How much is protecting your legacy worth to you? No, really, how much? Can you even put a price-tag on one’s legacy? It’s actually more a peace of mind question than a financial one. So, let me rephrase the question. How much is your peace of mind worth to you knowing your legacy is protected? Have you taken the necessary action to protect your legacy and business that you’ve been busting your butt over for years and even decades? Here’s another question for you. Should something unexpectedly happen to you where you could no longer run the business, do you have a #2 in command identified, prepared, and ready to step in at a moment’s notice to take charge on your behalf? If your answer is, “No,” why not? If “Yes,” do you know for sure that they are the right person for the job? One last question (I know, “Enough with the questions already!”). What could your business do if there were two of you? How much greater could the results be? What would be the impact on EBITAD if you could replicate yourself? Having a #2 in command who can step in and run the business, not a division, the entire business, is not just about you the owner – it’s about every single employee who works for you. A lot of families depend on your business. Not having a #2 in command (the right #2 in command), identified, and prepared to take over for you should something unexpectedly happen to you, can be summed up in one word: selfish! No sugar-coating this issue because it’s too important; too important to you, your family, and a lot of families who depend and trust you to take care of the business… for everyone’s sake.
In case you’re thinking, “Nothing’s going to happen to me,” “I have plenty of time to get things in order,” consider the following:
Name: Position Company:
1. Donald Terner President Bridge Housing Corp.
2. Robert Donovan President & CEO Abb Inc.
3. Claudio Elia Chairman & CEO Air & Water Technologies Corp.
4. Stuart Tholan President Bechtel
5. John Scoville Chairman Harza Engineering Company
6. Leonard Pieroni Chairman & CEO Parsons Corp.
7. Barry Conrad Chairman & CEO Barrington Group
8. Paul Cushman, Chairman & CEO Riggs International Banking Corp.
9. Walter Murphy Senior VP AT&T Submarine Systems, Inc.
10. Robert Whittaker Chairman & CEO Foster Wheeler Energy International
11. Frank Maier President Ensearch International Ltd.
12. David Ford President & CEO Interguard Corp. of Guardian International
Do you recognize any of these names? These are the CEO’s who were on the plane with Secretary of Commerce Ron Brown of the Clinton administration, on an official trade mission when the plane crashed on April 3, 1996. There were no survivors. You have wonder if they had their #2 in command, identified, and prepared to immediately step in and take over their company.
Here’s another example of how life can blindside you:
Company: CEO: Cause of Death:
1. Wendy’s 1999 Gordon Tetrer Heart attack
2. McDonald’s 2004 Jim Cantalupo Heart Attack
3. Circuit City 2005 Multiple Sr. Leaders Plane crash
4. Sara lee 2010 Brenda Barnes Stroke
One last attempt to convince you to have a #2 in command:
1. When the owner suddenly becomes disabled or dies, and their ill-prepared spouse or children take over the business, the likely result is bankruptcy or sell-off. -Entrepreneur Magazine
2. 60-70% of all family businesses that lose a founder to retirement or death are sold or liquidated. -Inc. Magazine
3. 40% (64 million) of the U.S. workforce will be poised for retirement by 2020. The resulting talent gap will directly impact the future sustainability of every enterprise. -The Wall Street Journal
Key issues to contemplate:
1. If your planned successor is one of your children, it’s not about “Who’s Next,” it’s about “Who’s Best.”
ïï¿½ï¿½ How do you know who among your children is best for the job?
2. Even your successor will need a #2 in command.
3. If your #2 in command is your:
ïï¿½ï¿½ CFO: do they have the operational expertise to succeed?
ïï¿½ï¿½ COO: do they have the financial expertise to succeed?
ïï¿½ï¿½ Any other position in your company: my CFO and COO comments apply to all of them.
This issue is deeply personal to me. It’s why I’m taking the time to write this article and a few follow-up articles to get you thinking about this critical business imperative. My friend Mike died at the age of 43. He was out riding his Harley Davidson Switchback touring bike (with helmet) and was thrown. He was in a coma for 4-months and eventually died, leaving a wife and four young children all under the age of twelve. Mike’s plan was to legacy his business to his children. Mike didn’t have a #2 in command because he was too busy running his 28-chain QSR. He was too busy to identify and develop his #2 in command. Not unlike most of us, right? Mike’s CFO stepped in to run the business but failed miserably since she didn’t possess the operational expertise. The COO was next in line and his authoritarian leadership style which was in sharp contrast to Mike’s “People first” leadership style, resulted in an employee revolt. At the advice of the bankers and Mike’s board of advisors, Mike’s business was sold for $.57 on the dollar.
The bottom-line: Mike’s story doesn’t have to be your story!
For more information on this topic, visit http://www.2incommand.com