Success and Succession: Unlocking Value, Power, and Potential in the Professional Services and Advisory Space

Chapter 3Ordering Off the Menu

By working faithfully eight hours a day you may eventually get to be the boss and work 12 hours a day.

—Robert Frost

In 2002, there was outrage by baseball purists when the All-Star game was called while the score was a tie. “There's no tie in baseball!” they cried. That's not true in business succession. Sometimes the best outcome is when neither side feels like they won. A tie is a compromise; instead of nobody winning, everybody wins.

There's a healthy tug-of-war going on during any transition. Founders can end up thinking they can accomplish whatever they want with no bad consequences because they started the business. Successors can also overestimate their importance, assuming they are owed more than they deserve. The right answer is usually somewhere in the middle. But where's the middle? Since this section of the book focuses on the operating issues, this permits us to emphasize the deep importance of the middle ground being what's best for the business, both in its day-to-day activities and for its long-term strategic success.

Choices Have Consequences

In talking to firms throughout the United States, regardless of geography, size, or client service model, we observe that founders want five things:

1. To maintain their current income level
2. To work fewer hours—or not at all
3. To maximize current enterprise value and retain equity upside
4. To maintain the independence of the firm
5. To find a successor or successor group

Some firms add a sixth item ...