Thank you so much for joining us in this interview series. Before we dive into our discussion about succession, our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
I started my career in a finance and accounting role, which was such a mismatch! I am far too social to be stuck behind a computer looking at numbers. I knew I had to get into an entrepreneurial role and be in charge. Conveniently, as I came to this realization I got laid off with a nice severance package, which gave me the freedom to take control of my own destiny.
Can you share the most interesting story that happened to you since you started your career?
This maybe isn’t so interesting, but a rewarding story. I was working with a new client. We had addressed the basic financial planning needs, like retirement and education. They had one more idea — take a year sabbatical in Spain, but this seemed impossible to them. We took the idea and ran with it though, and a couple years later we made it happen.
What made this special, though, is the unexpected side benefits that came from this year off. The husband was an architect, and began collaborating with some Spanish architects on larger projects in Spain, and in other parts of the world. The wife made contacts that led to representing a medical product for a company, and it lead to travel all over the world.
The lesson me is always pursue your dreams, even if it seems like a distraction from your larger goals. They helped their careers and income, and long-term quality of life, even though this wasn’t the primary reason for the sabbatical.
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was his in your life?
One of my favorite quotes is from my hero Winston Churchill — “You have enemies? Good. That means you’ve stood up for something, sometime in your life”. Taking action and getting out of your comfort zone almost always creates pushback from one source or another. Oftentimes it’s for no other reason than you are attempting something extraordinary, and it creates resentment. If you’re loved by everyone you aren’t pushing yourself hard enough.
What do you think makes your company stand out? Can you share a story?
What makes our company stand out is our commitment to our Life Well Lived Core Values (1. Kind and Thoughtful 2. Always Growing 3. Live Life to the Fullest and 4. Service to our community). We make our key decisions based on these values. Anyone working with us, whether as a client, advisor, or employee has to be a match for 3 out of 4 of the values, and number 1 — Kind and Thoughtful is the non-negotiable value that they must have. We share our values when we are interviewing job candidates — you either see them light up because it resonates, or they tune out, in which case they’ll likely self-select themselves out of the process. Our performance evaluations for our employees are based on alignment with our values.
We recently had a perspective client consider working with us. They matched our values of always growing, live their life to the fullest, and serve their community. They are in our target market, and would have been profitable to us. They most certainly were not kind and thoughtful, though. We encouraged them to look elsewhere. No amount of money to the firm would have been worth compromising our Live Well Lived Core Values.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
- Easy choices, hard life. Hard choices, easy life. I try to first tackle my most unpleasant tasks. These are almost always the most impactful tasks. It’s counterintuitive, but handling the things first that you’d most like to avoid reduces your stress and anxiety.
- 10X is easier than 2X, to paraphrase the great Dan Sullivan of Strategic Coach. Thinking big is simpler because there are usually only a few paths to achieving something big, whereas there are a many paths to achieving a small-time goal. There’s usually less competition when you’re thinking big, too. I used to bring on one financial planning client at a time. I find it is just as easy to talk to an advisor about buying his whole practice, and maybe bringing on 100 or more clients at once with the same time and effort.
- Living a balanced life. You’ll rarely see me working more than 40 hours per week. I think to have maximum effectiveness you need a great family life, great friends, health, fitness and down time. If you don’t think you have the time for these things, take that as a sign that you immediately need to spend some time away from work. I regularly step away during the work week to ski, hike or work out. I rarely miss my afternoon nap. My best thinking happens when I’m away from my desk.
Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.
We recently changed our firm affiliation, after almost 30 years with the previous firm. It became obvious to me that many of our goals would be more to difficult to achieve, if not impossible at the current firm. We did not have consensus in our leadership team to make a change though. I felt I had to build consensus for the change if it was going to be successful. I started out with a philosophical discussion of what we loved and didn’t love about our current firm. We had consensus on our goals, so we discussed each of the goals in the context of how can we best set ourselves up for success.
Once we had consensus that we needed to explore other options, we made a couple of commitments to each other. First, we would not make a decision to change firms unless the 4 members of the leadership team agreed. Second, we had to have 100% consensus in the leadership team on what firm we chose. This made everyone feel that their opinion was valued, and made the decision to change safer in some ways.
I’m 58 years old, and after 30 years with the same firm affiliation it would have been easier to stay put, retire, and let the next generation in our company make the hard choices. I would have had to compromise my growth plans, and my personal goals that feed from the business growth, though. Again — “hard choices, easy life”.
Ok, thank you for that. Let’s now jump to the primary focus of our interview. Let’s begin with a basic definition so that all of us are on the same page. What does succession planning mean to you?
Simplify your life so you can do more of what you love. Find the right team to set you up so you can exit the business on your terms. Make it so you end your career on a high note, working with the people you love, and hand off the tasks you no longer want to do. Maximize your selling price, and minimize the headaches for you and your loved ones.
What are the nuanced challenges often faced in succession planning? What are the strategies to overcome those challenges?
The biggest challenge by far is simply taking action. So many business owners are “Lone Wolves”, working on their own, with no peer network. Year after year it becomes more difficult to do business, with more regulatory requirements, changing technology, and more competition. You no longer are spending most of your time doing what you love. The business plateaus, then begins to shrink. Sadly, many business owners simply close their doors one day, with no business sale. Or worse, you become disabled or die, and leave a mess for your family. Many business owners would be better off finding a team to be a part of and have the new team be their death/disability and retirement successor. They can then focus on doing what they love for the latter part of their career.
How do you cultivate an environment that not only identifies but nourishes the hidden talents within your organization? What practices have you found to be most effective?
We all have a unique ability or talent — something that comes to us effortlessly, that we love to do, and we do in all aspects of our life. We work to identify each person’s unique ability when we hire them, and make sure their work aligns with their unique ability 80% of the time. We’ll move someone to a new role that aligns with their unique ability, even if it means we are leaving another area uncovered. When people are doing the work they love, you get out-size results.
What’s your philosophy on growing talent from within versus attracting external talents? How do you find the right balance?
We don’t lean one way or another towards internal vs. external talent. We just try hard to find the right person for the right seat, wherever we can find them.
What’s your approach to ensuring that succession planning is a holistic process, and not just confined to the top layers of management? How do you communicate this philosophy through the organization?
Succession planning needs to involve not just your upper management. In the financial services world it’s common to have a couple of key assistants, who are often younger than the owners. As the seller, you need to make sure your assistants are bought into who you are choosing as your successor. The success of the deal likely depends on having continuity of staff. The folks doing the day to day work need to feel like the successor aligns with their values on how to treat the client/customer. They need peace of mind that their world isn’t going to be rocked by this change. I think it’s always better to involve your employees — let them know that you are looking for a successor, reassure them that you want the best alignment for the team and the clients, not just the most money, and you want their opinion of the potential successors.
On the very first deal I did we didn’t pay attention to the needs of the key assistant. We had no idea that she had assumed she would be one of the owners along with us! She slow-walked her work for a while, then left and started a competing firm. We could have easily avoided a lot of heartache by spending some time understanding her expectations and needs up front.
What are your “Five Things You Need To Do Effective Succession Planning”?
1 . Begin working on what you want your succession plan to look like. The vast majority of business owners don’t think about what happens in the event of their death/disability/retirement at all, or until it’s too late. If you don’t a plan in place you are likely to leave a mess for your loved ones, and leave a lot of money on the table.
2 . Take steps to make your practice more “sellable”. Document and name your processes. Keep track of opportunities pending with existing clients or prospects. Deepen your relationships with your customers. Make sure a part of your client base is younger, rather than old folks who themselves will be exiting the relationship.
3 . Take steps to improve the value of your business. Make the tough decisions and cut loose the unprofitable relationships. Set up as much recurring revenue as you can, vs. one time transactional sales.
4 . Identify potential successors. Get to know your peers in the industry. Personal relationships are a far more effective way to find a successor than using a business broker or sending out a mass email. Dare I say it, your son/daughter/family member is likely NOT an effective succession plan.
5 . Get your plan in place, now not later. We get stuck in our pursuit of a “perfect” plan. Get a plan in place that meets 80% of your needs — you can always modify it later. No plan at all is the worst possible outcome for you, your family and your business value.
Off-topic, but I’m curious. As someone steering the ship, what thoughts or concerns often keep you awake at night? How do those thoughts influence your daily decision-making process?
Stuff doesn’t often keep me awake at night. When it does, I can’t say there’s any pattern to what it might be. This is somewhat unrelated but I think a great night’s sleep is critical to making good decisions.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would love to see a broader commitment to helping others. I think our society has become quite selfish and self-centered, which leads to less trust, shallower relationships, and bad behavior. As Kennedy supposedly said “one person can make a difference, and everyone should try”. Helping others leads to more personal happiness, less depression, and can set off a chain reaction of goodness.
How can our readers further follow you online?
I’m on X/Twitter at paulfranco10X, and LinkedIn. You can see my website at www.SuccesswithSuccession.com
Thank you for the time you spent sharing these fantastic insights. We wish you continued success in your great work!