Much of our recent work has been in assisting A/E/P firms in the creation of effective ownership transition plans that allow the variety of tiers to assume management and operations of the firm. In many cases, senior leaders have created and guided their firms for most of their careers, some spanning generations.
Much like those of us who have raised children and watched them turn into teenagers and then into young adults, the successful first tier leaders are able guide the second tier, allow them to learn and to fail, and finally, to help them step into leadership roles with confidence. Most importantly, both parents and leaders alike recognize that without letting go, the ownership transition will not be successful.
Often ownership transition is less about the financial model than it is about the second- and even third-tier leaders who are stepping into somewhat uncharted territory. If you have been honored to mentor these folks, you see their frustration with failure. Sometimes that feeling of failure comes with a fear of moving forward, since trying to do so would just lead to more failure. So we draw on the greater wisdom from Yoda: “Try not. Do or do not. There is no try.”
The cultivation of a culture of trust is fundamental to the organization. As the second- and third-tier leaders take ownership of their new roles, they must have a network that has their back at all times. Lessons and the way they learned them can have either a positive or a negative impact. It’s all in how the senior leaders carry the code of conduct, and how they foster interest in the roles of these new leaders. Failure is a perception that can be modified by the gentle guidance of the leadership team. Without that guidance, you as a senior run the risk of losing the very talent that you want to move into your role.
As a senior leader, how participatory are you in cultivating MBWA – Management by Walking Around? Do you really know the staff that works for you? What drives them, nourishes them, and what is their professional passion? For yourself, have you engaged someone who you trust, someone who has no fear of telling you what you need to hear?
In a previous article, we highlighted the guys at Pikes Place Fish Market and how they transformed their customers’ experience. Out of that came a simple little book, the Fish Philosophy. As a leader, do you and your team embrace these four simple traits: “Choose your attitude! Play! Make their day! Be there, be present!”
If you are worried that your second and third tier might not do what’s needed to ensure success, try this. Have them create a business plan. In a recent strategic planning exercise in which we engaged 19 new leaders, both second and third tier, we challenged all of them to provide the following in six pages:
- What is my vision for the continued success of the firm?
- What do I see as the growth and performance in my area?
- What Targets of Opportunity will I engage to grow my area?
- How will I get the firm to participate in my Vision?
- What will define success?
- How will I safeguard the ownership transition, not just for the departing 1st tier, but for the future sustainability of the firm?
These six-page plans set a foundation of success for this particular firm and guided the next year’s vision. The plans were not perfect, but it allowed the first tier to work with these leaders to amplify the ideas that were strong and to assist in those that required tuning. With these plans in place, letting go became easier to do.
So as you move into the future, remember what Neil Sedaka said: “Breaking up is hard to do.” Letting go is even harder – unless you embrace, engage, and trust the next tier.
Ted Maziejka is a Zweig Group financial and management consultant. Contact him at email@example.com.
Zweig Group has recently released, Guide to Ownership & Succession Planning, 2nd edition.
This article is from issue 1155 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.