As a family business consultant, I have guided dozens of family businesses through the succession process.
It can be a difficult and sometimes emotionally painful process, but, if done right, it can satisfy the wishes of all parties, successfully prepare the company for future challenges, and most importantly, keep the company together. the family. The “family” component of the family business is one that I emphasize throughout the process. A successful family business succession should benefit both the business and the family.
I recently concluded a three year succession planning engagement with LSI Cos. Inc., a Fort Myers-based full-service real estate brokerage and development firm. By working with founder Randy Thibault and his son, CEO Justin Thibault, as well as other key company managers and stakeholders, we were able to successfully guide the leadership transition from Randy to Justin and keep the family happy in the future. process. Randy and Justin were willing participants and incredible partners throughout the journey, but even a successful succession is rarely easy. I sat down with Randy and Justin to ask them about their experience and what advice they would give to other family business owners preparing for succession. Edited excerpts:
What was the most frustrating part of the probate process?
Horny: Let go of my identity. The emotions that arose when discussing the terms of the sale and the transition to Justin.
Justin: I think about trying to separate how I would normally handle a business problem and how my father would handle it. We have two very different styles, but we are similar in our values and goals.
What was one of the most rewarding parts of this process?
I learned that this kind of effort, like selling a large quantity, has a natural flow and needs to be organic. It takes time and patience. Randy Thibault, LSI Cos.
Horny: Get acknowledgment from Justin that he wanted to continue the business. Seeing him succeed and knowing how great he will be in his new role.
Justin: Knowing that my dad had the confidence in me to continue what he started.
What do you regret, if anything, or wish you had a mulligan in the probate process?
Horny: I don’t regret much! I am so glad I had professional advice from a family business advisor and industry business consultant to help ease difficult conversations and put things into perspective. I learned that this kind of effort, like selling a large quantity, has a natural flow and needs to be organic. It takes time and patience.
Justin: If I had to do it over again, I would spend less time on the minutiae and focus more on the big picture. It would make it a less “commercial” negotiation and I would realize sooner that I was dealing with a familiar “partner”. I would keep in mind that this is my dad, and this succession is an opportunity, not an obligation.
Denise Federer.
What are one or two decisions you made in the probate process that you would encourage others to make in the same situation?
Horny: One, make sure you don’t do it on your own. Use the professional guidance that is available to you. Two, know your parameters and what motivates you: is it control? Money? Also, make sure you ask yourself the hard questions and understand what the outcome is that you really want it to be.
Justin: Be sure to keep your relationship with your family at the forefront. If you think the process is harming your family, STOP. From the perspective of an adult child, know that what you are buying is a legacy: the hard work, blood, sweat, and tears of your parents. Always remember that.
The discussion about money can be sensitive between family members. How did you handle the compensation side of this probate process?
Horny: I didn’t look at him as if he had sold the business. What I did was offer Justin the opportunity to continue what I had started. I had to ask myself what he really wanted, and that’s when the lightbulb went off. I realized that it was about much more than the money: that he was ready for a life outside of my business. After that, things just fell into place. I wish I had done it three years earlier!
Justin: It came together in bits and pieces. It ended up (being) positive and fun. At first I approached it as a business situation, but then I was able to step back and put it all in perspective.
Randy and Justin’s story is well known in family business succession planning. It can take a while to work out the details and gain perspective, but when all parties do it, the process becomes exciting and successful. When done right, the process should take years, not weeks or months. And it should include clear goals that continue after the succession. However, the most important aspect of family business succession planning is honest and intentional communication and self-reflection. As you can see from my conversation with the Thibaults, when family members are honest with themselves and with each other, the result is often positive for everyone.
