Stephen Shortt | Succession Planning and Strategies for Running a Successful Family Business

John Corcoran 12:32

if that was the case, I mean, was there a point? Was there a point where they, your parents sat you down and said, All right, you’ve you’ve put in your time, we’re convinced now that you could take over this business one day. And so let’s talk about you taking over this business one day.

Stephen Shortt 12:48

Yeah. So what used to happen more often than not, though, especially when I was a bit younger, was, Look, we’re not just going to give you this business, I’d rather sell it and let the people and look after the people that are in the business than just give it to you to flit away. And that was very much driven into me that you’re not just going to be handed this business, you got to earn it. And then I took on more things, I took on more responsibility. I went and did more courses and kind of proved myself at different levels, which got frustrating at a time, but at the same time, it was also building me up to be the entrepreneur that I am, then we had a conversation then. And so I bought both businesses. So I bought the shares from my folks. And so we had conversations about that. And I kind of drove that I engaged with the legal teams with the tax advisers and everything else. Now, if I didn’t, if we went out on the on the open market, my folks probably could have gotten more money for the for the company. So I got a I got a good deal if I’m perfectly honest. But I’ve showed them that I’m putting my skin in the game I’m I’m interested in I’m not just going to wait and have this handed to me, I’m going to make sure that I have vested interests, and they were paid off over a number of years as opposed to a big lump sum because again, it wasn’t for them to maximize their return it was for them to make sure that I was serious about this.

John Corcoran 14:16

So was there a co ownership and CO management period with your parents where you were kind of both partial owners and whatever proportion and partial managers. So

Stephen Shortt 14:29

there was a time where it was 25% 25% 25% 25% Between myself my father, my mother and my sister My sister is not involved in the business. And then over time I bought out my parents. My sister is still technically an owner of the business and I have no interest in buying her out I’m she’s she’s not involved in the business but she’s involved like she’s on the board. She she does bits and pieces in the background and is supportive and it’s a family business. Got it. There were times when I’m When it was a bit frustrating, and I would have arguments, I’d be like, we need to be doing these courses, or we need to be investing in this technology. And it was a bit of a risk. And my parents were a bit more risk averse. And I’m saying, well, like, I own just as much of the business as you do, and then the two of them would go, Well, no, not together. And so it does added baggage that comes with that. But one of the great things about having these kinds of discussions and arguments for want of a better expression of family business, you can actually have these arguments with the best interests of the other person, as opposed to just trying to win and just trying to get the ego. But it also, I suppose, forced me to make more business rationale behind all of the arguments, and we need to invest in this because x, y, and Zed and be able to kind of test out my theories a little bit more and be a bit more robust in the arguments. I I’d say I won most of the conversations, some of them, not so so easily. But then the day I bought them out, and I was the the owner of the business, essentially, I remember trying to tell my parents what to do that day as a joke. Getting they laughed, but they don’t know I went over really well. They laugh, but they laughed in a way of telling me yeah, nice try. But no.

John Corcoran 16:20

So it didn’t slip in, like take over and then all of a sudden, they’re following your marching orders?

Stephen Shortt 16:24

No, no, not at all. So I mean, in my talk, I talked about the beginning of it. And the reason that this is important to me. I nearly left. While even through this process, even while I had already put some money in it was just it was proving to be impossible. Because we I want I was looking at the further down the line, they were risk averse, that we were having different conversations, I nearly left the business. And that’s when I started down this road of actually figuring out okay, how I can’t be the first person to have this problem like that in the history of the world. In the history of family businesses, there’s no way that I’m the first person who’s arguing with his parents, business,

John Corcoran 17:02

and other resources that you turn to in that period of time where their books were their coaches were their programs.

Stephen Shortt 17:08

There were books, which were a little bit academic, if I’m honest. And I’m not an academic person. So I found some of them a bit dry, some of them a bit statistically, I actually picked up the phone, I rang a few people, I got reached out to some people in my network who were in family businesses, some that had left family businesses, because they hadn’t been able to get this some who had kind of good relationships. But one of the things which is I suppose lucky and unique about us is that one of our businesses is about psychometrics and personality profiling. So we’re able to actually discuss this on a personality level and and really objectively see, well, you’re seeing things like this, I’m seeing things like this, this is where the attention is lying. So if we can address these things of, okay, you’re risk averse, and a results leader. And I’m more of a kind of a social leader and more tolerant of risk, because I have a longer view time on this. How do we get a middle ground on this? And how do we understand where the other person is coming from so that we can find a path out of it. So that was that was very, very useful and doing things like making sure that we actually had some separation in the family time that when we were having meetings about the succession side of things. And when we were having discussions about what the next steps were, for the business, it wasn’t necessarily in either their offices or in my office, we were out somewhere neutral, it wasn’t a power thing. We would also make sure that we actually went to the theater or to a rugby game or to something else. Actually, his family and you found

John Corcoran 18:44

that was a better time to talk about these things.

Stephen Shortt 18:50

And not to get the hackles up, because one of the things that I found and I kind of was guilty of it as well. I took there before I was really looking at it from a personality point of view, I was taking their risk aversion, almost personal I call they don’t trust me, actually, they do, but they have a hell of a lot more to lose than I do right now. So having that self awareness in myself, and understanding where they were coming from, really gave me a lot more clarity over what the next step should be. And maybe my impatience was a big part of where this problem was coming from. And maybe I needed to just take a few more steps to get to where I wanted to, because ultimately, that’s it’s where I wants to get to, but I needed to bring people along as opposed to drag them along.

John Corcoran 19:41

It sounds like every family business could benefit from that kind of psychometric understanding and testing analysis to understand the kind of what’s driving their behaviors and the way they interact with one another.

Stephen Shortt 19:56

Now I have, I mean, we do a lot of personality profiling. We do lot of assessments, but to this day, I have not been brave enough to do a personality profile on my wife

John Corcoran 20:08

worried about what you might find,

Stephen Shortt 20:10

worried, worried that she might not like what she sees in me. So yeah, that’s the thing. Got it. Yeah. So yeah, I mean, it was really useful, really beneficial, but also part of this the five P’s that I have this thing called the five P’s of successful succession. And what’s the purpose is the very first one, the first P is purpose, like, what are we actually aiming to achieve. And it’s really common. And it should be really common, that the current generation have a shorter definition of purpose, maybe five set depending on where they are maybe five to eight years out. Whereas the next generation should have a much further vision of where they’re going. And we need to get those where they overlap, we need to get them to align. And that’s the that’s the key and all this I was thinking too far down the road. And willing to take risks and ups and downs to get there homie folks were more process orientated and more process driven to get to that end goal.

John Corcoran 21:09

I’m interested based on what you just said, I’m interested to hear what you say to this. So for a long time, I’ve kind of thought like, I don’t want my kids at all to go into our business. for variety of reasons. I felt like, Okay, well, they should, you know, stand on their own. If they want to create a business, they can create a business, the way that you frame it is interesting, because you really saying they need to prove themselves first, that’s fine. But what’s your strongest argument for why the next generation should go into

Stephen Shortt 21:39

the family business? So here’s, here’s a thought experiment for you on as a succession planning consultant, or whatever I would challenge people with, actually no family members should join the family business, the family business should join the family member. Because we have 20 to 40 years stewarding a family business. We’ve all seen in the last even in the last two years, I mean, how businesses can pivot and need to pivot. And just because we were doing something 20 years ago, doesn’t mean we need to be doing it in 20 years time. If you’re able to see as your kids are growing up like these, these are their strengths. These are their interests. There’s some parts of the business where we can they can align with what we do. But there’s other parts that yeah, maybe maybe they don’t. So let’s say that your your business is let’s say it’s it podcasting, social media, content creation, this kind of thing. You do a little bit of keynotes, I think do me. Okay. So let’s say let’s say the kids are growing up on, they liked the content side of things. They liked the podcast and like the interview side of things, but they actually are a little bit more, let’s say extroverted, and like the types of people who do keynotes like me, who wants the fame and attention. Yes. That’s not currently what your business does. But it is very easy to start adding that as a as a part of the business, which is something which is of interest to them to them. This is what I call an inside hustle. So we’ve all heard of side hustles, where we go off and we use something to pay for the holidays, or pay for the car or whatever. But if we can build something within our business, where our next generation have the ability to use the resources, the business, understand the culture, understand the intricacies of the business, they build a side hustle and inside hustle that can either be a bolted on to the business, if it becomes really successful, actually, it can become a core part of the business and may become the core part of the business. If it doesn’t work, okay, we can leave us die off. We’ve invested stuff. And we do a full port post mortem. What did we actually learn from this? What worked? What didn’t work? Why didn’t the gel with the culture? Could we learn something else? So when I had the language school, I we did these two examples that I give people about this, we used to run summer camps. That’s actually how I learned how to run a language school and how I learned to manage things because it was only for the summer, when we sold a business that accounted for about 25% of our overall revenue those two months of the year. So it was it became a really big core part, even though it was a small thing to start off with. Another one we tried was online learning. We were way ahead of the game in this so we were running freemium classes. It didn’t we didn’t. We didn’t give ourselves enough runway we got a bit burnt out. And we dropped it after a couple of months. But what we learned about online learning about digital learning really helped us to be at the forefront of digital classrooms, online classes, blended learning and teaching other people how to use technology in the classroom. So we were able to take a lot of that in so that was two kinds of inside hustles one which became really important one which we just learned from Hmm, so that’s a way that we can get the next generation so your kids for example, what are they interested in? What are their natural what’s their person? Not only like part of their aptitudes, what are their interests? What what areas of the business? Do they like? What do they not like? And how can we look at shaping that business? And now for the next 10 years, altering the course you at the helm, altering the course a little bit to actually match them on their trajectory.

John Corcoran 25:17

Thank you. That’s great answer. So speaking that altering the course of the trajectory of the business, so one of the decisions that you made was to ultimately sell off the English language school

Stephen Shortt 25:29

to sell third child. Yes, yes. Yes.

John Corcoran 25:32

What was that one? Like? I mean, how did you broke? How did the How did the parents feel about that? So that

Stephen Shortt 25:41

was, and that was where I spent most of my time. I mean, my 9080 80% 85% of my time was spent on that business not on on this current one. It’s where I did all my travel, my marketing, met, all the people that I met, got to have the amazing experiences I had. And then with a lot of support from my forum, and EO and people who, who helped me kind of put some stuff in place six years ago, now, no, five years ago, we moved to Madrid for a year, my wife was Spanish. So we, we always had when we had kids we wanted to live in Madrid says they are in Spain, so they understood both sides of the culture. And when I was there, I spent a lot of time when I wasn’t in the day to day hustle and bustle of the school, I spent a lot of time figuring out my why. And that’s where ultimately, the Aspire and empower came from, and having that as my clarity. And it’s really at that point, when I realized that I’d done everything that I wanted to do in the language travel industry. And the only way to grow was to be less entrepreneurial, it was more a bit of a race to the bottom in terms of price, people weren’t as as keen on quality as they once were, because they want the cheapest course to be able because they didn’t see a difference in a differentiator, even though we had spent a lot of time doing it. So I felt that the only way to really grow was to start replicating what we did and become a chain or franchise and, and setting up new places all over the place. And I knew that that wasn’t for me, that’s not my personality. It’s not the way that I operate. It’s becoming more rigid, more process driven. And I’m not a process leader, I’m, as I said, I’m a, like a thought leader, social leader and a people leader. So I’m more entrepreneurial. So we said, right. So I said, right, look, I’m, I’ve really done everything I can in this industry and everything I want to do. And I had to make some really strong good arguments about the future of the industry, again, defending these concepts that I had, about the way that the industry was changing, where it was going, what that meant for us what that meant for our team, what that meant for the business. And it took a good six to nine months really to, to convince my folks that my projections were already starting to come true, we could see the fruits of what was going to happen. And then COVID accelerated like everything I said was gonna happen really started happening. And we said we would sell it took us a long time to sell, I would

John Corcoran 28:08

think especially, you know, a business that dependent on people traveling, coming in person and doing things in person does that mean direct selling a drink.

Stephen Shortt 28:17

There are a lot of players. There are an awful lot of players in the market. But it was just through the that’s a whole different podcast process of, of selling. And for the team, it was the it was the right move. Some people stayed some people left. And it was it ended up being a bit of a culture shift because it was going from a small family business to part of a bigger corporate entity. Some people thrive in it, some people found it too difficult to be able to make that leap. But the students were happy. The staff we stayed are happy. And I have a very good working relationship with the people who bought the school I still am in contact with them fairly regularly, still in contact with a lot of people from the industry and really enjoy and want to see the industry do well. Because I spent a lot of time in the industry. I got an immense amount from the industry and I have a lot of friends in the industry.

John Corcoran 29:15

Hmm, yeah. So to talk a little bit about the how that shifted your focus then when you you said 85% of your time was spent on that business. That’s obviously freeing up a lot of your time. And then how that kind of shifted your focus and focusing on ETC Consult.

Stephen Shortt 29:34

ETC Consult, we are we distribute a lot of books and tests for different publishers, psychometrics people who need to have specific qualifications. We sell into schools, special needs places, hospitals, the health service, psychologist, things like that. But we also do a lot of training in person we do career guidance in person. We do interview skills training in person. We do we don’t do We haven’t done a lot of facilitation in person. But that was something that I wanted to bring to it as strategy consulting and, and now the Focus on the Family businesses with this successful succession stuff. But over COVID, so we had a program, which was a pen and paper program, which was really innovative, but limited with pen and paper, which helps students of all academic backgrounds be able to get an idea of their career path. So we will be able to show them what types of careers that they’re best suited for. Then through COVID, because I mean, I, we sold the language school in my last day was the sixth of December 2019. So pretty soon after coming into full TTC COVID, decided that I needed to spend a lot more time at home, so. So through COVID, we actually rebuilt the entire program from the ground up. So now we have a program, which is unlike anything else in the world where you can have a student in years, anyone from kind of 1516 years of age up, can do a series of tests on your verbal skills, your numerical skills and your abstract reasoning skills along with a modern interest inventory. And we will collate and go through our so we’re 100% criterion referenced instead of norm based. And we’ll give you a report with 16 careers, very specific careers based on your unique mix of abilities and interests. And each of these careers you will enjoy doing and be good with a description of that career and how to go about getting into that career. So we’ve spent our most of our COVID building that we’re also productizing, the one to one interview skills that we do, we’re turning that into a video on demand service and doing a couple of other things like that and trying to, to really take what we’ve done in the past, which is the family business and what this business did. But using my interest using my abilities and my skills that I’ve learned in the other industry, and also through to through different things that I’ve been involved in, adapting that. So the business now, and in two years time will look very different from the business that my parents ran for 20 years. But it’s still the same business, it’s still the same core ethos, it’s still the same core products just delivered in a different way with a different focus on a different angle. And that’s why I think it’s really important to allow next gen enterpreneurs to be entrepreneurial, but with a head start.

John Corcoran 32:35

Hmm, that’s great. Well, we’re almost out of time. I want to wrap up with my last question, which is my gratitude question. I’m personally a big fan of expressing gratitude, especially to those who’ve helped you along the way. There’s been a lot of people that have helped you along the way. Obviously, your parents you mentioned your wife, who would you acknowledge publicly?

Stephen Shortt 32:56

Um, so yeah, I mean, this this, I know, you you asked us about you don’t really want the parents and the team and all that because

John Corcoran 33:02

it gets I’ll make an exception in your case. Because I’ve

Stephen Shortt 33:05

grown up in a family business. My parents actually have been mentors to me through the business. And I’ve learned an immense amount from them. Through yo have meant meant a lot of people Carl Funker was and still is to this day, my mentor and I still I’m able to ping him and lean on him for advice.

John Corcoran 33:24

Because a few weeks ago great guy. Yeah.

Stephen Shortt 33:27

Carl’s a fantastic album, and he and Angie came to visit us when we were in Spain, they’ve been to visit us in Dublin, we’ve been over to see them and Munich is brilliant. But also so there’s I was lucky enough to be on the first Regional Leadership Academy. And there I met Michael, lots in cricket, or lotsa, as everybody knows him. I met him once or twice before, but it’s one of these things. And if you’re any Oh, you know how that I mean, you know how these things happen, like you’re at an event and just whatever way somebody says something, it can really resonate. And we’ve been having a couple of days of really intense leadership, very experiential stuff, leadership, training, leadership, thought, exercises, and really developing our interest in our skills. And he turned to me just in a moment when I needed to hear it, I suppose. And let’s I said like that I need. I can’t remember exactly the phrasing. But it was I was left with a profound sense of here’s somebody who I really looked up to who thought that I needed to believe in myself more and actually stop doubting myself and go for it. And it had a massive impact on me. And I’ve met him a number of times since even through through COVID and all these other things. Just before COVID And I I thank him every time because it has really made an impact. That little comment made a huge impact on my my mindset in that time.

John Corcoran 34:49

That’s great.

Stephen Shortt 34:50

Lots of great, great audience. Huge yawn is enormous. He’s so tall.

John Corcoran 34:57

I’m just thinking of our writers writing up this Show notes afterwards, I have no idea how to track this guy down. Let’s all it will be about the Google.

Stephen Shortt 35:05

So let’s say is it l you with the owner of T said E is his nickname?

John Corcoran 35:11

Okay, perfect that that helps. All right, Stephen, where can people go to learn more about you and all the various different projects in your upcoming podcasts,

Stephen Shortt 35:20

everything will be on That’s where we’ll have. So there’s a white paper we’ve just released. We don’t have so that next gen entrepreneur Academy is in kind of private beta at the moment, but if you go to next gen entrepreneur That will bring you to the right page on our website with a little bit of information about that. And the podcast will be there as well. So will have everything.

John Corcoran 35:43

Okay. Thanks so much. Pleasure.

Stephen Shortt 35:46

Thanks so much for talking to me.

Outro 35:48

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