Choosing the right partners for your business, and then keeping a good relationship with them, has always been an important subject.
Who you marry up with in this business, and how to keep a good relationship with those people, has always been an important subject.
The right partners are going to be incredibly helpful to you. They will do the things you don’t do well. They will give you valuable perspective into other people in your firm, have client relationships that you don’t have, cover for you when you can’t do your job, and help you grow and manage your business! The benefits of giving up some ownership to have great partners are invaluable!
I have written a bunch of articles over the years on qualities firm principals should exhibit, so I won’t bore you by rehashing those here. But it is worth saying one thing about the people you add as principal owners: they had better be of good character. That means that they are honest, ethical, nice to other people, and have a strong work ethic. Because if those qualities aren’t there, there is no amount of training and development that will make a difference.
Your best partners are probably either working for you now or already owners in another firm. If they are working for you now, no problem! If they are already owners somewhere else, you may have non-competes to contend with. Non-competes could really slow things down and create some ill-will from the firm you are taking that person from. While my understanding is that non-compete agreements are getting increasingly difficult to enforce, I’ll leave that up to you and the future partner you are recruiting to decide if the hassle of going through all that is worth it. My experience is that playing a waiting game over two or three years while that person does something else to let the non-compete expire rarely works.
In years past, it was usually the most senior people who got to be partners in AEC firms. The absurdity of longevity being a selection factor was driven home to me years ago while attending a board of director’s meeting for an old line, Boston area engineering firm. I don’t think anyone on their board wasn’t in their 70s, and they got into a long discussion about whether or not “Eddie” was ready to become a principal yet. When I asked how old Eddie was, I learned he was 57! If someone isn’t ready to become a firm owner at 57, they won’t ever be. In fact, many firms in this business require owners to start selling down at the age of 60, so that wouldn’t leave much time. Longevity should not be part of your criteria!
My personal experience is that bringing the right young people into ownership early can be incredibly valuable. When you do, you are much more likely to keep those people. And younger people often have more energy and drive. They will grow your business because they are motivated and haven’t already achieved all of their goals.
It’s important to keep good relationships with your other owners, and doing that takes time – time in the form of communication and interaction. That gets hard if you aren’t in the same geographical area but it’s not impossible. Texting and email, along with the occasional phone or Zoom call can go a long way. Just check in. The more interaction, the better. I have recently started working with a firm (not in this industry) that is based in another state – one I plan on investing in – and we (their top two owners and myself) communicate via text constantly. It has really been helpful to establish our relationship with each other. I think this kind of continuous interaction is more valuable than structured activities such as company “happy hours” or quail hunting trips, or scheduled office visits just for the sake of having face time when otherwise you rarely speak with each other.
One of the most damaging things you can do to your relationship with your partners or potential partners is to have secret plots. Your other partners won’t trust you if they find out you have plans for the business or yourself that they don’t know about. Ditto for trash talking a certain partner with your other partners. They will assume you are saying similar things about them. Not good.
If you really want to find and keep good partners – and you are either the firm founder or primary owner at this point in time – one of the most important qualities you must have is to not be worried about control. I never cared if my ownership went below 50 percent because I knew what I brought to the company. But many founders or heads of AEC firms I know or have known can’t seem to get past that. Unless you plan on retiring on the job, stop worrying about your ownership percentage. Focus more on the value of your ownership interest and how to increase that by being a successful enterprise. It’s much healthier. The illusion of control when you have more than 50 percent is just that, anyway. No one is going to do anything they don’t want to do or feel they have to do, so your “orders” will likely fall on deaf ears. And that’s not the way to rule a business made up of intelligent, free-thinking people.
There is no secret recipe for finding and keeping good partners. When you get down to it, the most important thing is that you have a real desire to share your ownership. If you don’t see the benefits of that, my guess is it won’t happen!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.