On the other hand …there is a whole side to transition that needs attention. Ignoring it could have unfortunate consequences for your money and the outlook for your firm.

On the other hand …there is a whole side to transition that needs attention. Ignoring it could have unfortunate consequences for your money and the outlook for your firm.

By this time in the 150-year-long history of professional service firms, many owners have experienced a transition and I’m willing to bet that it wasn’t entirely smooth. It isn’t, in most firms – whether you acted as the generation that now owns and leads the business, which I call “G1” or whether you are the generation that has or will take over from them, which I call “G2.”

When all this planning and calculating and negotiating is done … when both the G1 buyers and G2 sellers have paid the last bills from the accountants, the management consultants, and the lawyers … what assets have really been sold or bought?

And another question: Why is it that – despite all this consideration, all the careful calculations and expense – people still complain that transition isn’t easy? Sometimes, in fact, it is even fatal. How can that be?

I believe there are four major reasons. First: It isn’t easy to transfer leadership. Although the last thing you want is to disrupt your firm’s continuity, resilience, and morale – or to disturb the good will that buffers your reputation – you invariably encounter internal and external resistance to change, along with the ordinary pitfalls to enduring success.

The second reason is because you have focused on “the deal,” rather than on what is really being sold or bought. Here is my list of assets that are the real basis for the firm’s value: The firm’s reputation; its culture and traditions; its principles; its relationships with staff and the outside world; and its excellence.

The third reason for the difficulty is personal. As I gathered material for my latest book, Communication by Design, I spoke with many principals. Repeatedly, I observed generational disconnects. I saw how much the G1/senior partners’ justifiable fears of becoming irrelevant and powerless could skew their judgment. I observed how much these senior professionals felt that retirement could destroy the self-image, the stature that they had worked all their lives to build. These personal concerns are very potent.

The fourth and final reason is that the role of the firm’s leader is very hard to replace. Recent public relations research yielded that, in the corporate world, a CEO’s reputation can represent nearly 50 percent of a company’s reputation. Half!

Leadership is, above all, a performance art. If you want to do your own measure of a leader’s worth, tally how well he communicates when s/he:

  • Verbalizes the firm’s agenda

  • Inspires staff to perform at the highest level

  • Persuades great clients to join the roster

  • Negotiates coherently

  • Convinces a journalist to cover – or ignore – something that happened

  • Voices strength in times of stress

  • Teaches younger members of the firm the importance of becoming owners – not for the cash or the return on investment, but for the intangibles: their stature, their personal trajectory, their fulfillment.

Perhaps 50 percent is too little – certainly for the leader of a professional services firm! Since CEOs – or lead partners – are considered to be the face and voice of the firm, having someone else “performing” in your place will greatly affect the rest of your staff, your clients, prospects, association colleagues, consultants, advisors, bankers, vendors – in short, all the numerous communities involved.

Stewardship is a bear. Making sure that the next generation will be equally formidable is a tough job. Sure, you are training G2 to develop staff, handle money, market your professional services, and manage accountability. More importantly, you’re communicating to G2 which principles have worked for the firm – or not; what constitutes the foundation of your own competence and success; why you started the enterprise or took its helm; what you wanted to win and provide – and to whom; what worries kept you up at night; when you first felt emboldened; and what was different from what you thought it would be. All of this needs to be conveyed to that next group of leaders.

Succeeding generations will always have different expectations of your firm, different definitions of success, different experiences. This industry, the economy, and our national character are in perpetual transformation. Values change. Your mission is to communicate what will be enduring – but also different – when you are no longer responsible for the firm’s interests.

Therefore, transition is only partly money and the rewards for your very, very hard work. It is also the vision thing. And the strategy thing. And the legacy thing.

Transition is also about communication, which you do by your every act as well as word. It isn’t such a stretch, then, to consider public relations an important part of transition planning and implementation. Public relations – however you define it, but please broaden the definition well beyond publicity – helps people to identify, shape, and tell their story to many different constituencies, to achieve a desired result.

From a public relations standpoint, transition is a far-ranging process, not an event. It is an attitude, not just spreadsheets and contracts. But, whatever you consider it to be, it is messy.

I hope that this expands a new view of transition. Now, here’s the bright news I see through the transition window.

The boomer generation apparently will not be retiring so quickly. According to AARP research – which I found in its 2020 Vision Series – in five years there may be 4.3 million more jobs than workers. Furthermore, 69 percent of people between 45 and 74 will keep on working past the age of 65 – because it’s too costly for them to retire, because they expect to live longer, or because they feel they’ll be bored. [That will certainly skew the supply and demand for shares of your closely-held company!]

As professionals, you may actually have planned to sign on for life. But now, the G2s will actually need to keep their G1s around – with their institutional knowledge, their bankable client relationships, their ability to synthesize complex thoughts, their ambassadorial aura.

Bill Caudill, one of the founders of Caudill, Rowlett Scott Architects (CRS), was a great G1. Fairly frequently, he issued a “TIB”- which stands for “This I believe” – memo to the CRS staff. These TIBs were collected and published and are now the basis for the CRS Center Archives at the University of Texas that you can tap on line.

One of Caudill’s best TIBs observed that, although a design firm has a start date, “beginnings – and endings, for that matter – are our own inventions.” He pointed out that “… A pup doesn’t begin to live when he joins the litter. A newborn pup of a registered litter is part of a parental living substance. Look at its ‘papers.’ Seeds are part of living plants. There is no beginning… And there will be development one way or another.”

To ride on Caudill’s coat tails: Transition needs to be part of the living substance of any firm. It starts, not when the lawyers draft their agreements or when the accountants start their calculations, but when the key goes in the lock the first day of the business on a door that, if all goes according to plan, will never really close.

Joan Capelin’s specialty as a public relations master is to build and protect the reputation of professional service providers, especially those in the design and construction industry. She founded Capelin Communications, Inc., a prominent public relations consulting firm, in 1981 and has since earned numerous awards and accolades. She is also an active speaker and a regular contributor of articles about professional services marketing, communications, and management. Joan Capelin’s acclaimed book Communication By Design is available through the Ă–stberg Library of Design Management and the DI Bookstore.