Embracing the Seas of Change

The journey of a professional service firm owner can simultaneously be exciting, daunting, and fulfilling. Many have analogized this endeavor to that of a sailor crossing mercurial seas.

The hardest part of any voyage is letting go of the past comforts of the shore and beginning your courageous trip. As you reflect on the early days of your business, you clearly remember the cash flow constraints, the scarcity of time, and the importance of each sale. However, in retrospect the real challenge was merely letting go of the security and comforts of someone else piloting the boat and making decisions on where and how to sail.

Franklin D. Roosevelt said it best, “To reach a port we must sail. Sail, not tie an anchor. Sail, not drift.” You have begun the first phase of the ownership lifecycle, and eagerly awaited the scaling and selling phases of your journey.

The adventure of your professional service firm has been filled with heroic stories and memorable events. The survival of the untimely waves of change such as the global pandemic, the tragedy of 9/11, and of course the Great Recession are just a few of the external storms you weathered. 

Owners who’ve made the trip can boastfully proclaim to fellow sailors that “A smooth sea never made a skilled sailor.” Clearly, these events made you a better business owner and enhanced our confidence of navigating the challenging business oceans.

However, the real success, once you’ve left the shore and during the scaling phase of your journey, was the evolution of your business strategy, economic models, and the refinement to your staffing models towards a higher quality of talent. These advancements enable you to explore new markets and provide expanded services. The trek to these new lands changed your view of the seas.

At this point, letting go of the shore and many of the strategic decisions on your journey seem smaller than they once did. The last phase of the journey of a professional service firm owner is unique and the most challenging. The business you built is now more complex with sophisticated gauges (KPIs) and more challenging competitive markets for business and talent.

A new introspective lens enters the landscape. This lens brings into focus relationships with long-term clients and loyal employees that have been a meaningful part of your voyage. As the voyage nears its potential next port, the selling phase brings new skill requirements to navigate the heavy winds and seas during ownership transition which may occur here.

As a skilled guide to privately held business owners of professional service firms, a few words of caution on your transition from ownership as you reach your destination. Beware of the Sirens.

In ancient Greek mythology, Circe gave Odysseus one final piece of advice. This was to beware of the Sirens – bird creatures with women’s heads – who ensnared passersby with their beautiful and enchanting singing. To ensure the crew maintained their navigation while passing the Siren’s Island, Odysseus instructed them to block their ears with wax. He, however, was securely strapped to the ship’s mast, allowing him to hear the enchanting singing without succumbing to its allure.

Three distractions often appear as an owner nears the end or next port of their trip that can throw them off course:

• Lifestyle Gap– The loudest playing Siren is the feeling of others having something that you do not have. The feeling that your peers have more time or money to do things you desire to do. The neighbor who is traveling constantly with family, the past business owner with new toys and pleasures are alluring to a business owner. In an effort to acquire liquidity to achieve what others seemingly possess, owners may be enticed to sell too quickly, make untimely business moves, and cause talented professionals to depart from your business.
• Ego– Don’t let your ego overplay your ability: The belief that your firm is capable of scaling faster because of a peer’s scaling timeline or recent competitor M&A activity. The proven ability to scale your firm and a favorable growth outlook are critical measures to a premium market valuation. However, avoid the temptation of scaling too quickly because of your succession plans or peer’s recent advancements. But most importantly, avoid the temptation of believing that the success of your business is about you, but rather the success of the team.
• Energy– The lack of energy is the most dangerous of them all. As professionals advance in age, their lack of energy is often clear to the exterior world but blinded to the owner himself. Energy and drive are vital to the success of a leader of a dynamic professional service firm. Owners should have an honest view of their energy levels and commitment to the business as this will greatly impact value and transition timelines.

The dynamic voyage of your firm will likely not be spoken of in mythological terms in the future. The relationships with customers and team members will likely be the lasting memories that will remain.

Hopefully, the journey of your firm will also be filled with monetary treasures to accompany your vast collection of business experiences.

Take the first step in preparing for your journey:

• Join Collective 54 and Subscribe to Collective 54 Insights to access resources, expertise, and a network of leaders that assist professional service firms in managing the ownership lifecycle phases.
• Connect with me on LinkedIn for a confidential business owner consultation.