I just got back from a conference in Miami where Tim, (my dad) the president of Palo Alto Software, and I, the CEO of Palo Alto Software spoke on succession strategies. As Tim and I planned our talk, and discussed how to involve the audience in our story, I felt that Tim had more to say than I did. He has written a few blog posts on the topic, most recently on his Entrepreneur blog, "6 Tips for Involving your Kids in Business." But as I thought about my ideas about succession I felt like I was ready to have my say.
If you search online for "succession strategy" you will find plenty of content that discusses the most successful strategies for passing on family owned and closely held private companies. The NFIB has an article that neatly outlines the 10 strategies for successful succession. Adviser Today has another article on how CPAs can help their clients plan for succession. Most of these articles advise the business to put together a comprehensive succession plan which should take place over an extended period of time in order to ensure the greatest level of success .
As I read the articles and blog posts everything makes sense -- but it is NOT the experience that I have had here at Palo Alto Software. I started working with Palo Alto Software about 6 years ago. Of course because this is a family business I have been intimately involved with the business since it started about 20 years ago. But I did not come on board and officially work with Palo Alto Software until 6 years after I graduated from college. When I did come on board I was very conscious of the fact that my father owned the business, and that perception among employees would easily be that I had the job not because of my experience, my talent and my drive, but because of my family ties. I worked very hard to prove myself - trying every step of the way to exceed expectations among employees so as to earn my place. Meanwhile, although sometimes difficult, I also let my dad be the boss.
Since 2001 when I joined Palo Alto Software, as Director of Marketing Communications, the company revenue has grown 25%. We have expanded our online reach and continue to release new products and content to help people succeed in business. We are about to release a brand-new very exciting product that should expand our reach in the small business market. The company is in a really good spot right now.
But when Tim decided last April that the time had come to step down - it was a surprise for me and for everyone in the company. We had discussed succession casually, and had talked about how we might do it, but I thought it was a good 2-5 years away. You could say that we were embarking on a recipe for disaster- no real detailed plan, and a transition that happened from one day to the next. I am sure succession experts would cringe to hear how we implemented our succession.
But it worked! And here is why:
- Tim was ready
- Tim is not retired. He is still the president but focuses on being the resident planning expert. He writes on over 5 blogs, he speaks all over the world on planning, and he gets to do what he loves best: be the expert!
- I was ready
- Noah, the newly appointed COO, and my husband, was also ready.
- Noah and I are a very strong team. We each bring different strengths to the table and have worked closely together for 9 years.
- Palo Alto Software is embarking on a new era with some new technologies and products which Noah and I are very familiar with. We belong to the first true web generation and both started our careers in the Silicon Valley in the dot com boom in 1996. We feel we have the experience in web technology to take PAS to the next level.
- Tim is not retired. Did I say this already? He comes into the office everyday, and is an integral part of our company social media strategy. What he does today is a key part of our marketing strategy.
- Because Noah and I have both been with PAS since 2001 the employees know us, trust us, and believe in us. They know that we live and breathe this company and that we will work as hard as we need to to keep PAS healthy and growing.
- Tim was ready. Yes, I know, again I am repeating myself. But some points are worth repeating. He truly stepped aside last April and has truly let me run the company. He is still available for advice, and still is intimately involved in the company, but he does not make decisions on strategy, budgeting, product direction, etc. He truly passed the torch happily and has been a pleasure to work with. There have been no power struggles between the 2 of us.
Stay tuned to see where PAS goes in the next 5 years!
-Sabrina Parsons aka Mommy CEO