be running the business (hence the term, “owner-operator”). Only after a franchisee demonstrates their ability to successfully run the business will a franchisor sell someone additional franchises.
Running a business is hard work. Running a business requires self-discipline and dedication. It requires you to do what needs to be done when it needs to be done, whether you’re in the mood or not. Running a business requires sacrifice. It can require you to forego personal plans and family time for the sake of the business.
Running a business requires passion. An owner of a business who is apathetic will accept mediocre performance. And attitude – whether good or bad – is contagious. Running a business requires decisions to be made – sometimes hard decisions. Important decisions will need to be made that not only impact the profitability of the company, but will affect the livelihoods of the people who work for the company. Those decisions often weigh heavily on an owner.
Because there’s such a big difference between wanting to own a company and wanting to run a company, it is essential to determine where your successor stands on this point.
The challenge, of course, is that talk is cheap. Simply asking him or her if they want to own and run the company will almost always yield the answer you hope to hear. The only true means of determining your successor’s desire and ability to run the company is to have them run it.
It’s not that you hand over the keys and step away, but rather you should start giving him or her increasingly greater authority and responsibility. This will allow you to observe how well they’re prepared to take over, while still allowing you to prevent any major missteps and make course corrections for mistakes. This mentoring, in conjunction with leadership development and improved strategic thinking, will ensure that they are prepared to own the business, prepared to run the business, and prepared to successfully lead it into the future.
A good way to accelerate the process of grooming a successor is to have an objective assessment done of their leadership skills, their strategic thinking, and their decision making.
If you’d like help in assessing and/or preparing your successor, please contact us.