The Ripcord Moment

Business owners are today’s American heroes. They innovate, they create jobs, they believe that they can CREATE a better future for their families and our country. So much attention is given the start of a business (the idea, the technology, and the fund raising). Yet much less to the exit – as if it will magically take care of itself. When they do exit the business, it’s a once in a lifetime event – there is no do over! Yet so many are ill-prepared to make the jump.The Ripcord Moment is a podcast focused on learning from those entrepreneurs and their team of advisors who have made the jump and sharing their best ideas with you. So when you are ready for your Ripcord Moment – you can execute and hit your perfect landing. Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your attorney, finance professional or accountant before implementing any transactions and/or strategies concerning your finances.‍

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The Ripcord Moment

Mandatory Succession

June 17, 2021 • Joe Seetoo • Season 1 • Episode 4

“It’s not just a business transaction – it’s an emotional transaction” - Chris Passmore, Managing Partner of Martini Partners - a Los Angeles Based accounting firm. In this episode, you will hear how Chris led the 2nd generation of owners and how his team navigated the challenges of their succession plan.

He talks about why identifying the next generation of leaders early on is critical for a successful G1 to G2 transition. It also requires a real investment on the part of the 1st generation to intentionally provide the 2nd generation with opportunities to lead and put their own stamp on how things are done.

Chris discusses how he and his team have shifted away from the idea of “Mandatory Retirement” to creating a culture centered around “Mandatory Succession”. From Chris’s perspective, this is not optional and it has to be part of your strategic plan in order to sustain the long term viability of the company. Chris credits the change in mindset across the firm and wide adoption of succession planning by all senior leadership as one of the main reasons for their success.

Chris dives into some of the challenges he faced in his new role including how he and his team had to overcome fear from his own staff of what this change would mean for them and the struggles some of the G1 owners faced as their identity shifted away from owner to something new.

Lastly, he shares his 2 action items for owners:

Establish the buy-sell agreement well ahead of the exit. According to Chris, it’s best to have the economic discussions and other items sorted out well before emotions get involved during the actual exit.
Start developing the next generation of leaders yesterday. The amount of time it takes to identify and develop these leaders is often longer than most owners anticipate.