The Secret of My Succession

In this meeting, take time to validate the unique contributions of each member of your staff. Make your tribute as full, personal, and detailed as possible, not just a cursory comment about valuing everyone. Then you might go on to talk about what you will look for in the next phase of your business–the qualities, strengths, and experience you will expect possible new partners or leaders to have. Identify the individuals you hope will be your successors.

Meet individually with the staff members you've decided not to groom for more responsibility. Some may be disappointed or upset at being excluded from the chosen few.

Whatever the case, you need to let them air their feelings about your decision. Try to salve any wounds by listening to them and praising them sincerely for their contributions to the firm. If you are concerned about losing good individuals, I would offer material as well as verbal appreciation–i.e., a raise, bonus, or other reward for past performance and continued teamwork during the transition period.

Remember, "What you appreciate, appreciates." By making it clear how much you value your employees, you will have a good chance of keeping most of them on board.

After selling my business, I'm working with a transition team to acclimate my clients to the change. However, I've begun to see that the new owners' way of conducting business is not as similar to mine as I initially thought. I'm worried that I haven't left my clients in good hands after all. What should I do? First of all, are you sure the new owners' different outlook is going to be bad for your clients? Or is it just different?

Letting go of a business you have created is like sending your child out into the world; many people have trouble mustering the degree of surrender it demands. The task can be even harder if you were very gifted in your work. So you need to be sure that your difficulty with the new owners is not just a matter of their not being you, but a real reflection of some unacceptable gap between who you thought they were and who they are turning out to be. For a more objective view, you might contact a sampling of your clients and ask how the change is going for them.

If you're convinced that a problem exists, meet with the new owners as soon as possible to share your concerns. Be specific about the behaviors and attitudes you need to see changed. The client feedback you've gathered will give you more credibility and put you in a stronger position. After all, it's in your successors' best interest to cultivate relationships that build on what you've already established.

If they seem willing to provide more of what you expected, give them a little time to see if they institute the desired changes. If they don't follow through and the terms of the sale allow it, you may be able to contact your old clients and suggest a different advisor or group more attuned to your ways of working.

I've been fortunate to have a good group of employees who have stayed with me for years. When I retire, I'm planning to sell my business to an outstanding professional whom I've long admired. I know this is likely to create a terrible ruckus among my staff. How can I execute my plan without jeopardizing the future of the firm? First, be straight and open about your strategy from the get-go. Otherwise, your succession plan can easily turn into a non-success. A case in point was recounted in a recent Wall Street Journal article about a Washington, D.C., bookstore.

The two owners of this business ran it in a unique way, trusting employees to "do their own thing" and applauding their individual contributions. Deciding that it was time to implement an exit strategy, they brought in an outsider who worked among the other employees without telling them that he was being prepared to take over the company. When the truth came out, there was a deluge of havoc and resentment among the other staffers that practically brought the business to a standstill.

In this company's employee-centric culture, choosing one or two successors from within would probably have been a better solution. But even if no one on the staff was qualified for the job, it never should have been a secret that an outsider was being groomed for leadership. The owners should have held individual and group meetings before, during, and after this dramatic step to allow emotional processing.

When thinking about your company's future, take plenty of time to consider the legacy you want to pass on. Ask your employees and clients what they most value about your business and its services.

You may well decide to put it on the market. But give yourself permission to close it down instead of passing it on, if that is a better solution for your needs and goals. You can simply find like-minded colleagues to accept your referred clients, and wish both parties well as they construct new relationships of trust.

Above all, be sure to communicate to the people around you what you are thinking and why you have decided on your course of action. The clearer your vision and the more open your communication, the more easily you will be able to move on to a new phase of your life.

Olivia Mellan, a speaker, coach, and business consultant, is the author with Sherry Christie of The Advisor's Guide to Money Psychology, available through www.investmentadvisor.com. You can e-mail Olivia at [email protected].