Succession Fears: Working Past the Cult of Personality

The point being, though, that what may be a catalyst for growth in one case is not necessarily transferable. Succession experts observe that few companies make it through the second generation and even fewer through the third. Traits that enable an organization to survive and thrive in its most desperate moments may not work so well in more normal times, far from the company's dynamic inception. That certain esprit de corps that emerges during a firestorm lacks relevance for those who did not experience the good old days when it was "us against the world."

Many financial advisors who started their own businesses have an unremitting drive to generate new business, manage every key relationship and touch every process. What they often fail to realize, as we learn when studying Maslow's Hierarchy of Needs, is that while most advisors close to retirement are farther along in self-actualization, long past fulfilling basic life needs, they still behave as if the firm will go to hell in a handbasket the moment they relinquish the reins. Know that this behavior is potentially self-fulfilling. You must start to consider the future of your business long before you leave.

When advisory firm owners realize that real growth, high client satisfaction and excellence in advice come from firms with multiple people accountable for its success, they can break through the cult of personality that has controlled the business since its beginning. But this breakthrough requires a conscious plan and the discipline to leave well enough alone if the transition is working.

The first question the current leader must ask is: What are the leadership qualities that the business needs to advance from here?

The second question is: Does my current team have the potential to develop these qualities? If so, how will they transition into the desired roles? If not, how do I search for that talent and bring it to the firm?

After identifying potential successors, examine deeper questions to help guide an effective plan. When and how should the transition occur? What milestones do I need to put in place to move the process forward? How can I ensure that we are on pace for a successful succession, whether it occurs voluntarily or involuntarily?

Generally, it is wise to have multiple choices for potential successors. You may find that as your business grows, management roles become more specialized. You may also find that certain people are more proficient at projects or task management than true strategic leadership, yet both skills are required. Be aware that some of your potential successors may not have what it takes to do the job well, or may not have the patience or desire to see you slowly transition responsibility and accountability to them.

Create a timetable for your succession plan and have a clear idea of what success will look like when you arrive—but take care not to rush the journey. Effective succession planning allows its leaders and staff to evaluate how people perform under pressure, improve upon the culture, accept their roles without alienating the rest of the people and continue to drive the business forward.

The prominent succession stories mentioned herein can teach us many things, not the least of which is that a failure to have multiple options—along with a method for assessing each potential successor's ethics, vision and competence—will jeopardize not only the transition plan, but perhaps the entire organization itself.