Many founding owners and leaders neglect to plan for the time when they transition ownership to the next generation. Thoughtful planning is key to the survival and success of the firm in the second generation and beyond.
A 25-person design practice needed to transition from the model of a sole owner and breadwinner to a second generation of new, young leaders.
The founding principal and sole owner had reached his 60s and realized that he was indispensable in getting work for the firm and leading it. The market recognized him as the face and voice of the company; he was a pillar of the community and had developed significant relationships and a strong network. Unfortunately, you can't just hand that over to the new leaders.
The emerging leaders in the firm had been identified, but no work had been done to analyze their strengths, capabilities, or concerns to help them assume appropriate roles. The owner had kept a tight rein on operations and found it hard to let go and delegate. In addition, some bad habits had developed over the practice's 30-year history that needed to be undone.
By interviewing the owner and future leaders, we learned what people understood and valued about how the firm was run, as well as what they didn't know or would change.
The practice had a solid place in the market but was limited by the capacity of the founder to continue to do that well. In our interviews, we also learned that the firm's financial model and the nitty-gritty of keeping a business sustainable were not apparent to the designated future leaders.
The company needed a new structure that was loosely built around its existing culture, the kind of leadership practices employees were used to and what they valued. The structure also needed to be based on the strengths of the new leaders. But at the same time, we wanted them to look at adapting the leadership culture within the firm to the new realities they were facing.
We're changing the culture of the practice from a closed, personality-driven organization to a more team-based collaborative culture.
We worked with our client to establish a leadership agenda that the new principals now follow, with appropriate priorities that break down daily, weekly, monthly, and quarterly. Along with this, we led quarterly reviews of the new team's development and effectiveness progress. We also trained the new leaders in business development skills, which didn't come naturally and had never been necessary. Because of this, the firm's new leaders are paying closer attention to their financial metrics, and their backlog and sales have grown, as have client contacts.