The Last Challenge of Entrepreneurship
Another item that can be invaluable to the entrepreneur is assisting them in creating a leadership plan for the company. Many entrepreneurs are loath to do this because they fear that they will have to leave the company. As we say in the Last Challenge, that is not the case. In addition to creating a plan for themselves, entrepreneurs must prepare the next generation for their roles in leading. Competency and commitment are the criteria for selecting which job the next generations will have. Also, encouraging entrepreneurs to use an industrial psychologist can be very helpful in making the right leadership choice which can be very difficult when choosing among siblings or cousins. The assessment process also becomes the basis for creating a coaching / leadership development plan.
As you can imagine, this can be an enormous challenge for the entrepreneur, as they change their job description and become the leader with their family and advisors of the plan for the future of the company. Traditionally as the closest advisor to entrepreneurs, accountants can be very supportive to entrepreneurs in their new role.
Since entrepreneurs are driven by their dreams, it’s critically important that they develop a new dream about their role in the company, as well as the family leisure time and service and philanthropy. I refer to this process of developing a new dream as the Life Career Planning Process. The idea is to develop a new dream with your spouse regarding the above monitored items. (For details about the process you can request assistance by contacting Tom Hubler at: firstname.lastname@example.org.
The Last Challenge also includes the more traditional tasks like developing a financial exit strategy, an estate plan, and a leadership plan for the company.
Below is the Last Challenge’s Checklist which details all the items necessary for completion of the Last Challenge. You can use this checklist to guide you in your work with your clients. As you can see, it includes many non-financial items which Allianz referred to in their 2005 study Baby Boomers and Their Adult Children, which are ten times more important than the money.
2. Ownership Plan – transfer ownership and control
3. Estate Plan that is communicated to the family
4. Create and train the leadership team
5. Create Life Career Plan with spouse
6. Create an active board
7. Codify the family heritage and stories
8. Provide leadership to celebrate family rituals
9. Support family meetings
10. Create a Common Family Vision
11. Create a leadership plan for the adult children working in the company
12. Identify and celebrate the family values
13. Create a Family Philanthropy and Services Plan for the family
14. Create a Family Participation Plan and Family Code of Conduct
15. Create an emergency leadership plan
16. Create an Ethical Will
One of the items that is most important that provides leadership to the family is the celebration of family rituals. Family Rituals are the glue that hold a family together and their continual practice is integral to the family and the success of the family business. The goal is to be intentional about rituals. It’s important to keep them current and revise them as necessary.
Related to this are family meetings, which help the family manage the boundary between their business and family. Family meetings are also a means of building the emotional equity of the family while you’re building the equity of the company. It’s important to have family meetings so that the family can formulate their expectations for the performance of the company and communicate those expectations to the shareholder, who will elect the board of directors as management to implement the family expectations.
As a part of the entrepreneur’s legacy, it’s most important to encourage them to codify the family history, particularly family stories and the events good, bad, or indifferent that have shaped the family.
This is where an ethical will comes in because it allows the entrepreneur to memorialize the most important things in their lives. It allows them to pass on to future generations the things that were most important to them. Things like memories, values, people, and events that have shaped their lives.
Memorializing your legacy will be one of the greatest gifts you will ever make to your family. When it comes to the Last Challenge of Entrepreneurship, there is a lot to be done for the entrepreneur. Your encouragement, support, and assistance can be invaluable in assisting your clients. They will be forever grateful for your support.
View the article in Better Business Focus: click here.