According to The Family Business Consulting Group’s co-founder John Ward, a founding goal of our firm was to model the best of what we learned from the most successful family enterprises that we had come to know — to practice what we preach. “We hoped to build a business for the long term and aspired to indefinite continuity,” he explained. “Of course, critical to continuity is successful succession of ownership, governance and management. In these areas as well, we sought to model best practices from and for our clients.”
The biggest test of our succession process began in 2017 in anticipation of our managing principal Drew Mendoza’s plan to step down in 2020. Without a clear idea of who his successor would be, a Leadership Continuity Committee was established with Greg Greenleaf as chair and comprised of a cross-section of FBCG consultants, directors and staff. Reviewing our strategy to guide our selection of the individual responsible for future implementation would provide the basis for our understanding of what we would need in our next leader. The committee would look at all options both internal and external and be responsible for developing the process through which the choice would be made.
Committee chair Greg Greenleaf describes their work:
Drew had served as managing principal for nearly 20 years. Replacing him would be no easy task. He had warned us for years that he would step down in 2020 and that time was quickly approaching. Most had difficulty imagining anyone else in that role. Knowing its responsibility, the board formed a Leadership Continuity Committee (LCC) comprised of representatives from the board members, consultants and senior members of the management team.
The committee began to develop a “Leadership Continuity Process and Plan” outlining the planning, recruiting and decision-making steps the LCC would use. The plan was approved by the board and became the template with which the committee focused its efforts. To keep the entire firm informed, the LCC reviewed progress at the firm’s quarterly meetings.
During its monthly meetings, the LCC focused on several key initiatives: researching other professional service firms for potential new leadership models; exploring how the new leader would interact with the board if he or she was not an equal owner as Drew had been; and affirming that we would explore both internal and external candidates. The entire firm was polled for any members who might be interested in the position. Vice president Kristi Daeda and another member of management raised their hands and both were provided resources and opportunities to strengthen their management skills.
Over the fall of 2017, the committee discussed the importance of the new leader having both the skills and experience that would align with the firm’s strategic plans. The committee reviewed the existing strategic plan and surveyed the firm as to where FBCG growth would likely come from in coming years.
In August, the board reviewed the LCC’s recommendation of an outside recruiting firm. The conclusion was that we were moving too fast. More than two years remained before Drew would step down and recruiter promised a selection in six months. The board asked the LCC to focus on developing a job description for the new leader and to work on financial modeling associated with bringing on an external candidate. Drew and Kristi were asked to model what the FBCG staff would look like if Kristi were the next president and Drew handled business development.
November brought a pivotal meeting addressing both ownership and leadership continuity. The board reviewed the Finance Committee’s recommendation on restructuring ownership to promote affordability and the LCC’s plan to identify the next leader. While addressing succession, the board reviewed a draft president/managing principal job description and Kristi’s presentation on how the firm would function financially and organizationally with her as president. The board also focused on the cost of engaging a search firm vs. evaluating Kristi as the sole internal candidate. After robust discussion, it was unanimously and enthusiastically decided that there was no need to look further: Kristi was the right person to lead us forward.