As an executive coach for the past 15 years, I have worked closely with dozens of CEOs and their leadership teams. All of the executives with whom I work face similar issues. Send your questions to JD@johndame.com.
Q: My family owns and operates several companies in the area. My father is now in his 70s and wants to slow down as CEO. It is time to think about succession. I’ve been running the company for the past two years. The issue is that I am the younger of two sons, and my older brother is sensitive about the fact that I am acting as the CEO. We work well together, and I do not want to hurt his feelings. I also do not want my dad to see us in a disagreement over leadership of the company. What should I do?
A: In family-owned businesses, this is a problem that shows up regularly. There are many times when family members are not equally suited to lead. Since you have been acting as CEO for a while and operating successfully, I believe you should continue as CEO.
I would have a discussion with your older brother regarding what he really loves to do in the company (from our discussion, it is not running day-to-day operations) and place him in charge of what he does best. He will flourish if he is doing what he loves to do.
Finally, there is a difference between ownership and role function. You and he can share the ownership equally. It is always best to clearly define the operating roles and function so that it is clear to both of you and your employees.
Q: I am 58 years old and have owned my companies for more than 30 years. Recently, one of my companies lost a couple of key people and about 50 percent of our business due to some client changes. I’ve decided to shut down that company completely. Additionally, my core business has shown revenue and profit decline due to one key client moving to the West Coast and taking their business with them. I feel tired and ready to move on. Should I think about selling my remaining business or try to rebuild?
A: It is very difficult shutting down a company that has been part of your business for more than 30 years. Couple that with an underperforming core business, and I can understand why you might feel tired and want to explore exiting.
Part of the emotion you need to deal with is the feeling and/or fear of failure. You need to focus 100 percent on making your core business a success. If that business gets into better shape, your options increase.
In addition to working on improving the core business, I would reach out and get a valuation done for your remaining operations. It would give you a starting point to see if you want to sell.
The bottom line is that I would give the sale option some time to ferment and work on improving your core operation.
And, by the way, you made a good decision to shut down the underperforming secondary business. That’s not failure; it’s a good business decision.
John Dame is a CEO coach, executive team consultant and leadership strategist based in Susquehanna Township, Pennsylvania. Visit his website at: www.johndame.com.