Having The Succession Conversation Too Late

This story is a composite of several experiences where a senior advisor with over 25 years of experience brought a novice advisor into their business.  It highlights the fact that human beings are basically honest, but at the same time, boundaries are so important.

The senior advisor had a lack of vision, brought on by unresolved Unmet Needs, and therefore had weak leadership boundaries with the novice advisor.

Casually over lunch one day, the senior advisor says, “We can talk about being partners one day.”

Five years later, the senior and novice advisor finally get around to creating a partnership agreement, and the relationship ends in a heated conflict.  You see, both were thinking of a 50/50 split, but they were thinking of it in a very different way.

The senior advisor believes that his business is worth $250K, based on the 25 years he spent building it before the novice advisor arrived.  So, he expects the novice to pay him 50% of $250K ($125K).

The novice advisor, fueled by a Generation X/Y sense of entitlement, expects to be handed 50% of the business’s earnings.  He has no idea of the value of the business when he came in, never mind what it took the senior advisor to build it before he got there.

The novice advisor quickly forgets what it took the senior advisor to build the business, while he slid in front of all of these quality A-clients with zero sweat equity to attract them.  After all, anyone can walk out in front of someone’s audience (well, almost).

I have seen this same scenario play out more than once, and it has ended every time in a shit fight.

The solution:

• Know what your values are (get your Unmet Needs identified and met)

• Have a clear vision for the future

• Use a hiring strategy that included values and behaviors assessments, to weed out takers versus givers

• Have a clear and documented conversation with new associates and employees about the value of the business at their point of entry and the fee if they want to buy in

• Don’t use the word partnership with anyone who has been with you in your business for less than 5 years.

This article was originally published in Curing The Unmet Needs Disease © Simon Reilly 2008