"Great," I told her. "So are you planning any trips or vacations after he retires?"
She then told me that she and her husband bought beachfront property in Florida and they both intend to spend four months there each winter. "So, I queried, "Who's going to manage your practice while you're away?" There was dead silence on the other end of the phone; she hadn't considered that. "It's time," I told her, "to talk about management succession."
A DIFFERENT SUCCESSION
I'm not talking about ownership succession-that's a different column altogether. But it's possible that you may want to retain ownership, and yet not be tied to the office on a daily basis. At some point, that beachfront property or mountain hideaway may be calling, and you'll need to consider who can take the daily responsibility for your office, so you can enjoy your time away. Planning for this event takes time, preparation and much thought.
Succession planning is not just a personal transition; it is very much a practice transition as well. The success of the person you select to follow you depends upon how well you have prepared to hand off your practice management functions. Look at your practice today. Are you the sole rainmaker? Are you so personally integrated into the activities in your practice that things can't really happen without you? Your plans for succession begin with revamping your practice to make yourself replaceable.
Before you talk with possible candidates, you will need to make some preparations. The first thing to know is whether you're operating a practice or a business.
For instance, those who operate a practice typically:
* take any client that can "fog a mirror;"
* provide indiscriminate service;
* see profit as whatever is left after overhead;
* do anything and everything within the practice;
* design around personalities;
* work hard but aren't sure if their business is even profitable; and
* take their business with them when they die.
Those who run a business:
* take only profitable clients;
* give prioritized service;
* see their profit as what is left after they pay themselves;
* operate at their highest and best;
* hire the best people for the job;
* only do tasks that correlate to their business plan or ideal client;
* are profitable whether they're in or out of the business; and
* consider their business an asset.
Which do you have? Now that you know, you can get started on making your preparations for a plan. There are five big threads in this list:
1. Target, screen and prioritize clients. The more detailed your client target is, the better you can customize service and the easier it will be for you to find your successor, train him or her, and engage that person with your clients.
2. Determine client costs and profitability. Knowing what it costs to bring on a new client can help you become more discriminating about which clients to pursue. It also can help you set realistic revenue goals for both you and your new successor.
3. Systematize. Because you will begin the relationship with your new hire by leveraging your own time and activities, you will want some quality assurance. The best way to attack this is to standardize the processes and activities that take place throughout all phases of your business so that all clients at a given service level will receive the same attention and treatment. If you and your successor have the same ideas and expectations about quality service, the transition will be easier.
4. Hire the right people. Look at your support teams. Are they folks you have moved around like chess pieces because they were unable to grow into a job you needed them to handle? Were they unable to pick up skills that should have been second nature? Get picky: Hire people who are educated and skilled to work in the positions you need. Your successor will need a team of knowledgeable, competent people.
5. Delegate, delegate, delegate. From my experience, most advisors can't delegate simple reporting tasks, let alone hand off the meatier functions within the business. You can only work at your highest and best level if you are delegating responsibilities and activities that do not require your degree of expertise. Many advisors resist delegating. They insist, "It's faster and easier if I just do it myself, and I'll be sure it's done my way." No. Over the long run, not delegating is neither faster nor easier, because it traps you in the details of the process. The time and talent you invest in training and delegating matters to your successor now will ultimately pay off as you step back from day-to- day activities.