TRANSITION TALK

Your Future, Your Choice

Posted by Laurie Nichols, RLP, CPC & ELI—MP on Feb 7, 2017 9:07:22 AM

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If you’ve been reading my recent posts, you know I consider myself a “win-win” gal.  You’ve read about how the self-discovery of my real win—not owning the business—was key to not only successfully exiting my business, but also launching what I now call “my next chapter.”  

Up to this point, I was primarily speaking of the founder’s win, and that of a buyer. In my research and work with clients who are firm founders, I have noticed that their perspectives on their own personal transition strategies often fall into two camps. That is, some are asleep at the wheel, relying on autopilot; and others are convinced they’ve already got a plan ready to go whenever they are.

In recent months, I’ve come to recognize there is one more win to add to the mix. This realization has come about as I met with a growing number of smart, hard-working “junior” professionals who are frustrated by a lack of clear strategic vision for the firm and their role in it. Even those who are designated successors, described a lack of transparency from the founders regarding the firm’s financial picture, vision and strategy.

As I talk to these particular next generation owners, two themes have become apparent:

  1. They are deeply unhappy and fear giving their whole-hearted commitment to the firm—so they hold back their best efforts.
  2. Others, also unhappy, are exploring their options. They are confident that their demonstrated contribution to bringing in business creates options in the market place—most likely with a competitor. 

Isn't It Ironic

So, what’s the common thread for this dissatisfaction? A perceived lack of trust and transparency from the founder, both financially and in spirit.  The result? Quite frankly, a culture that sucks.  Even in a two-person shop, culture matters. 

Recently I attended a panel discussion that included CEOs from three well-known corporations, and the consensus was clear. Culture trumps strategy. It seems to me that this is even more important for the founder/CEO of an independent advisory firm.

A long-held belief in the investment industry is that the most valuable assets are people—human resources. Businessdictionary.com defines human resources as the “scarcest and most crucial productive resource that creates the largest and longest lasting advantage for an organization. It resides in the knowledge, skills, and motivation of people…”

When you have a culture that discourages (or even blocks) enthusiastic buy-in for your vision, you cultivate tension and emotions among your people that impede productive action and, in fact, derails your efforts to grow. 

Consider the ripple effect of this negative energy on your clients, on you, and ultimately on your ability to monetize your business. How does this trickle down of negativity prevent you from living the life you dream of?

Life Audit Revisited

In my last post, I asked some “Life Audit” questions. Two of the questions are particularly pertinent.

  • “What do you REALLY want?”
  • “What REALLY matters to you?”

Is monetizing your business key to getting what it is that really matters to you?  If the answer is yes, then it begs the additional question, “How important is the culture of your firm to your prospects for either an internal or third party sale and transition?”

There are very real risks to the founder who makes assumptions about the marketability of the business based on the contributions–including fee revenue–of key team members who feel undervalued and untrusted. Those risks can range from poor customer service from disgruntled employees, to untimely and damaging loss of clients and revenues when a key contributor jumps ship.  This kind of client loss affects the full range of a founder’s plans from selling, to internal succession, to just riding it out on a stream of steady cash flow.

Win-Win-Win

The third Win by now is obvious—it’s for your team. When it comes to cultivating and maintaining a culture that attracts and retains enthusiastic professionals, emotional intelligence matters. When you lead with high emotional intelligence you are both self-aware and “socially” aware in how you manage relationships with others. 

Emotionally intelligent leaders relate to their team, using skills such as listening, acknowledging, validating and visioning to build strong relationships and create buy-in.  This connection encourages team members to cultivate an owner’s mindset.

When members of your team experience a sense of being valued both as people and for the contributions they make to you and your clients—culture changes.  When your culture is strong, the range of possibilities open to you expands as you begin to plan for and realize your own “next chapter.”

Key Actions

Much of the anxiety I’ve witnessed in “junior” team members has stemmed from a lack of knowledge about the plan for the firm and perceived secrecy from the founders.

There are many things you can do to improve the culture of your business, and the satisfaction of your next generation of owners. Three steps that will take you in the right direction for building your culture–as well as setting your exit plan up for success–are:

  1. Articulate strategic goals for moving forward with your plans while still creating a fulfilling company culture. Take into account both the firm’s broader objectives and your own personal and professional goals as an owner. Be open about your plans with your successors and key team members.
  1. Cultivate a team approach. This will decrease dependency on you as the founder and encourage an ownership mindset in your team, especially your chosen successors.
  1. Identify and mentor your key team members. Mentoring takes time and an emotional connection, but the results of that connection are exponentially valuable. It is crucial for solidifying a positive cluture, and team commitment to the future of the business.

Take a look at your own business and team. Is there a gap between where you are now and your vision for a transition plan that will serve you, your clients and your team? With a clear vision, you can create a strategic plan to bridge that gap and get into action.


LAURIE NICHOLS spent 30 years in the financial services industry, 20 as an owner. She took her exit four years ago and has thrived in her latest chapter as Owner, Life Planner and Coach of Next Chapter Vision which specializes in helping RIA owners and successors identify their exit planning goals and get into action. This is the fourth guest post in our series written by Laurie for FP Transitions to chronicle her experiences helping to guide owners through their transition, along with her own exit planning journey, the challenges she overcame, and the lessons she learned read the first here and the second here.

Topics: selling, next generation talent, next generation ownership, culture, Guest blog, exit planning

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