“Please, please let your team make mistakes.”
That was the plea from a leading US consultant at a recent conference I attended.
One of the keys to building a business that can continue to grow and perform in the long-term is creating future leaders, and it’s something that many business owners are struggling with.
When you reach the latter stages of your career you can feel like you’ve arrived. Finally, after all these years, you know your stuff and the business is going well.
So the idea of taking any risks with that lovely feeling seems almost ludicrous to contemplate.
In my consulting work, I’m seeing business owners really struggle with this transition.
It's hard to go from being the most skilled and important person in the business into a role that sees them developing younger team members so that they can take over when the owner comes to sell or retire.
The dangers in getting this wrong
Let me spell out the dangers of not addressing this, if you think this might be you.
Your best people will leave.
Then you’ll be left trying to run a business without your best people at an age where working hard is probably not your number one love. You did the long hours years ago in getting yourself here.
If you're thinking “I’ll just sell the business if that happens”, be warned.
Buyers are not stupid, and won't pay top dollar for a business that doesn’t have continuity and succession in place. And yes, they will speak to the potential successors.
These are major consequences.
Switching to a new leadership role
Your leadership role needs to change.
Why do existing owners struggle with this required switch?
I think there are three interwoven issues:
1. Your legacy
Anyone who's built a successful business is understandably proud of that.
Yet there’s more satisfaction in store if you can create a next generation of leaders to take over the amazing financial planning firm you’ve built.
Don’t sell out to a buyer that will destroy what you’ve taken a lifetime to create. Understand that leaving a legacy is an amazing way to go out.
Most firms I’m consulting with have great people coming through who are more than capable of running the business and taking it to its next stage of growth.
If you’ve built a business and a team like that, you should be proud.
Hold on to the fact that of all the small businesses that were started around the same time as you, hardly any even survived, let alone achieved what you have.
In the nicest possible way, all business owners are control freaks who really struggle to let go. And although no one wants to admit it, it’s a trust issue.
How good were you 10 years ago?
Not as good as you are today is the answer you’re looking for.
So how did you learn what you know now?
Through making an endless series of mistakes; mostly small, sometimes big.
That’s how your team learn, too. Please let them fail, and then support and help them unpick the learning opportunity within each failure. Trust good people to figure it out with your help and mentorship.
Let people make mistakes while you are still in the building.
To be clear, I don’t mean business-ending catastrophic mistakes - I mean the garden variety mistakes you’ve made and learned from your whole career (just like everyone else).
If you’re really not sure that a decision is the right one, say so.
But encourage the next generation leaders in your team to take the decision anyway if they believe in it. Then sit back and observe the outcome together.
Only one of two things can happen:
a) It goes pear-shaped, just as you predicted. The next generation leaders learn something, but through genuine and slightly painful experience; not through lecturing or theory. (And your street cred goes up too in their eyes.)
b) It works, much to your astonishment. Now you get to learn something. And it’s never too late to be learning new ways of doing things, is it?
3. Switching from player to coach
If you can get your head around this third point, it might just be the defining phase of your business career.
A happy and fulfilled retirement awaits you on the other side. Or, if you want to stay active, an endless supply of invitations to mentor other business owners who look like you, but 20 years ago.
It’s all good.
Let me say this in black and white: this is not a demotion.
Stop being the indispensable expert in your own firm and start being a coach to your team. Switch from player to coach.
Start passing on what you’ve learnt over a career in business. It’s only when you start doing that, you realise how much you’ve learnt.