Firms can have great continuity plans, but they probably won't work if you don't have a good leadership plan too. It's essential if you have any hope for success during a transition. Fortunately, with an effective leadership plan, you can identify the men and women your firm needs. Without it, your firm may not survive a transition.



Part of management's responsibility is identifying talented individuals, then giving them training, and decision and management duties. When you do so, most of them will be outside their comfort zone, at least temporarily. Initially, you may wonder: Is pushing people outside their comfort zone a good idea?

One zone change to consider is moving to a generalist from a technical specialist or expert. Leaders must be able to understand the tools and terms used in a wide array of business functions. Being a top financial planner is no longer enough. Even more important, as new leaders employ inside and outside specialists to deal with a wide array of functional areas, they must develop skills to oversee and evaluate the people managing those areas.

A second zone is using a generalist role and skill sets to integrate a team's skills in an optimal way, and moving between the smaller tactical details of getting things done to the larger picture of strategy. While difficult for many people to accomplish, it's critical to effective business leadership. Strategic thinkers move between levels of analysis, looking for patterns and outside factors that can affect overall business.

Another zone change is problem-solver to agenda setter. Being a good problem-solver is important, but as leaders have a wider range of concerns, they have to move from grinding out an answer to identifying and prioritizing problems a firm should be looking at (think Strengths, Weaknesses, Opportunities and Threats analysis).

To do this effectively, a leader-in-training may turn to established priorities, such as a company's strategic plan, more senior management and even outside consultants as he or she learns to operate in a more ambiguous and uncertain environment.

A fourth zone moves a leader-in-training from narrow management to wide-ranging, diplomatic focus. This means moving from problem-solving and management of a few subordinates to spending time with a wide range of individuals external to the company. This includes media, regulators, consultants, vendors and stakeholders in a company such as lenders and shareholders. This means developing presentation, negotiation, persuasion, conflict resolution and alliance-building skills. This can result in working collaboratively with market competitors.



An effective leader will use his or her skills acquired in other new leadership zones to look for ways a firm's interests line up with other external players. They learn how decisions are made in outside organizations such as public boards, and develop effective strategies for influencing others. They also learn that time horizons in influencing and bringing about change are much longer than inside a company.

At the end of the transition, a leader moves from being a cast member to the lead role in the organization. The intensity of attention and scrutiny increases; effective leaders have a substantial impact as role models for everyone in the firm. Vision, inspiration and "the right stuff" attitude and behavior are fullyexpected. Effective leaders find themselves connecting with more people in their organizations to define a compelling vision and to lead change.



Can all professionals move up the leadership ladder? The answer is yes and no. Gaining new skills is possible for most, but business studies and real-life experience suggest only a few will move out of their comfort zone in every area necessary to become an enterprise leader.

Years ago, our firm instituted a requirement that all client-facing advisors become involved in our local FPA chapter. Some advisors have, some have not. Some became committee chairs, and one became the president of the chapter, which at the time had nearly 1,000 members. This colleague moved into the diplomatic zone, learning how to skillfully influence others.

Other client-facing advisors have not chosen to move into that zone. Whether they have the desire, it's clear they do not yet have the skills or experience to manage external constituencies. Will they move out of their comfort zones? Time will tell.

More interestingly, most of our professionals have not yet sought to become generalists, primarily because of their focus on serving and building their client base. Personal coaches like Dan Sullivan recommend focusing on our unique ability, delegating everything else we could be doing to achieve maximum effectiveness.

Does this fly in the face of becoming a generalist/company leader? For most professionals, it does. As an example, airline pilots are supposed to be highly focused professionals with years of training to do one thing perfectly: move an aircraft with complex controls and human cargo safely from one tarmac to another. In Sullivan's terms, they are using their unique ability to fly the aircraft, delegating everything else. However, not even one in 1,000 airline pilots will ever gain the skills to lead a large company, let alone manage a small one. The same is true of advisors. Many are highly focused, and have no intention of running a firm. They don't want to move out of their comfort zone.



How do you get your future leaders to get out of their zones? We put in another requirement for each lead advisor to have a master's degree in finance, tax or business - and they have to pay for it. So far, three have taken up that challenge. One got a degree in tax, two got M.B.A.'s The M.B.A. graduates expanded their skills in all areas of business operations, strategy, global economics, human behavior and agenda setting as they worked full-time and also went to school.

Some readers may think this policy is too extreme, that most practices can't afford to have people out of the office getting training and education for several years. Is it really necessary? As I see it, if you don't create opportunities - and rewards - for potential leaders to gain skills in the leadership zone, how are they going to get those skills?

If you're the owner of an enterprise, are you wise (or vain) enough to identify your successors and teach them everything they need to know? If you're a future leader, are you wise (or vain) enough to believe whatever skills got you to your current level of success will sustain your success as your job role changes?

The answers to these questions might be yes if you don't intend to change your business. However, if real growth is part of your plan, then the answers are an emphatic no.



A proper leadership plan will push people outside their comfort zones. Some will adapt and thrive, while others won't. Leaders-in-training will make mistakes, but valuable lessons will be learned.

Efficient? Not always. Messy? Possibly. But remember the old adage: "If you've failed to plan, you've planned to fail."

Harsh words, but all too often true. In doing your continuity planning, you've got to focus on who's continuing after you've moved on.



Glenn G. Kautt, CFP, EA, AIFA, is a Financial Planning columnist and vice chairman of Rockford, Ill.-based Savant Capital Management.