For almost as long as I can remember now, many professional firms throughout Australia, and probably the world, have utilised two primary reasons why their firms have no internal options for succession.
1. The staff have not expressed any interest in becoming equity holders in this firm
2. We have no-one who is ‘partnership material’
Now, we won’t venture into addressing the first point, in part because the likely response will quite possibly be quite similar to the reasoning for the second point.
However, in terms of the second reason , we generally have our more senior practitioners telling us that they have no current senior personnel who are ‘partnership material’ because these staff are:
- Unable to network and introduce new clientele
- Don’t work or want to work the same long hours as they do and are more interested in work-life balance
- Don’t have any money or don’t think they should have to buy into the practice
- Lack real leadership
- Don’t demonstrate initiative
Regarding the first point, the inability to introduce new clients can be very problematic as the more senior and connected partners retire, the older clientele change their servicing needs. New clients are required to underpin a firms future and revenue; however this is likely to be a skill that will evolve with time and in its own special way. However, we need to acknowledge that as more experienced practitioners, we didn’t suddenly wake up one morning with all the capabilities of ‘partnership material’. In terms of work-life balance, no doubt the younger generation would confirm such goals are important but it is not the desire of all younger professionals to work the same long hours as current partners do.
What this highlights is a divergence in expectations which needs to be acknowledged head on. Many business owners, irrespective of industry, have strong beliefs that senior employees within their businesses are not suitable successors because of these variances in expectations; the younger generations don’t do things the way they do. This is often one of the most significant hindrances that needs to be overcome.
If we are going to find our future successors that offer an alternative to an external sale, we must learn to live with the fact that the younger generations will have differing visions for the business, take a different approach to managing the business and its people, work different hours and have different expectations. But, we must trust that if these parties express an interest in taking on ownership, that with a little guidance and mentoring, the eventual outcome, whilst different to our expectations, will result in a successful future.
We need to find a way past these generational differences in expectations for the good of succession.