As published in the March 26, 2012 edition of Crain’s Chicago Business.

Harry McCabe — Tue, 17 Apr 2012 21:48:51 +0000

“Private business owners must continue to be “educated on the need for succession planning” as well as “the need for a second-generation development plan… … the C-level executives to surround (the successor owner) and lead (the Company) into a stable future. The senior-generation key executives who have left should have groomed their successors. With new personnel in place, the potential for a serious hiccup should be minimized.”

Harry M. McCabe,
Exit planner; succession advisor

Play Ball

Harry McCabe — Tue, 17 Apr 2012 05:13:44 +0000

The start of a baseball season begins the annual statistical pandemonium. Now a comprised way to follow the game, movement from the basic: runs, hits, batting average and pitcher winning percentage. New, available information include: on base percentage, hitting percent against lefties or righties, wins for day, night and interleague games. For the pitcher we must know the pitch count, innings pitched, and era.
All of this information is available instantaneously for the life time of the game and must be broken down by such detail for preseason, regular season, and post season!
I’m not complaining, but I question when it will track the wind speed and direction. We could also add the statistics on the family tree for generations. Finally, baseball is all about a love a game, isn’t it?

Matured son still learning…

Harry McCabe — Tue, 13 Mar 2012 16:25:02 +0000

Bill, age 45, has been shielded for advancement in his Family Owned Business. Longevity of employment and a solid family life added to his maturation.
Bill’s father has studied Bill’s progress in this multi-generation family. Bill’s father has promised to pass on the company ownership to Bill when dad is ready. Perhaps dad is blocking Bill because he will not let go of ownership?
Bill graduated from college with honors in mechanical engineering, received two certificates in the computer field and has been working in the businesses IT department for the past 20 years. His performance and quality of work have been faultless.
Seven years ago he was promoted to Chief of IT, responsible for all technology support for supply chain management, manufacturing of the companies’ four product lines and inventory control. Additionally, Bill integrates information across the other functional support departments with implementation of software and training. His department constantly receives industry awards for accomplishments and has been recognized by his peers as the future leader of the organization.
His dad, however, explains “Bill lacks vision”. He shields Bill from further maturation in the business. Bill receives offers from other companies. His leaving the company will create tension in the family and this type of action could jeopardize the future of the company.
My suggestion: have Bill attend the Board of Directors meetings as a guest to observe. Colleagues in in the field of Family Business Advising endorse this training technique. After Bill learns governance and additional leadership skills, he should become a member of the Board. Dad will then be able to observe Bill’s contribution and vision. This will expedite the companies ownership transference plan as dad can start a gifting schedule. 2012 is the right time to transfer shares of company stock to Bill as the $5M gift tax exemption will be adjusted next year.

Budget time for the State of Illinois

Harry McCabe — Tue, 14 Feb 2012 18:04:28 +0000

After thinking about the budget for the State of Illinois, I concluded that this is not all about a balanced FY 2013 budget. It’s “How much deeper can our state deficit get?” The figures are staggering: $9 Billion backlog of unpaid bills; $83 Billion in unfunded pension liabilities. We’re adding in interest payments on the outstanding debt and issuing new bonds to fund this year’s budget deficit at higher interest rates (due to our poor credit rating). In my opinion, the cuts in spending should be across all of our government’s boards, commissions, departments, systems, agencies, etc. in order to improve our fiscal status.

Never, Never Quit

Harry McCabe — Wed, 07 Dec 2011 17:30:10 +0000

We have come though much in this past year in spite of the continued volatility in both domestic and global economic markets, the growing number of Occupy Wall Street and other civil-discourse movements, etc. We have definitely “come through” – because we have not quit. What’s not always reflected on the various news sites, written about in business or political blogs, or touted by the pundits is our continued resolve and sheer determination as Small, Mid-Market and Privately Held business owners to hold on, to make it, to thrive. Thankfully, as business owners, we do have the ability to choose to increase certainty and reduce uncertainty in areas of our own businesses. This extends perhaps most importantly to considering a succession plan for transferring a business ownership when the time comes. Never Never Quit. How do you or those who care about you feel about that? How can you make yourselves ready when the time comes? Make 2012 the year you put a Succession, Exit or Ownership Transfer plan in place for your business.

Less socialism

Harry McCabe — Tue, 25 Oct 2011 15:30:08 +0000

Should all Americans over the age of 70 stop taking Social Security annual increases?

Can this senior generation set the example for the Baby Boom generation?

Shouldn’t legislators’ pensions earned from public service be dissolved?

Would government employees fare much better if they fund their own IRA’s to supplement their retirement years?

Jobs and the Small Business Commitment

Harry McCabe — Mon, 26 Sep 2011 21:00:23 +0000

The popular perception that small businesses create most of America’s jobs has been the focus of heated debate for three decades. However given that the rise in unemployment has been nearly proportionate to the declines suffered in the small business sector, the “perception” is increasingly proving to be a reality.

The back story is that this depression’s job creation crisis rests not so much on Government, but more so on the shoulders of family business owners. As a result we need to continue the viability of these small and midsize enterprises to create jobs and concurrently must support the new entrepreneur style business creation. This is imperative to job growth and spurring business innovation & economic recovery.

Son/Daughter Ownership

Harry McCabe — Thu, 25 Aug 2011 15:44:02 +0000

I want to pass the business on to my son/daughter. What are the potential pitfalls of this strategy, and what can I do to smooth the transition? Many. Here are my top three:

1. Sibling rivalry (those in business and those not)
2. A 50% split of ownership at the children’s level can lead to turmoil
3. The offspring most likely cannot run the business, or doesn’t want to

More Thinking

Harry McCabe — Thu, 11 Aug 2011 17:50:23 +0000

When is the best time to start thinking about an exit strategy? An annual goal setting brainstorming session may be a good time to start thinking about your plan.

Implementing Succession Planning Model

Harry McCabe — Tue, 26 Apr 2011 18:15:44 +0000

My step five of the 7 Steps to Succession Model concerns Sons and Daughters of business owners. I surmised that it was due to an ever-shifting, real-life daily challenge for young adults to fill their father’s shoes and never quite got it right. To make matters worse, their parents continued to place higher and loftier goals on them and still continued to critique their actions. Both generations need to be cognizant of this. I recommend that the senior generation pare back some of its branches, pruning some of its responsibility, and allowing enough sunlight to reach the offspring so he or she can grow properly. This trimming activity might need to be a large wedge carved from the branches of the tree, allowing both generations to stand tall side-by-side.