Leadership changes create new opportunities (and new risks)
Every successful business eventually experiences a changing of the guard. The transition can come through retirement, a family succession, a management buyout, or an acquisition.
Whatever way it happens, decades of experience, relationships, and decision-making start passing from one generation of leaders to the next.
These transitions are going on every day across Canada. Most are positive. Many create exciting new opportunities for growth.
They also change relationships.
That’s something business leaders easily overlook.
Canada Is Entering a Historic Transition
Canada is in the midst of one of the largest business ownership transitions in its history.
Thousands of entrepreneurs who built their companies over the past 30 or 40 years are fast approaching retirement. Some businesses will stay in the family. Others will get sold to management teams, competitors, employees, or private equity firms. Many will welcome leaders with fresh ideas and totally new perspectives.
For owners preparing to hand over the keys, succession planning is naturally top of mind.
And for everyone who does business with those companies, another question deserves attention.
How will that transition affect the relationship?
Relationships Don’t Transfer Automatically
Business relationships are built over time.
You learn how your customers make decisions, and understand their priorities.
You come to know who signs the cheques, who approves purchases, and who appreciates a phone call before an invoice becomes overdue.
Then one retirement announcement changes EVERYTHING.
The relationship may not be broken.
Yet it’s suddenly completely new.
The trust you’ve built probably still has value, but every new leader arrives with different experiences, different expectations, and different ways of running the business.
Like any new relationship, it deserves your attention.
Every New Leader Brings New Priorities
Great leaders constantly look for opportunities to improve the business.
That may include new technology, new reporting systems, different approval processes, tighter cost controls, revised purchasing policies, or changes to supplier relationships.
Those decisions can often be healthy for the business.
They also affect everyone connected to it.
Invoices may follow a different approval process. Payment timing might change. Purchasing authority could be assigned to someone new. Long-standing informal arrangements can disappear in favour of more structured policies.
None of those changes should hit you as a surprise.
Every leadership transition brings a fresh perspective.
Treat Leadership Changes Like Credit Events
At MetCredit, we’ve long encouraged businesses to review customer accounts periodically because companies evolve. It’s never been more the case.
A change in ownership or leadership is one of the best reasons to do exactly that. It means the customer you’re selling to may not be the same business.
Take the opportunity to:
- Confirm ownership and key decision-makers
- Update accounts payable and purchasing contacts
- Review signing authorities
- Revisit credit limits where appropriate
- Introduce yourself to new leadership
- Learn about any changes that may affect your relationship
These conversations are vastly easier while everything is going well than after an account becomes overdue and tension is inescapable.
Your Own Transition Matters Too
If you’re preparing your own succession plan, remember that you’re handing over more than a balance sheet.
You’re passing along relationships that may have taken decades to build.
Customers appreciate continuity in a big way.
Introducing new leaders early, creating opportunities for shared meetings, documenting institutional knowledge, and communicating openly throughout the transition all help preserve the confidence you’ve earned over many years.
A successful handoff allows customers, suppliers, and employees to move forward with confidence rather than uncertainty.
Every Business Is a Relay
I’ve often said that growing a business isn’t a sprint, but a marathon. These days, more and more, we’re seeing it become a relay.
Different leaders are needed at different stages of a company’s journey.
The same idea applies to business relationships.
As the baton changes hands throughout Canada’s business community over the coming years, every company will have opportunities to strengthen existing relationships while building new ones.
Businesses always change.
Leadership changes periodically.
Strong relationships continue only when we invest in them. That’s a lesson worth carrying into EVERY handoff.
