Entrepreneurs Need Intrapreneurs: Building a Successor Team

Starting an independent financial advisory firm is prime example of industry entrepreneurship. It’s a classic image: regular 18-hour days wearing different hats across the business: CEO, Marketing Director, HR Manager, IT Coordinator, Bookkeeper (to name a few).

Many entrepreneurs share a drive to be their own boss and define success on their own terms. They create new things. They continuously solve problems. They have initiative. They can also tolerate risk more than most people. 

A lesser-known term is "intrapreneur."

An intrapreneur works within an existing company. They are not wearing all the hats–they may have a few specialized hats–helping elevate marketing, client services, technology, or portfolio management. Intrapreneurs are creative and driven and may think like an owner, however, their focus is on driving improvement within a company–not starting up a new one.

How does this relate to success in financial advising and wealth management? Read on to find out.

Shifting Your Search

When business founders start thinking about an eventual exit or a step back from the business, they tend to look for an entrepreneur like themselves to take over the reins. However, many of the most compelling young entrepreneurs have likely started their own firms and are working for themselves. Many first-generation founders (G1s) then question the viability of passing on much of the day-to-day responsibilities to one or more of the existing team members. But that's just the point: the next generation doesn't have to look just like the founder. Instead, founders could find a successor team that can build on the foundation already in place. That team won't start from scratch the way the founder did; Its members can use their intrapreneurial skills to grow and manage the company as it evolves.

Another benefit of looking within the firm is that they already know the business, which can lead to a smoother transition when it is time for the founder to slow down or retire. With an internal transition, founders can often wind down their involvement at their own pace, which may not be possible if they sell the firm to an outside buyer. And because founders are already sharing their knowledge by coaching and training their staff, they can use that opportunity to identify and nurture intrapreneurship.

Intrapreneurs Don’t Have to be Producers

It is a misconception that all owners of a financial services firm must be producers. Non-producers bring a different kind of value to the company. They can improve the bottom line by decreasing expenses, changing the pricing structure, or updating the marketing plan to bring in new clients. They can also take over responsibilities to free up time for those who excel in revenue-focused areas like business development or financial planning. The larger a firm becomes, the more it needs non-producing roles such as a chief financial officer, operations manager, or director of marketing.

Recognizing and retaining non-producing intrapreneurs is no different from retaining producing intrapreneurs. Equity ownership is an important part of building a team of talented employees who demonstrate an ownership mentality and provide value to the business. Equity ownership often leads to a leadership position within the company. However, a key employee may also hold a smaller percentage of equity as an investment in and commitment to the firm, without moving into the C-suite.

Identifying the Intrapreneurs on Your Team

Founders can pick out their intrapreneurs, and possible successors, because these team members invest time in creating efficiencies and more effective job production. They jump in to help other team members and put in extra hours. They seek out new ideas and take an interest in different roles within the business. They can visualize the big picture. Whether producers or not, intrapreneurs demonstrate the all-important ownership mentality and focus on the success of the business as a whole. They can help guide the business into the future to serve the next generation of clients.