Replacing the Role Not Just the Body

In one of the great “Dilbert” cartoon strips of all time, the hapless crew of his fictional company is seen giving a product demonstration to a potential buyer. When the client hopeful asks for more information on a particular feature, one of Dilbert’s crew sheepishly admits, “We didn’t bring the guy who can explain that.”

I harkened back to this timeless parody of all-too-frequent corporate culture, when I spoke recently to a managing partner of a small-to-midsized firm in the Northeast who announced plans that he wanted to exit from full-time work in two years or less.

His plan was to have his two younger partners lead an internal succession strategy and assume the reins of the firm.

Okay, sounded doable enough until, like an onion I began peeling back the layers to expose some inconvenient truths.

Did the young partners have their own books of business?

Yes.

Okay, so let me ask you when you retire how are they going to continue managing their books and have the capacity to assume your clients’ work as well?

Um, maybe we can get a manager to do that?

Does the manager have his/her own book of business?

Yes.

Are you the primary rainmaker in the way of generating new business?

Yes.

Do any of your seniors or managers mine new business in the same volume as you?

No.

Do you see where I’m going with this?

I think so.

His plan was to replace the body but not the role.

I gently explained to him to that no one – least of all a partner – was going to put in the same amount of hours and work just as hard to make less money. After all, there was the cost of replacing the managing partner’s labor in addition to paying him for his buyout to consider. If the remaining number was negative, that affects cash flow.

Should that be the case, then his succession solution would likely be external in the form of an upstream merger where the younger partners could either receive equity day one or at least be given a path to ownership and be part of a larger firm’s succession plan.

He thanked me for my insight and said he would talk it over with his partners. Hopefully it made sense for him to re-examine his situation. We’ll see.

Sometimes I find you just need somebody to explain how it works.