Introduction
Through the ages, business owners have dreamed of building an enterprise to a point where they can sell the business and realize a considerable return for their equity or hand over the reins to a competent general manager or CEO.

The timeless dream of finding succession can be easily shattered and a successful entrepreneur can find him or herself in a quandary, having to step back into the picture to run the company once again. The key to making these transitions successfully lies in learning from the experiences of others – thus today’s important topic.

The Study
Despite years of hands-on experience helping owners find general managers and make successful transitions, I thought it would be constructive for me to step back, and interview owners who actually did hire someone to run their business. I wanted to understand the issues and challenges from their point of view. My objective was to gain insight that might add depth to my practice and to communicate conclusions that might be helpful to others.

I recently completed sixteen in-depth discussions with business owners who had attempted to replace themselves. We talked about why they made the decision to find someone, how difficult it was to find the right person, what difficulties they experienced in turning over the business, and whether they considered the result a success. As you would imagine, the answers were as varied as the personalities of these hard working people.

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The Results

The interviews made the highly personal nature of the decision very clear. Each of these businesses was established with a viable future. In the vast majority of cases, the decision to make the change was driven more by personal and lifestyle goals than financial considerations.

Therefore, I concluded that a successful transition has two elements. First, business performance had to be enhanced. Second, the owner had to be satisfied with how the business was run, and the quality of their life after the change. They needed to feel that the business would be in good hands under the new leadership.

The first, and perhaps most important conclusion, is how hard it is to do this right. Only 25 percent of the participants were able to achieve success with the first executive person hired. Another 25% were successful the second time with a second generation of hired executives.

The factors that appeared to be most significant in the successes were:

• The owner drove the process and did not react to outside pressure. (When outsiders drove the change, failure was very likely.) In the successful cases, the owner made the decision to find someone new and controlled who was selected for the position.

• The person selected fit the job specification and understood that the job was to take charge of day-to-day operations. The person's ego didn't go beyond that domain. They saw themselves working to achieve the owner's objectives. These people also had relevant, solid business experience and management credentials.

• In all of the cases, there were transition issues where the owner had to exercise self-control and give the person hired an opportunity to take charge. It was never easy for the owner (or for the person hired) on day one.

• In all of the successful cases the business owner relied upon advisors, to help with selection and for guidance in the transition process.

I found the last conclusion most interesting. Is this a recommendation for advisors? Advisors can be very useful but that isn't the principal point. I think it is because the owners who were successful had the self confidence to realize that they didn't have the ability to do everything themselves. They were open to the input of others and to trusting others abilities. That made them, more than the ones who failed, ready to share authority.