Want to Leave a Great Legacy? Create an Ownership Mindset
Scot Hunsaker, Author, Heroic Ownership
As business owners and leaders, we touch hundreds of lives. It is a tremendous privilege and awesome responsibility. We know the risks of creating and molding something. In spite of our success, we live each day in some amount of dread or fear that what we envision might fail.
That thought may sound something like this: What if this thing I’m making, which requires all of my time, energy, and resources, fails? And once your business gets off the ground, the fear of failure doesn’t go away. It just evolves into: Now that we are successful, how will I keep it that way?
But here’s another critical question that we need to be asking ourselves as well: What happens to all of this and the people who helped build it when I go away someday?
To me, the answer to that question is crystal clear. We owe it to ourselves and to the families of the people who have joined with us in our endeavors to make a sincere effort to set up our companies to achieve the highest level of success even after we leave or die. We can do this not because it is easy or comfortable, but because that is what the others who have joined us in our journey deserve.
Most entrepreneurs are so busy doing the day to day things that, even with the best of intentions, it doesn’t happen. The numbers tell a sobering story born out of procrastination, or perhaps fear:
- 66% of companies fold when the current leadership leaves.
- 80% of business owners intend to sell the firm to family members or employees, only 13% complete the transaction.
- 20% of business owners sell to a third party.
- 50% of owners expect they will hand down the business to family members, yet in reality this happens only 15% of the time.
- 30% of owners believe they will sell to their employees; this happens only 5% of the time.
- 20% of owners believe they will sell to competitors, or that outsiders will purchase the company.
These percentages reflect the real-world outcomes. But it doesn’t have to be that way.
The best way that I have found to achieve this is through the creation of ownership thinking and opportunity for every person who emerges as a leader. If business owners chose to invest in their teams where would that take them? What happens when we create a leadership team that can carry on the organization when someday we choose not to come into the office every day?
Ownership thinking means your goal as a business owner is to nurture your employees and the people around you so that they can build out a skill set that allows them to make good decisions. Allowing people to innovate and improve upon your original design makes the company more agile. I can tell you from experience that if your business is to survive in the future, it will not be through a process that honors your legacy. It will be because someone revamped it and took it in an entirely new direction.
This isn’t to say that the machine of your business does not matter. However, as we’ve witnessed over and over in our work with business owners, those machines cannot create a legacy solely on their own, because they cannot change on their own. Humans are what bring innovation to machines, not the other way around. Humans are the only component of that equation with the capability to respond creatively when the landscape changes.
Creating Leaders Creates Value, Which Creates Legacy
By creating a leadership team with an ownership mindset, you can step outside of the company, and it will continue to run without needing your skills and leadership for it to survive and thrive.
It is no small coincidence that this also increases the value of your organization in the eyes of a third party. Someone else coming in who has interest in possibly purchasing your business is going to immediately understand that the business is worth more if it has been built with longevity in mind. Value increases if potential buyers know they don’t have to have the owner peering over their shoulder for five years. If you know that people are more important than the machine, then that transfer of institutional knowledge and business savvy will have already occurred.
As a leader, you have the option to structure your company so that it is about the people who run it, rather than the machine they run. The people around you will be able to feel the difference. And they will learn to trust you more deeply, which further opens up your options as a leader. As this process unfolds, your leadership team will self‐identify and tell you who they are.
Effective leadership is about managing change: anticipating it, reacting to it, moving through it, adapting to it. Navigating all of those elements of change successfully requires you to have built out a team of people you trust. The potential to do something great with your business machine will always depend on how it relates to the people who run it. When those tools work together in tandem with your leadership team, you are empowering your legacy to continue long after you are no longer around to protect its fate.
About the Author
Scot Hunsaker is the former CEO and owner of Counsilman-Hunsaker Aquatic Design.