When Succession is Ascension

Succession is a theme that runs deep through the history of my family, and of Ray White.

Our family business has been led now by four generations. Each generation, including mine, has been driven to making Ray White better for future generations, both for our family and for our members. That sense of custodianship is ultimately both liberating and motivating.

In every case, the transition of leadership from one generation to the next has happened naturally over a long period of time, enabling leadership instincts to develop through personal experience and opportunity. Each generation has also derived immense satisfaction in seeing the next generation come through.

In our family, we view succession as more like an ascension. It’s the very peak of a successful career and a sign of strength of a family and a company.

Succession is not only relevant to our family. It’s critical to all of the businesses in our network, especially family businesses. As a franchisor, we now realise that one of our most important roles is to challenge our members to be engaged in succession planning. Indeed, our future as a network relies on our collective preparedness to address succession issues.

We are blessed that two of our senior leaders in our group, Carey Smith and Luke Richardson, have studied this area closely over many years and become skilled in facilitating succession discussions in our network. Thanks largely to their hard work, we recently held our second Succession and Family Business Forum on the Gold Coast.

During the lead up to the conference and in talking with our members on the merits of attending, we came up against the usual suspicion of the term succession. Many members thought that by inviting them to attend, we must have thought that their exit is around the corner! Feeling they weren’t ready to sell right now, or that they didn’t need or want to reduce their ownership stake, many felt they therefore had no need to come.

Regardless of our efforts to explain the long term view on succession, in the introductory comments at the Forum we heard several members saying they weren’t near retirement, almost as if they were defending their very attendance!

Ultimately, succession is a topic best addressed through case studies and storytelling and we were fortunate to hear many of these from our members. Through all of these, it was clear that succession is a process, not an event. It’s a conversation often happens over a 10, 15 or 20 year period.

In fact, succession options are best found when businesses are expanding with momentum, where leadership skills are given the chance to develop, and when personal identity and ambition are relentlessly discussed until solutions can be found that work for all parties.

We heard from business owners who had successfully brought in partners early, enabling an increase in the footprint across multiple locations in some instances. In the process of developing leaders in their team they had expanded and were able to gradually sell down equity, ensuring that they maximised the value of their eventual exit as their businesses continued to thrive.

Then there were businesses like ours, owned by families, with a daughter or son rising through the ranks with the intention of expanding the business and one day assuming leadership. We were reminded of the importance of communication and giving the next generation room to develop and learn in their own way.

On the flip side, we heard stories of business owners who have found themselves at the point where they now want an exit, though their business no longer seems appealing to those who might enable one. One particular business owner told of the many times over the years he had knocked back requests for equity buy-in or other forms of partnerships, and now has limited options to revitalise his business and find a pathway to a successful exit.

All the stories were intensely personal and all were fascinating. It was such a shame we did not have more of our members there to hear them. The entire event reaffirmed to us both the importance of succession to all of our members, and the need for us to change its perception.

Dan White, Managing Director