Interview with Elizabeth Ledoux, Owner of The Transition Strategists

Elizabeth Ledoux is the founder and CEO of The Transition Strategists, an international consulting firm that creates business succession plans for family and private businesses. One hundred percent of the owners who have used her company’s proprietary Transition Roadmap Developer™ to choose and mentor capable successors have positioned their companies for ongoing success and moved forward to live happy and meaningful lives.

With a career spanning over 30 years, Elizabeth has helped hundreds of business owners navigate the complex dynamics that come with business shifts. She works with individuals and families who share her belief that a business transition is only successful if it protects and supports an owner’s most important relationships.

Elizabeth is an entrepreneur who has founded several businesses, a thought leader and sought-after speaker, addressing the topics of business succession planning, challenges and opportunities in private and family business transition, business and individual growth, and the business succession journey. The Harvard Business School has recognized Elizabeth for her work linking the growth and development of the entrepreneur to company success.

She is the host of the podcast Business Transition Roadmap and co-author of three books, including the award-winning It’s A Journey, The MUST-HAVE Roadmap to Successful Succession Planning, (Sky to Sea Publishing, 2021). 

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About Steven Denny: Steven Denny co-founded Innovative Business Advisors in 2018 and serves as a Managing Member of the firm. Steve has been actively engaged in M/A activities in a wide variety of industries for the last 14 years and has developed specific products to assist clients in growing their profitability and enterprise value. His specialty is working with established private companies in the lower middle market with annual revenues from $1 – 50 million.

Transcript

0:02  
Welcome to the You Don't Know What You Don't Know podcast by Innovative Business Advisors. Successful business owners who have started, grown and led businesses share their journey and direction for the benefit of those traveling the same path. All right, folks. So today we're talking with Elizabeth Ledoux. Elizabeth is the business owner and founder of The Transition Strategists, which is an international consultancy offering transition and succession planning strategies primarily for family and private business owners. She's also an award winning author. She's a civic leader and wife to an amazing guy who happens to fight forest fires from a helicopter. So Elizabeth, great to see you, and I'm so honored that you agreed to join us. Well, thank you for having me here, and it's great to be here so. It's my pleasure. Listen, you've been helping business owners, I know, for more than 25 years now. So I'd like for you to tell me a little bit about the moment you guys decided to shift your business focus to transitions.

1:07  
Yes, so gosh, I'll give you a little bit of history. Many, many years ago, I started working with business owners trying to help them to transition. So I was in the build and grow side of consulting, and decided that it would be great to help business owners figure out what's their next adventure, how are they going to hand this business off to a next generation that can actually take it forward? And what I found is one of my passions in my personal life mission, which I built about 25 years ago, is to help communities thrive and whether it's a community inside of a company or it's the greater community that the company serves, just helping that business and the people inside of it to continue to live great lives. So that was really, Steve, the time when I decided to move more into business transition. Because, you know, the statistics on business transition are not good. They're not in the favor of the, of the business owner transitioning, right? No, no. They are not in, they're not in the successor's favor. Yeah. Usually, usually, the business gets transitioned, and actually probably two out of three of them don't do well and they end up not making it. So decided that changing that statistic would be a big deal, not only for the business owner and the successor and all the employees, but also for all of the customers that it serves, and then the community. Because what I've found with private business owners is they are generous. They like their, they like where they live. They give to soccer teams and churches and,

2:57  
gosh, food banks and serve on boards. They're just, they're very integrated into their communities, so deciding to help the businesses continue, which would then help the community to thrive forward. So my shift, yeah, my shift was, was then when I really wanted to make that happen and change that statistic. And for the for the listener's benefit, I encourage them to go out and do a little investigation. Go to go to The Transition Strategists with a plural, with an S on the end of it.com, learn a little bit more about you, and then that'll link over to some of your other really cool tools that have helped businesses grow for many years. So, I was always one of your biggest fans in that regard as well as you well know. So, I thought the Entrepreneurial Flight program was just genius and, and you've created such a track record of success for your clients. It's, it's only natural that they would rely on you as as they elect to make a change and and step into the next adventure of their life. So, pretty cool. Thank you. What, what makes your business special or different from others that are doing this kind of work? Ah, yeah, thanks for asking that. It's, it's at times kind of hard to understand, but I'll give you again, kind of the story behind it. Because when I first started doing transition work, what I found is what was available out there really started with the how and how much. So, and I love smart advisors. So, you know, nothing against CPA, lawyers, all of those people, and they're amazing at the how and how much. And what I found is

4:46  
the the concept of putting people first and actually figuring out what you want as the owner, helps you to not get so confused in the how and how much. So, so, what makes us different is

5:00  
we start with people first. And that's one of our foundations is to help owners understand at a very early time, maybe 10 years before, or five years before, three years before they want to transition, what are they really trying to achieve? What would be their ideal next adventure? How would they like to live their lives? Who would they like to honor? How would they like the business to thrive forward? Is the culture in the business important? What would they like that to look like and how would they like it to serve the community again? So, by putting some of those things first, then what we're able to do is help them see clearly the how and how much, and have a better conversation with their CPA, their estate lawyer, their business lawyer, and even the successors that they're inviting in. Because when, when you go and you invite someone into your you know, Hey, would you like to be an owner? Most people say, Sure, that sounds really good until they figure out how much money it's going to cost, how they're going to pay for it, you know, taxes and all of the other pieces that go into it. So the invitation is, it's very important, and you knowing what you want as an owner is important. So that's kind of how, that's what makes us different is we start in a different way so that the owners can

6:31  
be clear long before they ever transition, and long before they ever are ready to truly leave their role, because that's part of their purpose in life today.

6:44  
Yeah. And that's, again, that just goes to illustrate your mastery, I think, because, you know, at the end of the day, you and I both know owners think about the money generally one time, the how much is an early consideration. But at the end of the day, after they get on the other side of the transition, they're always focused on the people, those are the lingering parts of it and how well people are, are coping and hopefully flourishing and thriving in the new environment. And they want to see their baby, you know, grow up and go to new heights and and all that happens with the people. So that's, that's amazing, that, it truly does make you much different than all the exit planning professionals out there that tend to focus on, you know, let me show you how to get this done and how to maximize your, your, your benefit from this process, right? Yeah. And also how to live your, how, what do you need financially from the business, etc? Because sometimes, we build timelines and sometimes the business isn't of the value that's required for the owner actually to leave and not have to go back to work. So yeah, all of those things are, are important. And I just want to, truly Steve, you know, we are not CPAs. We're not merger acquisition people. We don't do valuations. We do not do any legal work. What we do is we help to design the strategy forward so you know, and we integrate with the estate planning, the tax the business lawyers, the financial planners, and help you to bring your, what we call your cabinet of advisors, together to create the future that you want. So we love great advisors. Yeah, boy that's, that's one of the things we share, right? We call it, you know, build your team and get the right people on your team. I love cabinet of advisors. That's, that's a very elegant sounding term. And, and really, that's, you know, they are really the trusted advisors that folks rely on to, because they don't do these things multiple times, right? So, they're typically making a transition once, maybe a couple of times in their life, but they need to rely on really, really the best people they can find to help them really get the outcomes they desire. So, share with us some of the things you're most proud of in the business, some of the things that you know, really have made you guys what you are.

9:24  
Yeah. So, I think, you know, in thinking about it, and one of the things that I am most proud of in our business is our team.

9:33  
We have been able to build this community of people where we come together and we really focus on the client, we can focus on the client first, and we've got a variety of people that have different expertise. So it's, I think the team is the most important thing in our company.

9:53  
I love the guides. So our model is to have what we call transition guides. And the idea,

10:00  
when I came up, you know, wrote the book, It's a Journey, and was thinking about the roadmap and the timeline, and getting from strategic planning is just, here's where I am today, here's where I want to be tomorrow, and then I get to pick the path that I want to go on. But if I don't know where I am today, or even have a direction of where I'm headed, like Canada or Mexico, right, which way, north or south, can be even that big, then I can't pick my route very well. And I also can't invite people along. So we call our consultants transition guides because they're really trying to help you find

10:39  
your journey and your pathway and then along the way, because we don't leave our clients once, we can leave them, but we don't have to leave them. We can help them on their journey as they go forward, and guide them in some pitfalls that we know, that they may not see. So I love the guides, and I also love, we have back office people that are project coordinators and they project coordinate everything for us. So, yeah, that would be the most, the thing that I'm most proud of are the people in our company and the team that we built and how well we execute.

11:20  
Yeah, you've got great people. And I, you know, when you started talking about that, I immediately thought of Dawn who's been with you for a long time, and is just an another amazing individual.

11:31  
Yeah, she's been with me for, well, been with our firm for over 11 years. Wow. She and I work hand in hand together. Yeah Which is great. Yeah. Great lady. Great lady. Every business goes through, you know, some of the ups and downs. What have, what have been some of the challenges and failures and, and pivot points that you've had to face in, in your journey with, with this business, particularly as you began to shift your focus to being, you know, kind of really laser focused on helping people transition.

12:06  
Yeah, so my, so over the years I've been a consultant for a long time. Yeah. And my story of how I got into being a consultant has to do with my kids because, you know, I, I was a petroleum engineer before, and drilled oil wells, and it was super fun. Tell people where you went to school. I always, I always remember that because it's incredibly unusual. Yeah, I went to Colorado School of Mines. Yeah. And, yeah, I graduated as a Petroleum Engineer. And and Mines is in the top petroleum engineering schools in the world. Yeah. Here in Colorado, which is where I grew up. Really the best, right? Yes, absolutely. And there were, and I'm sure your class was full of other ladies like yourself. Yeah,

12:55  
mostly men. Yeah. Very few women were in my class. So yeah, it was one of 10 in my class at the time. So anyways, I graduated from Colorado School of Mines, went to work as a petroleum engineer, had a great time. And then when I had my first son they were drilling offshore, and I didn't want to be a month on, month off mom, you know, fly out to a rig and stay out there, and then come back and be home for a month and then go back out. So I shifted my career, and that's when I started my consulting career, and

13:33  
which was great. And so as I, I have had a vision of, well, I'm very creative. So I like creating these frameworks where you can put different companies. Wait a minute, a creative engineer? A creative engineer? I know, I know the right, left to right.

13:53  
Yeah, and overly creative. And so I wanted to, I build these frameworks, and then I use them and I've always had this concept that if I could get other people to do the work with me and use the frameworks, that we could make an impact, a bigger impact in the world and in our communities. So anyway, my biggest failures, literally, have been trying to scale and multiply the company. Because I've tried four times before this in all honesty and transparency, to bring on consultants with different strategies and different training programs and different things, and the work that we've done in the last four years, we are successfully engaging guides or bringing them on, and it's been really fun. So, but you know, I guess the moral of that story is, every single time I tried something and we worked on it for a while, and it didn't work, we

15:00  
didn't give up. We used it as an opportunity to learn and grow and do it again. So it's been a long road, and I would say that that's my biggest failure or failures that now are turning into probably something that really is working, and we're making an impact and I'm really happy,

15:22  
really happy with, and that's how it goes into the guide and the team, that's what I'm most proud of, because it's truly yeah, the people are amazing.

15:32  
Yeah. Yeah, it's funny, I always the, the song, The Long and Winding Road, always comes to mind when I'm talking to business owners that have, you know, successfully been in business for as many years as you have, because it's a journey. It really is a journey, right?

15:47  
Yep, getting into it and getting out. Absolutely. And the,

15:53  
and the, and the getting out can be as difficult as the getting in, right? Once we get in sometimes we're, we're, we're kind of locked in. We can't escape, right? But at some point in time when you get some level of success and build some significance as an organization, then you have the ability to choose to be able to get out at, your, at, at the, at the appropriate time for you and your family. That's right. And to that point, you know, we talk a lot about different kinds of transitions. And when you're going through a business transition there, you can almost put your transition in two different buckets. One is the transition out of your job, right? If you put your job hat on,

16:38  
you know, CEO, or whatever you're doing. One is the transition out of the job, and then the other one is transition out of your equity.

16:48  
And lots of people can transition out of the job and keep some equity, or, you know, but they're the, how those two things kind of fit together is, is important, and it just complicates the whole idea of transition. You don't have to leave and sell at the same time. Right. And if you want an internal transition, it's

17:09  
this, what we found is the success of a business transition to an internal person, whether it's an, your partner or an employee or a family member, or a combination of any of those,

17:26  
the thing that makes it successful is a slow transition of the owner and leader, so that the other people know how to do it and they're ready. Because if you leave too quick, or there's an event like a death or a disability or something like that, and people are just left with the business, they don't know what to do and they don't know how to run it.

17:51  
And that's why, you know, my personal theory is, I think that's why so many fail, because, you know, the statistics are two thirds of the transitions are, are triggered by some type of an event which is not normally a positive event. It's normally a death, it's normally an illness. It's, you know, or or some kind of tragedy, if you will. And it does kind of put people in the wrong frame of mind. And you know, you and I both know having done this for a long period of time, the vast majority of business owners don't plan their transitions. They, they, they think about it, and they, you know, kind of develop some dreams around the way they'd like it to happen, but they don't talk to anybody about it and they don't really put any plans in motion. They don't get it out of their head

18:40  
until something happens. And unfortunately, it kind of puts them in, it puts them behind the eight ball in that position. And it's, it's not a good place to be in. So what you're doing, and what I hope people will take away from this is, look, the statistics are in, 100% of business owners are going to transition, right? It's now, do you choose to do so on your terms, or do you let circumstances dictate the way it's going to happen? Right? So

19:10  
I'm, I'm a huge proponent of make the choice. The choice will always be in your favor. And then go work with a professional like Elizabeth and her team and design the transition that is ideal for you and your family and your organization, right? What, that's, that's how you create the best possible scenario. But you, but it won't happen overnight. It takes time and effort, right? Yes. And the other piece that I would just add to that is, don't miss out on the opportunity to, to do things differently and like be with your kids and help them grow. And be with your, you know, your employees and help them learn and grow. Because there's so much opportunity to engage in deep, deep, deep

20:00  
relationships, then spend time together that the, the big shift is, instead of being the leader, creator, developer, entrepreneur of the company, it's a growth stage for you too, to become the mentor and the teacher and to help others grow. It's just such a great thing to be able to do. And when you wait, you miss, you know, years sometimes. You miss the opportunity of being able to support, grow and have those, those shifted relationships that are really beautiful. So don't--

20:39  
Yeah, and, and folks that have run their own company for a long time just have so much wisdom, and so much more wisdom than they think. And if they take time, you know, all those things really do take root. I'm with you 100%.

20:53  
As, as you begin to think about, as we said, you know, 100% of us are going to exit, right? As you begin to think about, for The Transition Strategists, what type of framework are you willing to share with, with our listeners that, you know, that you find to be most effective and that you're going to adopt within your organization as you move forward? Yeah, so,

21:16  
well, a couple of things. When we, I wrote the book called It's a Journey, and I wrote it so that with, in hopes that owners would pick it up and read it. Then if you go into the book, it's a how to book, and it's got different tools in it, and then there's a link at the end of the book that you can go into and download tools off of our website where you can actually just take those tools and use them yourself. So definitely want just people to think about their transition before it happens or has to happen, and start to think about envisioning what that next adventure looks like. Not retiring after the business but what is the next adventure look like as you near leaving the business, right? That's part of the adventure, too. It's all a part of the roadmap. And so in my plan, I just had my 60th birthday, which I'm excited. Hey, congratulations. Thank you.

22:19  
You keep having those you're going to be as old as me. Oh, my goodness. Well, that may be okay.

22:24  
I think, yeah, having a birthday now is a blessing. Yeah, absolutely, absolutely, good thing. And, yeah, I love being a year older. Waking up every morning is a blessing when you get to be this age. Yeah, exactly, exactly. So, so this year, yeah, my plan is to carve out some time, and I am working on building my own transition plan and using the same tools that we use with our clients. So you will, I'll have a consultant who's helping me walk me through this process. And, yeah, build a transition plan that will work for me. And you know, just my, my vision of my transition is to stay and work for 10 years and to bring on more guides to make a, to help me and us make a bigger impact for people and communities. And as we do that,

23:23  
yeah, instead of being the producer all the time, turn into that teacher mentor that I want to be, yeah. You're so good at that too. I mean, and I love your tools, the you know, the roadmap, the transition survey, the compass, I think was masterful. Speak a little bit more about some of the key tools and, and, you know, the, the effectiveness that those can bring to people. Yeah, so well, talked about strategy, here I am, here's where I want to go. Yeah. Right? And I can pick my route and-- Alice in Wonderland, at the, at the, at the crossroads there, right? Exactly. Which route do I choose? Do I go this way or

24:06  
that way? But you have to pick, because otherwise you stay right here. So, yeah. So a couple of tools, one would be this thing called the current profile where you actually write down, where are you today? What's the business look like? How does it operate?

24:21  
You know, what's strong about it, what's weak about it? What opportunities have you taken advantage of? What weaknesses or what threats does the business have? Which is a basic SWOT type analysis. So just understand where you are, who you have, what your structure is, who's on your team, how strong is it? All of that stuff.

24:40  
Then we use this thing, a great tool for people to use is this thing called the objectives matrix, and it's where you write down, truly in your heart, in your mind, what do you want for yourself in life, not just in the business, but it could be relationships in the business. But, you know, we had a guy that wanted to surf when the surf was up. That was one of his objectives.

25:00  
And that's fine because it meant he needed flexibility in his world. So you write down what do you want for you, what do you want for your spouse or significant other? What do you want for your children? And what do you want for you as a couple? Because

25:14  
a couple is different. It's, I'm me and I want to be me fulfilled. You're you, and you want to be fulfilled, and then we are us. So sometimes you forget to talk to your spouse and go, you know, what do we want to be like? Do we want to travel? Do we want to, how do we want to live our future life? And yeah, and then, what do you want for your business and for your people and for all of the things that you serve? We were in a meeting yesterday, and it's an owner that's thinking about selling, and his number one concern was the ability to continue to give to the community at the rate that the business gives. He didn't want to lose that, even if he went to a third party sale. So yeah, so what do you want? And that's the objectives matrix. The compass, it allows you to answer your six questions. So you have six questions that will be answered by the time you transition. They don't have to be answered today. That's great to go through the compass and it has 4w and two H's.

26:18  
Starts with your why, which is your objectives matrix, how do you want to live your life, and who do you want to serve? Then it's got the when, it's got the who, and it's got the what. And you'll have many whens, like giving up your CEO role, giving up your equity, could happen at the same time. Equity might transition in stages. Your what, what do you have and what's of value, and how can it

26:46  
be kept together? But maybe, how can it be sliced and diced in a way? Because some people that might, you might want to have buy, may not have the wherewithal to buy the whole thing today, right? So we've got the why, we've got the when, we've got the what, and then the who is a big deal. And it's almost always what gets people stuck because they're trying to decide between one or two or more, or everybody, or third party, or right, whatever. So there's the who. Those are the four w's, and then the 2 H's are the how and how much. So the compass, you can see what you know, what you don't know. Rate it green, I got it. Yellow, not so much. Red, don't have a clue. Right? Rate that. And then you know what you need to work on. And then the last tool that I would say is the timeline, because all those things that are yellow and red go on the timeline, because you gotta figure out green by the time you're ready. And even the greens, you probably should validate, especially if it's your who, because sometimes you think they've got it and they don't.

27:59  
Yeah, yeah, we, I can't tell you, at least once a year we have a situation whereby we have an owner that comes to us and says, you know, listen, the reason I'm here is because at a family dinner, my kids informed me that they do not want to work in the business and they want to go do something else. So my succession plan just went out the window. So you've got to help me find the who, which is one of the things that we do when, when people run out of resources in their own networks, to find the who. So, yeah, it's, it is an amazing thing. Well, Elizabeth, this has been awesome. I think there's a lot of, a lot of things to reflect on here. And I appreciate you being so open and sharing this with our with our audience. If people want to get in touch with you, how would they do so, and how would they learn more about your, your team and your organization and what you guys do?

28:54  
The easiest way to get in touch with us is to go to our website, and it's transitionstrategists, plural.com.

29:03  
And it's easy. You can get in touch with me, you can get in touch with anybody on our team, and we would love for people to come there. We've got some resources, we've got blogs, and

29:15  
you can learn all kinds of things on our website. And we also love, truly, to do an hour with people to just, so if anybody's interested and saying, Hey, this is my situation, this is where I am, and I'd love to get some, maybe just explore us. But we also, in that one hour, give you some thoughts and ideas. So it's an offer out there always to come over and to spend an hour with us. We'll, you'll learn something and if we can help you, we will tell you, and if we can't, we'll give you some tools and resources to get you on your way. What an awesome offer. Well, that's excellent. I hope folks will take advantage of that. Well, listen, this has been a delight. It's been, it's been great to see you. As I said earlier, it's been too long.

30:00  
And I'm very appreciative of you coming on and imparting some of your wisdom and your learnings to the group here, and we're going to share it far and wide. And I hope, I hope it makes your phone ring. You've got a phenomenal team, and they're great, they're great people. We've, we obviously have been engaged with you guys for some time, and very, very honored to be able to help you in various instances. And Elizabeth, again, I just thank you from the bottom of my heart. God bless you and the work that you guys do, it's amazing, an amazing journey. Thank you. Thank you and God bless you as well. Thank you for listening to the You Don't Know What You Don't Know podcast. We invite you to visit www.youdontknowwhatyoudontknow.com and receive updates on upcoming episodes. You can also let us know if you'd like to be a guest or recommend a business to be interviewed. Find us on LinkedIn, Facebook and YouTube where you can like, follow, share and join our efforts. Thanks for listening. We hope you join us again.