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Family Business Matters 11/11 09:16
Succession and Your Second Mountain
Succession requires seeking what will be necessary for future success, while
simultaneously acting in ways that reduce your own daily responsibilities.
By Lance Woodbury
DTN Farm Business Adviser
The act of passing your business to the next generation is difficult for
several reasons. Succession requires actively seeking what will be necessary
for future success, while simultaneously acting in ways that reduce your own
daily business responsibilities.
Another reason is that your identity, or who you are, tends to be wrapped up
in your role, or what you do, and during succession, your role -- and thus your
psyche -- is undergoing significant change.
Finally, all of this is happening while you are trying to determine your
ongoing sources of income and the tax effects of transitioning ownership.
Indeed, business succession can be uncertain, emotionally difficult and
financially complex.
FIRST MOUNTAIN, SECOND MOUNTAIN
In his latest book, "The Second Mountain: The Quest for a Moral Life," David
Brooks offered help with succession planning by focusing on the next chapter of
your life. Brooks suggested the "first mountain" is the career and business
success you've enjoyed to this point. It could be represented in terms of acres
farmed or ranched, head of livestock, number of employees, dollars of revenue,
the geographic area covered, your net worth or the number of years or
generations in business.
The "second mountain" is focused on the impact you will have on others. In
describing your second mountain, you might talk about the difference you've
made for your employees, the gifts you have given to charity, the nature of
your friendships or the time you've spent at your church caring for others. The
measures of second-mountain success are less material and more relational,
involving the well-being of your family, friends and community. The measures
may even be more spiritual in nature, describing your general alignment with a
transcendent ideal.
The first mountain is about succeeding in the world and achieving the
benchmarks that show everyone around you that you have been prosperous. The
second mountain, on the other hand, is about reaching a certain level of
personal fulfillment and a sense that you have been effective because other
people are better. "That's the crucial way to tell whether you are on your
first or second mountain," Brooks wrote. "Where is your ultimate appeal? To
self, or something outside of self?"
TWO QUESTIONS FOR SUCCESSION
This is where business succession enters the equation. If succession means
other people will assume your responsibilities in the business (your first
mountain), then your focus in your transition needs to be on the second
mountain. In other words, succession does not simply answer the question, "How
do I let go?" It answers the question, "Where am I going?"
There are two related questions on the path up the second mountain.
How will my next chapter be fulfilling? Knowing the second mountain is not
marked by traditional norms of business success, you must focus on fulfillment.
This is more than just "finding a hobby." It involves finding a way to make a
contribution to something bigger than yourself -- a cause, a person, an
organization, a community or an ideal. Another way to ask this question is, "To
what or whom, outside of the business, will I commit the next several years?"
How will I help the next generation be successful? Those who successfully
climb the second mountain are often motivated by seeing other people succeed.
If you can focus on how best to help the next generation flourish -- which
means you must sometimes watch them fail, or you might need to be gone for
extended periods of time -- the odds are your journey up the second mountain
will be more satisfying.
Succession planning is a challenge for most business owners. But, if you
have confidence in the next generation, the transition is made easier by
focusing on your second-mountain opportunities.
**
Editor's Note: Write Lance Woodbury at Family Business Matters, 2204
Lakeshore Dr., Suite 415, Birmingham, AL 35209, or email lance@agprogress.com.
(ES/AG)
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.
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