No path? No loyalty.
Fun fact: the #1 reason high-potential employees leave isn’t money. It’s lack of a clear growth path. Gulp.
Today we’re talking about ownership - specifically, how to mentor a team member who has lots of potential but isn’t quite ready to become a partner or owner.
Why?
Because if you don’t show your top employees a path to ownership, I can guarantee another firm will.
Listen, I know that not every person on your team pushing for ownership is ready to make that jump. It typically takes about 8-10 years for someone to make partner.
During that time, a few things are happening: technical skills are being refined, key business relationships are being developed, and the individual’s commitment to the business is also being tested.
And the questions being asked and answered during this decade are:
Are you smart enough? Aka are you going to mess up and put the reputation of this firm at risk (or get me involved in a lawsuit)??
Do other people think the work you do is valuable? Aka are you able to bring in work and increase the firm’s revenue?
Are you going to work long hours, when needed, to get the work done on time? Aka just how much time are you going to spend on the golf course with your buddies?
One particularly ambitious individual I used to work with (who was pushing haaaard for partnership), used to work a 16hr day each Wednesday in order to get his hours up, even in slow times of the year. Add in 70-80hr weeks during Tax Season, he had 650-800hrs of OT each and every year. That’s commitment, but it also sounded like hell to me..
Now, I’m not saying your best people need to work 3,000hrs / year in order to make partner.
But if you have someone on your team who is great and they aren’t quite ready to make that leap to ownership, how can you support their growth?
Because if you’ve noticed this person’s potential, recruiters are circling. Competitors are watching.. and your best people are fielding calls right now (especially as we head into Comp Review season).
So, let’s talk about two things you can now to help get them ready to become an owner:
Stop protecting them from the hard convos
If you’re avoiding giving them tough feedback on their work or if you’re still jumping in to smooth things over with hard-to-manage clients, you’re the problem. Why?? Partners don’t get the luxury of being shielded from anything - instead, they have to figure out a way through it.
So, instead of protecting your key employee - let them lead the next call with that difficult client, get them to email the client with a fee increase request or scope of work adjustment… and don’t bail them out unless things are truly going off the rails, but do debrief afterwards for “lessons learned”.
Remember: being an owner isn’t just about technical expertise. It’s about learning to stay calm, confident and accountable when things get uncomfortable.
Let them do a case study of one of your service lines
Pick a client group, a service line or location and ask them to do a mini-due diligence-type study of it: what’s the revenue, what are the margins, what are the team members’ utilization and realization rates, where are the inefficiencies, how would they grow it, and would they buy it if it were a standalone business, etc.
This exercise is excellent to help get them thinking like an owner, not an employee and gives them an intro to risk and strategy while sometimes sparking ideas for ops improvements that end up helping the whole firm.
As an added bonus - you’ll get to see how they assess problems in the business and whether they rely heavily on gut feel or can back up their conclusions and recommendations with data.
Side note - the worst thing you can do as a current owner is dangle the carrot of partnership in front of someone with no timeline, parameters or clarity on when they get to cross that finish line.
So, in conjunction with trying out the items listed above, I’d do the “normal stuff” too. Be honest with the employee about where their performance gaps are, agree upon some key performance indicators, and set a realistic timeline for revisiting the partnership convo.
Do this now because every month that passes without clarity on ownership increases the risk of losing your best person. And you and I both know that replacing a key employee can cost you 2x their annual salary - not to mention the loss of client relationships that walk out the door with them.
Friend: if someone on your team came to mind while reading this, don’t sit on it. Chances are, they’ve already been noticed by another firm. Book a call this week, and let’s put a plan in place before your competitor does. Here’s the link http://bit.ly/4ncJHPe.
Unfortunately, I’ve seen it happen time and time again - someone is overlooked for partnership or not shown a clear path to get there so another firm or business steps in and recruits them.
And they go. Pretty much every time. Why?
Well, because the other firm either
(1) gives them a chance to immediately step into a partnership role or
(2) they are given a very clear, very direct path with timelines to becoming a partner.
So, let’s avoid losing your very best employees. Let us help.
This kind of work - turning high-potential employees into future owners - is exactly the kind of work we love to do for our clients inside our Management Consulting engagements.
You're busy. You don’t need to come up with a plan, build out timelines, or figure out exactly what that person’s path to ownership should look like. We meet with you, understand your unique situation, and we handle it.
Aka you hand us the issue (“I’m pretty sure this person could be a partner, but I’m not sure they’re ready”) and we get to work.
Here’s what we’ll do for you:
Define exactly what it means to be an owner in your business (roles, expectations, buy-in structure, revenue targets, etc)
Evaluate the person’s readiness for partnership and flag what needs to be worked on before they’re ready to step in
Develop the roadmap for how they get from here to there - with milestones, metrics, and timelines they can follow (and you can hold them to)
Create the internal processes that support shared ownership - this is especially important for businesses with a small ownership group
And implement the plan so it actually gets done - not just talked about in a meeting and put on the shelf.
You’ll get our team (me, a CPA ) and Elanne (Operations + Change Lead) championing this for you - building out the project plan, having the tough convos, and getting this person ready to take meaningful steps towards ownership.
So if someone on your team immediately came to mind while reading this newsletter - let’s talk.
Book a call to discuss how we can help them make key business changes like getting a team member ready for partnership, drafting a strategic plan that clarifies your unique growth plan or fixing operational bottlenecks that are squeezing your margins.