Over the years our consulting firm has received many calls from second generation CEOs
of advisory firms. They have recently
taken over the helm of their firms, and
usually tell us they “don’t know what to
do” and need direction.
As we explore the details of each
firm, we find that the advisory industry is doing a poor job of training the
next generation of advisory firm leaders.
From our perspective, most new CEOs
and other firm executives haven’t been
trained — at all.
We’ve also come to realize that this
situation is not the fault of most firm
owners. Training leaders is a challenge
in most industries. And because most
first generation advisory firm owners
were never trained at leadership, they
are at a disadvantage.
HERE’S THE PROBLEM
Business school wisdom that many of
today’s firm owners have gained has
come primarily from the perspective of
starting a business, as opposed to taking the leadership role in a successful,
mature business. Consequently, training
new leaders and relating to the challenges that they face as CEOs and other
executives is hard for founding owners
to wrap their brain around.
The crux of the problem is the skills
required to launch and grow a business are different from those necessary to improve a successful business.
Therefore, it’s difficult for most advisory
business owners to train their new leaders as executives.
Here’s a common example: Due to
the founding owner’s experience start-
ing a firm from scratch, many of today’s
leadership training programs tend to
focus on business development and
vision, mission, values and growth goals
— because that’s what founding owners
had to do to launch their firms.
But in mature businesses, bringing
in new clients and setting goals is only
one problem that needs solving. Other
facets of the business need attention
and balance, such as, employee management, financial strategy, allocating
capital resources, operational process
and sales strategy.
Further, the challenges many mature
advisory firms face today revolve mostly around providing consistently and
competitive high-quality client services
and client experiences, while maintaining and growing profitably. To learn all
these areas at once can be overwhelming for the next generation leaders.
Most founding owners teach new
CEOs from their personal perspectives
because it’s all that they know. And,
when confronted with the suggestion
that their next generation CEOs need
different skills, they often respond:
“that’s not the way I did it.” This isn’t
the recipe for success in transitioning a
company to new leadership.
TRAINING FUTURE EXECS
So, how do you train the next generation
If you take the business school
approach to training CEOs, it means
training in the technical skills of business management: allocating capital,
monitoring cashflow, quality control,
management, etc. There’s much written about these skills and they can be
learned with a library card.
But here’s the kicker: We have learned
How to Prepare our Future Leaders
The next step in the evolution of the independent advisory industry is
learning how to train the next generation of leaders.
We find that the
is doing a poor job
of training the next
generation of leaders.
From our perspective,
most new CEOs and
other firm executives
haven’t been trained
— at all.
THE FAST TRACK
By Angie Herbers