Automobile Dealer Magazine

Seeking Succession: To The Parents of Successor Children--- Part 1

by Loyd H. Rawls

As a parent you will face many challenges when addressing the issues of planning for the succession of your automobile dealership to your children. Notably you must respect your child as an adult who is trying to make their way in life. When a child comes into a business you have the responsibility of disassociating yourself from pre-conceived opinions. Indeed, you should dedicate yourself to meeting the Reasonable Expectations of Heirs, as layed out in the next column.

If you cannot honestly meet these reasonable expectations, do yourself, your aspiring successor(s), your greater family and your employees a favor and reconsider your goal of succession. Business succession is effective when interacting with children. If you enter this process with a handi-capped attitude or opinion, the resulting frustration or strife can be overpowering.

As a parent, you are expected to carry the weight of several roles. Life is not simple as others depend upon you to lead the business, manage the business, service the banks, service suppliers, train your children and be a parent. The pressure from these multiple roles can be overpowering. If you are like most mortals and have difficulty serving all these masters, consider instituting a board of directors consisting of two or more non-family members who are not close friends of the family. These advisors will help you cut through many of the burdens or decisions common to a family business. This board also will convey a message to your children and/or in-laws that they will be subject to some degree of objective evaluation of their performance and behavior.

Hopefully, your children will be challenged by objective opinion and will continue this structure after your retirement. When selecting board members, keep in mind it makes no sense to select an outside board member who does not have the business acumen and experience to offer assistance. On a similar note, you may be looking at yourself in the mirror each morning wondering why you are putting yourself through the agony of trying to train your children to be responsible business owners and managers. You may be thinking that he/she needs help that you are unable to provide.

And moreover, if circumstances do not change, you are going to need a "shrink" because he/she is driving you crazy. The fact may be that you both need help. Don't feel like deviants if you need a professional to help understand who and what you are dealing with. A family psychologist can really help you sort out difficulties. Of greater value, they can help you understand why your children do certain things and how to cope with ongoing problems.

Reasonable Expectations of Heirs:

• Make no assumption that I know how to act as a family member employee.
• Describe to me in detail what may be assumed to be the trivial fundamentals of employment such as hours of empl oyment, dress, parking, breaks, vacations, drug policy, sexual harassment policy, etc.
• Give me boundaries for my attitude and actions. Hold me accountable for both.
• Share with me your vision of my progressions through the business with a time table.
• Keep me informed of my progress.
• Ask my opinion.
• Listen to me.
• Respect my wife or husband.
• Pay me fairly.
• Challenge me.

On the other side of the equation, experienced professionals can facilitate communication. They can convey messages that adult children historically have difficulty receiving from parents. It is smart to get a "pro" involved. You probably will not like some of what he has to say, but you can benefit greatly from his objective perspective about you, your family and your business.

Frequently, as a parent, it is evident that the status quo attitude, motivation, know-how, harmony, etc., of your children are just not going to make the grade after your withdrawal. This being the case, do not trust your single opinion that has been biased by having also been a dad, mom or relative for many years. Your feelings are critically important and you have a stewardship res-ponsibility to work through them.

However, when you are address-ing something as important as a child's career, family relationships or the continuity of a family legacy, get at least one qualified second opinion before making a final decision. If your children are adults active in the business and have, in your opinion, poor attitudes about the business, dispel the attitude of whipping them into shape. They are not going to change very much. You can refine young adults, but do not kid yourself by thinking you can cause a major change in their attitudes or actions. Remember, if there is any change, you will be the one doing most of it.

If action has to be taken, if changes must be made, you must be prepared to do it or give up control. By all means, do not plan on your children or in-laws taking the initiative to change jobs, get a job, get along with one another, take control or whatever it is that needs to be done. In nine out of ten cases, when important strategic decisions are made in succession planning, it is the parent leading the way.

Every family member in a succession planning environment is part of the problem or part of the solution. If you are taking the initiative to deal with the problems, you are virtually eliminating the prospect that you are part of the problem. As General George Patton said, "Lead, follow, or get out of the way." And typically, leaders are called to make tough decisions. When you show a willingness to seek advice and make decisions, those around you will show willingness to make changes including, of course, where they are working.

Loyd H. Rawls CLU, CbFC, MSFS, is President of The Rawls Company in Orlando, FL and has specialized in family estate and succession planning for closely-held, family-owned automobile dealerships since 1973.