As President Trump storms through his first 100 days in office, tweeting policies and dashing off executive orders, it reminds me how transitions at small advisory firms also can often set a tone, good or bad, that can be hard to forget.
If a successor fumbles in those first few months, the group may feel like they have a problem, not a leader. On the other hand, early successes can carry lasting benefits.
Of course, presidential transitions can be tougher than the ones awaiting wealth managers. That's because politicians often don't get the chance to pick their successors.
Nevertheless, here’s a tip sheet that should help many firms with similar transition challenges.
Be open. Transitions require public reflection from both parties. Successors should lay out their hopes and dreams in something akin to an inauguration address, just as owners need to think about their next chapter, as they draft their farewell. .
Show empathy. Privately, successors should acknowledge that their predecessor’s departure isn’t easy — emotionally or logistically — and assist in whatever way they can.
Start strong. Once in office, successors often don’t realize that the time it takes to set a course is short. They don’t have forever to prove themselves to partners and employees. Likewise, the honeymoon in most White House administrations lasts, generally, only the first few months.
Lead — don’t dictate. Many successors probably were hired as employees, and lack the founder's personality, leadership skills and ownership perspective. They have to learn to make the new arrangement work and that leadership doesn't mean that they get to say "no" to everyone or become the sole decision-maker.
Build consensus. What transitioning wealth managers can learn from the new president is that there is a timeline to all successions. Once the decision is made, everybody has to get on board. The new person in leadership also has to realize that he or she is accountable for making everyone feel good about the decision — not just those who were supporters.
Plan Ahead. If you're the outgoing leader, don’t wait until the last minute. To plan your exit, you need a runway — a long one — ideally, 10 to 15 years.
Pick carefully. Sometimes, successors have not been identified properly or tested thoroughly, unlike presidential candidates who are challenged, not only on messaging but also on their ability to guide a team, raise and manage money, withstand attacks and rebound from setbacks. So, make sure your successor is someone worthy because it may be the final act of your tenure. Last impressions, like first impressions, matter.
When it's time, go. For departing founders, don’t procrastinate. At many firms, the leaders don't want to deal with succession planning because they don’t want to give up control, the trappings of the job, their identity or they simply don’t know what they will do next. Play golf. Paint in Provence. Write your memoirs. Figure out what you're going to do and do it.
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