This year’s Small Giants Summit, held in Detroit, Michigan, included two full days of learning and relationship-building with like-minded, purpose-driven business leaders.

One of the sessions featured Bruce Hendrick, who joined RBB in 2000. He became president when the tech bubble burst, and at the time, the founder—who had run the business since 1973—was seeking a successor. That successor would end being Hendrick.

Fast forward about 15 years, and Hendrick had the experience of handing over the company himself, a process he told us about during his session, “I don’t know. Have you asked Jim?” Having been in both positions (successor and predecessor) during such a leadership transition, Hendrick shared some key lessons he learned with the Small Giants group.

Here are those takeaways.

Honor & Respect the Past While Creating the Future

Hendrick maintained one of the most critical components to any successful leadership transition: a strong relationship between generations. “Nothing else matters if you don’t have a relationship with the founder or the owner above you.”

Second, Hendrick shared just how critical it is for the successor to acknowledge and respect all the risk that the founder has put into their business. “Respect the founder’s risk, their knowledge and their blood, their sweat and tears. If the founder understands that you are more for you than for the business, and you don’t learn to respect what they came and did for the organization—then you’re the one off base, not them.”

Hendrick said one way he lived this out was when he showed his personal commitment to the company, another key piece of advice for other successors. “In my case, it was moving my family out to the middle of nowhere. I’m not suggesting that you need to [do that], but put some skin in the game. Show the first generation that you are willing to take some risk and that it matters as much to you as it does to them.”

Hendrick explained that when taking over a business, the next generation leader must also fundamentally have the ability to address the biggest challenges at hand.

That can sometimes seem “unfair” or it can feel like a departure from the past, but it has to be that way, said Bruce. “You personally have to address the biggest challenges of your organization,” said Bruce.

It doesn’t matter who founded the company or who caused the issue—it’s up to you to be the one who steps up to the plate to address it.

“Lower your pain tolerance,” added Hendrick, acknowledging how many leaders carry too much pain, or put up with too many issues, for too long in their position. In this context, it can hurt the leadership transition process. “We don’t get awards for how much pain we can endure. We don’t,” said Bruce, explaining how sometimes we aren’t helping the company, or ourselves, when we bear the burden of something for too long.

Go to the “Icky Place”

“Go to the icky place with your company, with yourself, and look in the mirror. Figure out what those issues are and deal with them. Don’t just tolerate them. And I said that because I did,” said Hendrick. The takeaway: truth-telling can be painful, but is critical when it comes to leadership transitions.

Hendrick said it’s important to honor and respect the past—but not to live in the past. “It can be very easy to be sucked into the world view of the previous generation, and there’s nothing wrong with that, in fact, we’re encouraged to do that by all the wonderful founders and owners,” said Hendrick. But Hendrick made the distinction that the next generation can’t only look back.

The next generation must respect the past, but also must bring new value, new energy, and new life to the company.

“If we’re not bringing it [as the next generation,] we’re not adding value, and we’re not really helping the organization.”

While Hendrick had a great deal of advice for founders who will transition out of their company, one of the biggest takeaways was the importance of successors to be moving towards something else when they exit or begin to exit the business.

One of the reasons many founders/owners can have trouble walking away from the business is because they aren’t “walking towards anything else in life,” said Hendrick.

After seeing this first-hand, he says he was able to make sure he had a path he wanted to go on both personally and professionally after changing his role at RBB.

“I consciously wanted to start a new business, a new venture,” Hendrick explained.

“Walking towards something gives life; walking away from something is so much harder to do when you’re not walking towards something at the same time.”

His other key points for the group included:

• Truth-telling is a powerful foundation for better business relationships

• Alignment between generations is critical for a successful exit

• You must let the new leader/successor fail, which will help them in the long-run

Check back in for part two for more insights from the Summit.