Bringing in Management

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Bringing in Management

Hamish Pryde • July 4, 2012

It's fast approaching - that time when you pass your business onto another generation of the family. This is what you've planned for from the day you first set up your business.

So, the next generation - who are they? Are they capable of taking over the reins? Do they even want to? While you may have planned for another family member to succeed you, do you actually have someone to fit the bill?

Naturally you could sell the business or hire a new Chief Executive. Perhaps most challenging, however, is the situation where you have a willing successor who is just not yet ready to take up the top job.

In this situation a temporary manager from outside the family could be brought in to bridge the transition gap between the founder and the next generation. The outside executive can act as coach and mentor and assist in the development of other members of the management team, both family and non-family.

This training and mentoring can be vital. Far too often family businesses do not survive through to the second or third generation because the successor does not have the necessary skills or the interest and enthusiasm to do the job properly.

Most often the problem lies in a lack of planning. A 1998 survey suggests New Zealand businesses do not pay nearly enough attention to succession planning. Results of the survey ("A survey of Family and Private Businesses in New Zealand, 1998" - by Peter Evans) showed only 17.3% of businesses had a written succession plan in place.

Be prepared to let go of the reins

However, bear in mind that bringing in someone else to run your business, and possibly groom your successor, is not always easy. Once you've decided to go down this route, you will have to accept this person is likely to do things differently. Just because you have done something the same way for years should not mean they need to continue with it. They bring to the job their own skills, fresh ideas and, potentially, current thinking, which can be a positive way forward for the Company.

You will need to develop some ground rules, including a detailed job description for the new executive. Then get out of the way and let the person get on with the job of managing the business. Do not confuse the scene by having two CEO's running the business. Draw up a set of rules, agree on a monitoring system and then leave them to take over the reins.

If you are planning to still have some involvement in the business, you need to define your role before the new person comes on board.

# How much time will you spend in the business?

# What is your role to be? Perhaps you will still be involved in strategic planning in a non-executive capacity, but attend Board meetings and review management reports.

A successful transition is unlikely if you, as the principal, are still involved on a day-to-day basis.

Plan to avoid disaster

Unless there is proper planning and forethought, the employment of an outside executive into a family business could be a disaster. Define the duties and the responsibilities. Then select the person and, prior to the start date, agree on your expectations of the position and what your ongoing role will be.

Make sure you do not forget the team. This will be a big change, especially for other family members who may not be happy about someone else taking over what they may have considered their role. You need to prepare everyone for this new phase of the business and make the handover of responsibility very public and very clear that this person is now in charge.

The transition process can take time, so don't expect miracles overnight. But if properly planned and implemented accordingly, you should be in for a smooth ride.

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More & More Paper Less

By Hamish Pryde • September 11, 2024

Paper is everywhere. We spend a lot of time and money moving paperwork around. But with today’s technology it is now possible to get rid of paper entirely. Digital documents are simpler, easier to store and send, more searchable and permanent. How long does it take to post a document to somebody via the ole stamp and envelope method, that is snail mail? It is more efficient and timelier to email the document. How many times do you go to print a document at home and find that your printer has run out of ink? Why do we still hold onto printing paper documents? Sometimes it’s just because that’s what we’ve always done and let’s face it change can be difficult at first. Paper alone is cheap. But when you start paying for printers, toner, servicing and maintenance, paper starts to look more expensive. Let alone the storage cost. Paper tax records for seven years can be quite a few boxes of paper. We have embraced some paperless technology as part of a modern business practice. This includes digital signatures, digital collaboration, paperless minutes of business improvement and coaching meetings, electronic work papers and my new digital notebook which I am enjoying. We send questionnaires via email to you to gather vital information to enable us to prepare your annual financial statements. This is a PDF document. Instead of printing the questionnaires you could save the document down into a folder of your choice then edit the PDF document and return to us. How do you edit a PDF document you ask? Once you have opened the document the Adobe online editor lets you do some things for free. The online editor works in any web browser and lets you add text, sticky notes and highlights. Click on the fill & sign button to the right of the document, then in the top toolbar click Iab text button. You can add text directly on the PDF document. Have a try next time you have a PDF document open. Xero and Farm Focus users can attach invoices directly to the transaction loaded into Xero. Then if you are looking at the rates expense in the profit and loss account or farm working account, you can drill down into the rates code and see the transactions. Then attached to each transaction is the rates invoice if you use this great functionality. All invoices can now be stored in the cloud. So why paperless? Productivity - electronic documents are instantly and simultaneously available to everyone who needs them. Reduce waiting times with less risk of loss or damage. Cost savings - you will save money on printing, postage and associated costs. You could pay less rent because you won’t need all that space for your files. Security - electronic documents are more secure than printed ones. Digital records can be password protected and rendered unreadable through encryption. Printed documents are only as secure as their proximity to a copy machine. Reduced Clutter - paperwork on desks and shelves are not only untidy it’s inefficient too. The organisation of digital files is simpler and your office will look much neater. That will help you clear your mind to focus on your business. Environmentally friendly - less printing means fewer trees cut down for pulp and less energy used to make and transport paper. Disaster recovery - if there is a fire or flood, recovery from the backup is much easier with digital storage them with paper. There are great help articles available in Xero or Farm Focus if you are not attaching invoices to payments already. To find out how click on the links below: If you would like to explore ways you can go paperless we can help.