When we discuss “change” in a business context we tend to think of adopting new production processes, introducing new marketing strategies, or perhaps making use of new technologies.
These types of changes are important, they keep the business moving forward, and help create competitive advantages that contribute to growth and profitability. As such, these changes deserve to be effectively managed and implemented so that the desired outcomes are achieved while minimizing the related costs and disruption to the business. Change doesn’t manage itself.
Managing the technical or administrative aspects of change can be challenging and time consuming. It demands focus and commitment from ownership and management. What is sometimes overlooked, however, is the role that people play in the success or failure of change.
Stephen Doiron, President of Change Management Professionals has been advising clients for 20 years:
“Regardless of what change an organization is contemplating, managing people through it is often the most challenging aspect for leaders. That challenge is exacerbated by the fact that a successful outcome most often depends on ensuring employees and other key stakeholders understand and embrace the change.”
The process of preparing a business for sale and transitioning to new owners is no different. In fact, the challenge is intensified because the business owner is being personally impacted by the change and must also prepare his/her team for it. This will entail a significant amount of change that impacts a variety of stakeholders including partners, employees, family members, customers and suppliers and requires a proactive and deliberate change-management strategy. A good change-management strategy will consider a number of factors:
– As the owner, take time to clarify your vision for life after the transition: As obvious as this seems as a first step, many entrepreneurs don’t do this early enough. If you don’t take time to prepare for the personal impact of this change, it will be more challenging for you to embrace the change and lead others through it.
– Prepare a Communication Plan: While confidentiality may be required for a period, at some point it will be critical to have a carefully thought out communication plan that is acted on throughout the transition process. What to say, to whom you say it and when comes with inherent risks. But, not having a communication plan, creates even more uncertainty for everyone and greater risks for the owner and all stakeholders.
– Stay close to your key people: Every business has people who are vital to the organization. And new owners look to ensure the business has people who can help them run it effectively as part of their due diligence. In any organization, your best people will most often have other employment options. In times of uncertainty such as an ownership transition, they may explore these options, creating risks for the business owner and the business.
Stephen advises, “Most business owners I know care deeply about their legacy. Paying attention to the people side of their transition as well as the transaction side of it, will help preserve their legacy.”
Leading people from what is known to what is unknown or new is a challenge in any business. When it comes to exiting your business, the unique elements of this challenge are a call for business owners to include the people side of the change in their exit plans.
Ian MacFadden is co-founder and Partner of exitRITE Planning Services. His column appears the first Thursday of each month. You can reach Ian at email@example.com or go to www.exitrite.com