November 2022 4th issue: Why do SMEs fail to take over their businesses?
It is no exaggeration to say that how to smoothly hand over the company to the successor is an issue that affects the survival of the company. Unfortunately, not a few small and medium-sized enterprises have been hit hard by taking this "business succession" lightly. In some cases, the company may choose a successor that make the company collapses.
First, let's consider the factors behind the failure of business succession.
[Factors of business succession failure]
Factors of failure 1. Do not listen to the ideas and opinions of the younger generation
Business succession is to hand over the business to the younger generation. Business succession is not possible without listening to the ideas and opinions of the younger generation. Small and medium-sized business owners who fail to take over their business often do not listen to the ideas and opinions of the younger generation.
Factors of failure 2. impose outdated business methods
If you try to impose outdated business methods on the younger generation, you are more likely to fail in business succession. I don't like being forced into other people's ideas. Especially if it's an outdated, outdated way of thinking. It's not necessarily a bad thing to cherish old ideas, but they shouldn't be obsolete.
Factors of failure 3 . Disliked as an “annoying teacher”
Managers who lament that there is no successor in small and medium-sized enterprises, or managers who fail to succeed to business succession, may be "teachers" hated by young people. If the manager is a "annoying teacher", business succession will not proceed easily.
Factors of failure 4. only talk about old boasts
Anybody hates people who just brag about themselves. Young people will get fed up and run away if the manager is someone who only boasts about the past.
Factors of failure 5. Choose someone who can't keep employees together as a successor
Choosing a person who can organize employees is a necessary condition for choosing a successor. If you choose someone who can't bring your employees together as your successor, from that day on, your employees' hearts will fall apart.
Factors of failure 6. Even after the change of president, there is only minor interference (micromanagement)
After the change of president, if you intervene minutely in what the new president does, you will lose the motivation of the new president. If the new president loses motivation, management will not grow.
Factors of failure 7. After giving authority to the successor, take away that authority and make management decisions arbitrarily
Once the authority is given to the successor, the successor will be dissatisfied if the power is taken away and management decisions are made without permission. Depending on the situation, the successor may come to resent it, causing conflict or internal strife.
Factors of failure 8. Harassment by speaking ill of the successor (new president) you have chosen
If you choose a successor yourself and then speak ill of him and harass him, you will have a conflict with the successor. When conflicts with the successor appear, employees become anxious and the company is shaken. Internal turmoil leads to deterioration of management.
Based on these factors of failure, let's consider the points for successful business succession from the perspective of countermeasures and prevention.
[Points for successful business succession]
Success points 1. Communicate with younger generations and actively absorb their thoughts and opinions
Communicate with the younger generation when you take over the business and actively absorb their ideas and opinions. Taking into account the ideas and opinions of the younger generation will enable a smoother business succession.
Success point 2. Keep learning the latest sales methods
Managers should always learn the latest sales methods. Don't try to impose your generation's sales method, encourage the younger generation to think of new sales styles. Business succession is to rejuvenate in order to open up the future of the company.
Success point 3. Create manuals and video teaching materials if you want to teach without becoming an “annoying teacher”
Be careful not to become a “teacher” that the younger generation hates. However, if there is something you want to teach, it would be a good idea to create a manual or video teaching material, classify it by item, and make it possible for the younger generation to "learn when they want to know."
Success point 4. talk only about your failures
You don't have to "tell your success story" to the younger generation. Whether you are successful or not is for others to judge, not for you to brag about. Rather, it is important to talk only about your failures and pass them on as lessons. The younger generation listens intently.
Success point 5. Have some candidates go through management training before appointing them as successors. If you appoint a successor, make a highly loyal and capable person number 2
Instead of choosing a successor out of the blue, it would be a good idea to start with a few successor candidates and have each of them go through management training. Then, if you choose the person who is most likely to be able to bring the employees together, you will not have to make a big mistake.
Immediately after appointing a successor, even if the person is competent, it is easy for employees to become anxious. So, if possible, when you nominate a successor, it's a good idea to put a highly loyal and capable person in number two.
Key to success 6. Do not intervene in small details after the change of president
After the change of president, it is basic that the former president does not interfere in detail. If there is anything the former president should do, it is to encourage and motivate the new president. Or, when the new president is worried, it would be nice to give him/her advice when he is in trouble.
Key to success7. Grant authority once the hurdles are cleared, never take away authority once granted
Be careful when authorizing successors. It may be a good idea to set some hurdles before granting permissions, and set rules such as granting permissions after clearing them. In order not to cause trouble with the new president, do not take away the authority once given.
Key to success 8. Respect your chosen successor (new president) and use honorifics when speaking
After the change of president, the new president is already the person in power in the company. In order not to disturb the order of the company, even the former president should not be more bossy than the new president. Be respectful of the new president and use honorifics when speaking to him.
How was it. Business succession is an important matter that greatly affects the future of a company. I want to be careful not to make mistakes.
* 8 factors that make business succession unsuccessful and 8 points for success (PDF file)
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