You won’t live forever – but with intentional ownership transition, your firm could be immortal.
Many firm owners act as if they will live forever, but that is obviously not the case. Many firm owners also think they will always continue to do the same work they currently do, but that is simply not reality.
Why do we let ourselves believe these things? What is it about transition that makes us want to ignore reality? Transition happens either the hard way or the easy way. It is so easy to do nothing and regret it down the road. It is hard to be consistent in attracting and retaining key leaders for your firm so you can transition – but it is immensely rewarding once you finally do. Ownership transition is a long, tedious process but it is a worthwhile one.
I’ve seen a firm that did a phenomenal job at cultivating a second and third tier of leaders by taking intentional steps in elevating the roles and responsibilities of their people. But I’ve also seen a firm that developed a horrible reputation with future leaders, with people leaving the firm because of personal dynamics and issues with the current owners. These two scenarios paint very different pictures, but the differentiator is clear: intentionality.
Intentionality allows everybody to be aware of what’s happening but it also provides clarity on key business areas such as the financials, valuation, legal, and organizational responsibilities associated with being an owner. By being open from the beginning, you put a stake in the ground that allows everyone in the firm to understand your timeline, conditions, and philosophy.
I know many firm owners get so bogged down with the daily routine of winning work, directly doing work, while trying to run a business – but if you are not intentionally communicating with at least a select group of next gen leaders, internal transition is not for you. There are many factors that lead to a successful internal transition, including time and mentorship – both critical. Some leaders inside your firm may not be ready, but if you show an interest and let them see that you believe in them, that they may one day be ready to take on the role of being an owner, your job becomes so much easier down the road.
Being an owner isn’t just about the change of title status or responsibilities – it is also an obligation to enhance the viability and future of your firm. That includes cultivating the future leaders of your firm. Let us not deny the reality of the situation. Ownership transition will occur. How it will occur is up to you. This article is a reminder that the time we all have is finite. Stay on track and focus on elevating the hard-working people who make your firm successful. They deserve a chance to become owners sooner rather than later.
If your firm is ready to start the transition conversation – or needs help getting back on track – Zweig Group’s ownership transition experts can guide you every step of the way. From financial modeling and valuation to leadership development and communication planning, we offer tailored solutions to help you build a clear, intentional path to the future. Learn more about Zweig Group's ownership transition consulting.
Ezequiel Tovar is an ownership transition consultant at Zweig Group’s. Contact him at etovar@zweiggroup.com.
