The Psychology of Business Owners: Making or Breaking Transition Success
by Molly Barnes
December 4, 2019
On Wednesday, Nov. 20, 2019, more than 100 Wisconsin Family Business Center members, sponsors, and guests joined us for The Psychology of Business Owners: Making or Breaking Transition Success, presented by Dr. Allie Taylor of Orange Kiwi. At some point, business transitions and family relationships are going to impact your business. Based on Dr. Taylor’s presentation, here are some ideas for successfully navigating those transitions.
The Complexity of Transition into Clarity
Business transitions, such as scaling, selling, and succession, are incredibly complex. They requires us to change how we think and how we act. In order to get through difficult business transitions, we need to create clarity and control. Gaining clarity and control requires us to navigate the interactions between the ecosystem the family business operates in and the psychological dynamics that exist in the business and family. However, a business owner can have the most impact and control of a transition when they gain clarity about their own psychology.
Resist the urge to make assumptions about how others will think or act and talk to team members (especially relatives) about change. They likely will surprise you and be open to a conversation, making it easier to find clarity. You will be on the same page and can move into the transition in a simplified, unified way.
The Ecosystem of the Family Business
Dr. Taylor suggests that creating an ecosystem that is open and collaborative will improve the odds for a successful transition. She encourages building an inclusive, team-oriented culture with a captain vs. a quarterback which can offer better communication, engagement, and accountability. Advisors (lawyer, accountant, banker, etc.) are an important part of the ecosystem and offer an outside perspective that can help provide clarity, however, they should be carefully selected based on their willingness to work with other advisors in the best interest of the family and business.
The Psychology of the Owner
Along with an external perspective, you must also think about your own psychology. Do you know your personality and decision-making style? What unconscious biases lie in your way? What challenges are in store and how do you prepare for them? Bias, memories, assumptions, and fear are more often than not what is holding you back from greater success, and you must take time to think about them.
“We cannot solve our problems with the same thinking we used when we created them.”
– Albert Einstein
Dr. Taylor has identified 4 stages of transition that all owners go through noting that many skip the exploration stage and dive right into strategy and execution because that is where most business owners are comfortable.
The key to a successful transition: You must explore FIRST! People who refuse to explore new ideas, ask reflective questions and think about what they want for the family, the business, and themselves are often left confused and frustrated. Exploration also includes uncovering cognitive biases and thinking errors, understanding your unique personality style (and then leverage that into building the team around you), and exploring your fears or what is holding you back. You’ll also discover who’s open to these thoughtful conversations and who is unwilling or unable to collaborate. Finally, engaging with family leaders during exploration will increase their confidence as you discover opportunities for development.
Transitions in any business can be difficult and complex, but with the right mindset and preparations you can set yourself and your business up for success. Set aside assumptions (especially those you make about your relatives), have conversations with everyone on the team, bring in an outside perspective to advise you, and know where you need to improve to grow through change.
Don’t miss out on our upcoming speaker series by registering to join us on Thursday, December 12 for How Servant Leaders Achieve Better Results and Why it Matters Now More Than Ever!