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Moving to a Successful Succession, The Language of Transition

by on November 23, 2014 6:00 AM

Nearly two decades ago I started asking myself the question, "What is a business?" the question arose during a conversation with my lawyer as I wrestled with my last will and testament, the document guiding my executor in disposing of my assets according to my wishes.

I had at that point in time spent many years building my business reputation as an investment advisor and I was now involved in the question of passing on my life's work.

I owned a small business with revenues of less than a million dollars per year, a loyal customer base and great employees. I had a commitment to myself, my clients and my employees to continue the operation not only as long as I was able, but also long after that.

Unlike many business owners, I had the opportunity to study linguistics with a Berkley professor through an organization called Business Design Associates using a process called the Ontological Design Course, or ODC.

From a linguistics point of view, a business is a set or series of committed conversations moving through time. Committed conversations are the fulfillment of promises and requests from and to clients and employees and a set of declarations about the future of these conversations.

Quite different from the accounting or management points of view about what a business consists of, my linguistics point of view gave me a clear path to answer the question of what I want to do with "my" business as my abilities diminish and I eventually pass away.

Assets (money, real estate and the collection of things I find useful or dear) can easily be passed on to my wife or the next generation. I suspect that the next generation will spend a lot of time sorting and ultimately throwing out the stuff I thought was important.

The business, however, is a very different entity, that requires people committed to continuing the conversation of the business even as my commitment wanes. Aging is a process of changing focus and commitments of life. Careers become less important while the spiritual side of life grows in importance. You all know the saying "you can't take it with you." Material things become less important, while taking care of the concerns of others seems to grow in importance.

Succession planning, from a linguistic point of view, is a process of determining who is willing and able to continue the conversations that define the business that I "owned." Even the term "owned" somehow seems wrong and is more like having temporary stewardship of or a responsibility to those around me now and in the future.

I was fortunate to find that person for my small business and to assure as best that I can that the business will live long after I am retired to Pine Creek and eventually, inevitably, to Forest Lawn. My business was not something I truly owned. It was something I was allowed to take care of and ultimately pass on to the next generation.

So if you are a business "owner," the president, the chairperson of the board, or whatever -- consider what you have, your responsibilities and your succession plans. My succession plans began in my early fifties and now that I am approaching 72, they are being successfully implemented. As I move deeper into retirement, I am at peace with my commitments and those who are carrying them on after me.

When I was in high school I learned not to overstay my welcome at parties. I like to think that, in a way, I'm avoiding overstaying my welcome by knowing when to pass the baton to the next "owner" as I move on to whatever is next. The transition has been seamless and smooth. It doesn't get much better than this.


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Dan Nestlerode was previously the Director of Research and Portfolio Management at Nestlerode & Loy Investment Advisors in State College. He retired in 2015 after 50 years in the investment business. A graduate of Penn State University, Nestlerode became an investment advisor in 1965. He can be reached at [email protected]
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