Crossing the line of confidence

April 01, 2012

Thom Penmaen and his family have commenced their transition journey. They have moved through The Information Stage and now understand the objectives and components of an integrated transition plan. They know they must first develop a “we focus” and appreciate that their fears must be identified and managed. They also recognize the need to plan ahead for the hurdles and threats they will encounter along the way. They are ready for the next step where they can define their bigger future and gain the confidence to initiate action.

To bring Thom and his family across The Line of Confidence, we first explored what the business meant to Thom. Using a tool called The SuccessChart™, we identified Thom's purpose and passion for Penmaenship Tool and Die and inventoried key building blocks for the continuity of the business. It was evident that Thom envisioned a bigger future and could see many opportunities ahead. It also became clear that Thom had not actively involved his family in his plans for the future but rather expected that they would not only understand his intentions but fully embrace his goals by osmosis!

Line of Confidence

So our confidential Discovery Questionnaire was distributed to gather input from the key “stakeholders” – family members and those managers who have insight into the current strengths and weaknesses of the organization.

This was followed by a facilitated session with family members to share Thom's vision and principles for the future, see who is onside with the proposed direction, and identify who is interested in participating in the building of that future.

With participation by all and many more facts on the table, the family was able to identify a unified direction for the next stage of their family business lifecycle. Together they developed a game plan to move forward in a way that addressed their specific roadblocks. They were amazed that five strategies could address all fifteen potential hurdles and threats. They now had the confidence to proceed with the plan!

The fact that Thom was already 65 years old made it imperative that the family quickly adopt this “we focus” to running the business and then implement more direct mentoring and personal development strategies as soon as possible.

Moving through the Initiation Stage

The Penmaens are now in the process of initiating the action items that will enable the transition to their bigger future. These include:

  • Mapping out the tactics needed to take the business forward with or without Thom at the helm.
  • Identifying and mentoring the next generation leadership to ensure they have the skill sets to drive the growth plan.
  • Strategies for wealth protection and financial independence for Thom and Sophie.
  • Clarity around an ownership structure that goes beyond their lifetime and a Family Participation Plan that communicates the process for entering and exiting ownership.
  • A structured communication vehicle to support and develop next generation governance.

Moving to the Implementation Stage

At this point Thom and his family are fully committed to building the business into a legacy for the family, ensuring the business will be run more formally, and enabling greater communication within each of the three main focus areas: the family area, the ownership area and the day-to-day operations.

But implementation of their transition plan only occurs when the governance (the leadership and decision-making) moves from Thom to the next generation.

Enabling effective governance requires not only a qualified driver, but also a well-equipped communication vehicle.

Our Communication Vehicle is a system that integrates the policies, plans and “places to talk” that are essential to meeting the objectives of the three key areas of the family business.

Communication Vehicle

It encompasses the two major factors in effective governance – good decision-making and implementation – and is the focus of the Penmaens' attention for the coming months.

If you would like to learn more about moving across the Line of Confidence to take the important steps in preparing your family business for a transition, or how to equip your communication vehicle to enable effective governance in a new leadership group, please contact your personal BDO advisor or our Business Transition Services team at 1.800.598.6400.

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