Interim executives, by definition, come into difficult situations, assess them quickly, and create a plan for success. That means they have a front-row seat to the most common business mistakes companies make in the areas of leadership, operations, human capital, strategy, business finances, and change initiatives.
Focusing on these fundamental business needs is a good starting point for any struggling business.
There’s bad news and good news when it comes to family business transition to the next generation.
First, the bad news: Only about one-third of businesses survive that transition. Here’s how theHarvard Business Review put it in a 2022 article: “In many family businesses, the tension between the eagerness of the next generation’s leaders to take control, and the founding generation’s willingness torelinquish control, is the source of many failed relationships and companies.”
Now, the good news: It doesn’t have to be that way. With a lot of planning, honest conversation, and realistic expectations, family businesses can survive and thrive for generations to come.
Here, we dive into the challenges of transitioning a family business to second-generation leadership and how to navigate those challenges successfully.
Selling your business to private equity is a potentially very lucrative business exit strategy. In fact, the second sale — when the PE firm sells the company outright to recoup its initial investment — can be even more lucrative than the first deal when you sell to a PE firm.
But selling your business to a private equity fund is a complicated sale process and you could end up partners for a number of years before getting a big buyout when the second sale closes. So it’s important to understand all of the ins and outs before embarking on this path.
Here, we share 9 important questions you should ask if you are considering selling your business to private equity.
How do you know whether an interim executive will be the right fit for your company’s needs? Ultimately, that’s an individual decision that depends on your company. But generally, when we get a call from an executive, head of human resources, small business owner, or private equity investor, it’s because the organization is in motion. Leadership to drive growth, change, or turnaround is needed. And it’s needed fast.
There are some family businesses that have been around for 100 years and continued to thrive under the leadership of 5 or more generations. But they are rare – as rare as a child who loves basketball making his way to the NBA.
So notes John Messervey, an organizational behavior consultant who counsels high wealth families through very difficult conversations about their family dynamic, their family business, and their hopes for the next generation.
His years of experience working with family businesses and entrepreneurs led him to develop these 12 lessons for family business success:
Every day at InterimExecs we are reminded of how grateful we are to work with inspiring leaders, owners, investors, and boards. While 2020 was a year of huge challenges, we saw many companies take time to reflect on how they could do better, embrace change, and seize new opportunities.
We are eager to continue helping other amazing companies secure expert RED Team leadership for their biggest challenges and greatest opportunities. Let us know how we can be a resource as you charge forward into 2021.
When Barry Zekelman’s father passed away he was 19 years old and six months into college. His dad left behind a business employing 5 people manufacturing steel tubing. It wasn’t much of a head start with beat up machinery, negative $5 million of retained earnings, and losing $60,000 every month. The business was on the brink of bankruptcy. Everyone told Barry to shut it down and stay in school, but he admits, “quite frankly, school was boring,” realizing that for him he had already outgrown it. This was his shot.
Barry had to piece together how to run a manufacturing business, like a pilot learning how to fly as the plane takes a nosedive. “I learned how to read an income statement and put one together real quick. I learned that making money doesn’t mean having money. You can make a lot of income – but cash is king,” he says.
He had no sooner moved into his dad’s office when two employees came in asking for a raise. Problem was, he couldn’t afford it – and he honestly didn’t know how they were making a living off what they were paid. He told them to do that he needed more production. The cash wasn’t there. The employees pleaded, ‘well – if you gave us a $2 an hour raise, this machine would never stop.”
Barry remembers thinking: what comes first, the chicken or the egg? “If this machine never stopped, I’d be able to give you a $2 an hour raise,” he said. “If I give you a raise and nothing changes, are you going to give me the money back?” The guys looked at each other and said it doesn’t work that way. Barry told them they had to do this together to be successful.
Growing up with sisters, I longed for a brother. No such luck.
But when I got into the world, I got close to my cousins Keith and Craig Landy, and they became as close as brothers to me. The bonus with my Landy brothers was that they were growing a fascinating family-owned business, Germfree Labs, that I got to watch, and eventually help strategize over.
Germfree is a world leader in manufacturing glass and steel enclosures that contain biological, chemical, and nuclear stuff – think of the most toxic or nasty substances, and Germfree’s the go-to supplier, serving the US Army, NIH, thousands of commercial, government, and hospital customers with products ranging from small gloveboxes you stick your hands in, to fully mobile labs transportable anywhere in the world.
The only certainty in business is change. But change is accelerating, less predictable, and increasingly, beyond the control of organizations. As technology and unforeseen events continue to drive exponential change, businesses that can’t keep up risk being left behind.
Companies struggling to generate growth and stay relevant amid rapid transformation often look to new leadership. A growing number of companies are also looking to a different kind of leader—one who specializes in change and embraces the challenge of helping companies solve their biggest issues. Enter the interim executive, a new breed of on-demand leadership that brings outside perspective, cutting-edge thinking, veteran experience, and a laser focus on results.
While many companies are facing new challenges and increasing volatility, we’ve found that most leaders’ responses and outcomes tend to be unique. While quarantined with COVID-19, Todd Herman, author of The Alter Ego Effect, decided to interview 29 CEOs to hear how they described their circumstances.
Each company was experiencing a downturn. Herman analyzed each CEO’s word choice and language to see how they were reacting, noting the importance of a leader’s pronouncements: “words create reality.” He saw big differences in how executives were wired and reacted to the economic rollercoaster. His findings led him to divide the CEOs into three groups:
Fear-Focused CEOs – emotional, concerned, and overwhelmed. Tended to use negative future pacing words like ‘struggle’, ‘fear’, ‘hard’, or ‘difficult’. Spent the most time watching media or finger pointing rather than what could be done.
Unfocused CEOs – dismissive, uncertain, wait and see. Talked about getting a plan, but tended to use the word ‘plan’ in a negative or needs-based way.
Strategy Focused CEOs – take and use what’s given, focused on growth/opportunity. Positive. Spending time leaning into networks.
First-year Change Agent members have access to the Interim Institute’s 4 hour audio program on the Fundamentals of Interim Management, and a one-hour strategy session to help jumpstart their interim career.
*$200 additional charge for Accelerator Program only applies for first-year members. After the first year, membership renews at $485/year.
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