When it comes to succession planning, there’s a critical stakeholder that is often overlooked: you. The hardworking “junior” professional I refer to as a NexGen professional.
Working with a growing number of smart, ambitious NexGen professionals, I’ve been hearing a common refrain: they are often frustrated by a lack of clear strategic vision for the firm and a lack of clarity around their role in it.
Even those who are designated successors often described a lack of transparency regarding the firm’s financial picture, vision, and strategy.
Why does succession planning so often forget to take these key stakeholders into account, and how do we do better?
The cost of ignoring NexGen professionals during succession planning
As I talk to NexGen professionals, two themes become apparent:
- Some who are deeply unhappy fear giving their whole-hearted commitment to the firm and so hold back their best efforts. Other who are deeply unhappy begin to explore their options, recognizing that their demonstrated contributions create opportunities in the market place—most likely with a competitor.
What do these NexGen professionals have in common? Unhappiness.
The common thread for their dissatisfaction? A perceived lack of trust and transparency from the founder, both in spirit and financially.
The cost of this dissatisfaction is high. Not only does it lead to junior professionals who are not giving their best efforts or who are actively looking for other opportunities, it leads to a firm culture that, quite frankly, sucks.
Culture matters—and succession planning helps
When in a two-person shop, culture matters.
Recently, I attended a panel discussion that included CEOs from three well-known corporations.Their consensus was culture trumps strategy. It seems to me that this is even more true for the founder/CEO of an independent advisory firm.
A long-held belief in the investment industry is that the most valuable assets are people—human resources. Businessdictionary.com defines human resources as the “scarcest and most crucial productive resource that creates the largest and longest lasting advantage for an organization. It resides in the knowledge, skills, and motivation of people…”
When you have a culture that discourages (or even blocks) enthusiastic buy-in for your vision, you cultivate tension. Tense emotions among your people impede productive action and, in fact, derail your efforts to grow.
Consider the ripple effect of this negative energy on your clients, on you, and ultimately on your ability to monetize your business.
This is why NexGen professionals MUST be included in the succession planning process.
Are you ready to discuss a Win-Win-Win Succession Formula that plans for a successful transition for firm founders, clients, AND NexGen professionals?
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