It’s ultra-complicated. There is lots to think about and there are lots of processes involved. You have to calculate your exact trajectory, adjusting for the fact that you are in motion while relying on an imprecise instrument to measure the distance to your destination. You also have to worry about the weight hitting the ground and the density of the landing spot.

While all of this is going on, you must synchronize all the other moving parts, each with its own trajectory that could throw off your balance if ignored.

It’s complicated. But we do it all the time. It's called taking a step.

Sometimes things work best when you don’t overanalyze them and simply put one foot in front of the other.

The same is true for the succession process—even if the overall process is very complex, sometimes all business leaders need to do is take the next step. I’m not suggesting that preparing for succession is a waste of time and you are better off just winging it and hoping for the best. That would be irresponsible advice. But letting your firm be paralyzed by the inability to perfectly plan for the future can be just as destructive.

In our G2 Leadership Institute, a leadership development program that focuses on next-generation professionals, we have worked with close to 250 young leaders and their mentors (most of whom are firm founders). In this work, I often hear things like this:

Mentors tell me: “I am 52 years old, and while I have a few years left, I worry a lot about succession.”

A few years? Bernard Hopkins was still boxing for world titles at 52. But I see how founders feel under pressure. “I am still going strong and have no intention of hanging it up anytime soon,” they tell me, “but my partners keep asking me when I plan on retiring.”

It’s not just founders obsessing about the succession problem. I frequently see younger advisors spending an extraordinary amount of time creating spreadsheets showing how their firm’s equity will evolve over the next 30 years. Rather than alleviating their fears, the modeling makes them ever more frustrated.

Perhaps this is to be expected. After all, our industry is all about helping clients plan their retirements and perpetuate their wealth for many generations to come, so we are used to thinking about plans in terms of decades. However, in the case of succession, plans that stretch into the distant future may not bring much clarity. In fact, they may work against you, killing your willingness and ability to act. So I would like to offer founders and next-generation advisors some advice on how to overcome the paralysis of succession anxiety disorder and start learning how to walk again.

Watch The Mile Markers, Not The Finish Line
This is advice any marathon runner would recognize: Focus on the mile ahead. If you keep thinking about the total journey to the finish line—26.2 miles!—you will quickly be overwhelmed by the massive scope of what you are undertaking. But if you just run the next mile, it usually works out—more than 98% of those who start a marathon finish it.

Both the next-generation advisors (G2s) and the founders should be asking themselves this question about business planning: “What is the next step for us as a firm, and does that step change depending on our succession plans?” The answer to the first question depends on the firm, but more often than not, the answer to the second part is “not really.”

For most firms, the steps for success are straightforward: Grow the firm, hire good people, develop those people, manage your client relationships and put your best people in leadership (and perhaps ownership) positions. Succession often does not have a drastic impact on those strategic initiatives, so don’t let the details (or lack thereof) of your succession plan derail you, take your eye off those fundamentals or keep you from continuing to move the firm forward.

That said, if you are approaching a point where you are in danger, then it is time to act. How do you know if you are? Maintain an active dialogue with your stakeholders. They can point out obstacles in the course that you may not have seen coming. More on that next.

Consider All Stakeholders In Your Decision
If you are the founder of an advisory firm, remember that you have a responsibility to three core groups of stakeholders: 1) the clients of the firm, 2) the other owners (i.e., your partners) and 3) the team. Ideally, the future direction of the firm meets the goals of all of them. You should never sacrifice the needs of one group to appease another.

Founders often assume that they know everybody’s goals and desires without actually consulting with them. Or more accurately, they know the answer stakeholders would prefer before introducing the constraints of reality.

Airlines understand this phenomenon well. When consumers are asked questions such as “Would you like better food on the flight?” or “Would you like more options for in-flight entertainment?” they tend to respond with an enthusiastic “Yes!” However, when the questions are rephrased to include the trade-offs, responses change dramatically. “Would you pay more for a ticket if we had better movies?” Well, when you put it like that, “Heck, no!”

Similarly, founders may think they know what employees want without making the realities clear. They often avoid admitting that there really aren’t many alternatives for future ownership and create the perception that the situation will somehow work out. This does not help the younger team members. It just creates anxiety.

First « 1 2 » Next