Thank you so much for joining us in this interview series. Before we dive into our discussion about succession, our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
While in college, I worked as a bank teller. ATMs weren’t always convenient and carried hefty fees, so clients would often write a check out to themselves, and a teller would cash it. In the past, tellers would fill out the check for the client and have them sign it, but newly adopted regulations required the client to fill it out completely. One day a client came in wanting to withdraw money using a check. He asked me to fill it out like I had before. After I explained I couldn’t, he fumbled with it for several minutes before becoming embarrassed and admitting he didn’t know how. A quick glance at his account revealed he had a sizeable nest egg, but he didn’t know how to execute a relatively simple financial transaction. I realized there was an immense opportunity to help people better understand and manage their finance, and in doing so, alleviate stress and improve financial outcomes. I changed my major to finance that semester and have continued down that path ever since.
Can you share the most interesting story that happened to you since you started your career?
I graduated college into the Great Financial Crisis. It was difficult to find employment during those years especially for a recent grad. I cobbled together what work experience I could and after a few years found myself working for a major U.S. bank. At the same time, I was completing a Master of Business Administration program and working to obtain the Chartered Financial Analyst (CFA) designation. During a three-year period, it had been an all-consuming endeavor, but the end was in sight. Then I was unexpectedly laid off. Completing an MBA, earning the CFA designation, and being laid off within six months was quite the juxtaposition. In the moment, it felt like me and my young career had fallen flat on our faces, but the hard work I put in in those early years paved the way for future successes. This instilled in me the idea of “falling forward.” In football, the person with the ball is encouraged to fall forward, because it can earn them an extra 2–3 yards and potentially, a first down. Working hard and investing in yourself can help ensure you fall forward when the inevitable set back occurs. In business terms, this can include things like de-risking your personal financial strategy and having a contingency plan for the business.
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
- I’ve always gravitated toward the saying “this too shall pass.” It’s a mantra that keeps me from getting too high or too low emotionally. It helps me stay present for and savor the good times and forge ahead through the bad.
- I’m the father of a bubbling, energetic and genuinely funny toddler. Often, I’ll be tempted to catch up on emails in the evening or be lost in thought about this or that project when I’m interrupted with, “Dada you want to race with me,” which entails pushing a toy dump truck around the kitchen island on my knees until we both get dizzy. While the pull of work is strong, I tell myself this too shall pass. There will be a day when he doesn’t want to play with me, so I always race dump trucks.
- This can be a valuable mantra for many business owners. They are some of the hardest working people you’ll meet, but this phase of life shall pass. There will be a day they don’t want to or can’t work in their business anymore. Planning for what comes next both for their business and themselves personally can take years. So, enjoy the wonderful ride of running and owning your own business but also have a plan for what comes next.
What do you think makes your company stand out? Can you share a story?
Two things come to mind. First, Edward Jones has more than 19,000 financial advisors in communities both big and small across the United States. Our financial advisors themselves are business owners in their local communities. They live, work and play right alongside their clients. If you’re a business owner, your local Edward Jones financial advisor likely frequents your establishment, your kids might go to school together, and you’re probably in the same civic organizations. They’re uniquely positioned to understand your goals for both you personally and your business.
Second, Edward Jones has been a privately held company for the entirety of its 102-year existence. Approximately 34,000 of our associates are owners in the firm. This brings an ownership mentality and a focus on the long term that enables us to put our clients’ interests first.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
- Tenacity: Time and again, I’ve seen the difference between success and failure has less to do with intelligence or talent and more to do with a willingness to do the often unglamorous and tedious work others won’t.
- Curiosity: Intellectual curiosity is the precursor to learning and growing. Being genuinely curious about how things work can be a superpower. It’ll teach you best practices without having to make your own mistakes and give you the basis to challenge the status quo.
- Communication skills: Brilliant people can stall out because of an inability to effectively communicate their ideas. Being comfortable talking to people and honing your messaging can take you a long way.
Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.
A few years ago, I was asked to join and help buildout a brand-new team. The job responsibilities were largely new and undefined. I viewed it like joining a startup but with all the resources of a larger organization. I was excited to help shape the work of the new department. Soon it became apparent the work of a brand-new team was vast and varied. We had to build relationships with key stakeholders, articulate the responsibilities of the team, build processes and operating procedures to drive efficiency, hire and onboard new team members and simultaneously contribute to mission critical initiatives at the firm.
It was easy to let my attention shift with every email or meeting. Everything seemed important, but as the saying goes, “if everything is important, then nothing is important.” We had to ruthlessly prioritize and sequence our work focusing on the activities that would sustainably give us the most output per unit of input.
This experience gave me just a small taste of what business owners deal with every day. They’re constantly putting out fires, and there’s only so many buckets of water. That’s why its important for them step back from working in their business and work on their business and personal financial strategy ensuring their getting the most out of their efforts. A financial advisor can be instrumental in helping guide them through this.
Let’s now jump to the primary focus of our interview. Let’s begin with a basic definition so that all of us are on the same page. What does succession planning mean to you?
Succession planning is when business leaders prepare for the smooth transition of leadership and ownership within their company. A thoughtful business succession strategy helps you identify and address personal, financial and business needs so you can confidently step away from a privately held business on your terms. The approach you choose should not only fit your business goals but also align with your organization’s current structure.
What are the nuanced challenges often faced in succession planning? What are the strategies to overcome those challenges?
- Succession planning can be an emotional and challenging process of selling for business owners. Owners invest years, or even decades, of their lives and often their own money into growing their businesses, which can make it emotional and difficult to determine what they want the future of the business to look like without them.
- Edward Jones recently conducted a survey about attitudes around succession planning and found that while nearly two-thirds of business owners (64%) have prepared a business succession plan, 16% feel unprepared for their succession plan. Many face a slew of unexpected challenges and emotional decisions that come with planning their succession.
- The research revealed that ensuring continuity (41%) and addressing financial aspects (38%) are significant hurdles during business transitions. The challenges encountered by business owners in succession planning can vary according to the size of the business. In particular, larger enterprises tend to face more concerns related to financial and legal aspects (40%).
- What’s more, 38% of business owners who have yet to create a succession plan feel their business is not yet at a stage where succession planning is a priority. Top reasons business owners cited for not creating a succession plan include uncertainty of the business’ future (32%), feeling unsure of where to start (32%) and the inability to identify a successor (26%).
- Despite the emotional and challenging process of running and transitioning a business, only 37% of business owners are using a financial advisor as a resource.
- To overcome these challenges, it’s crucial for business owners to work with a third-party to find what makes the most sense for their business. Whether this be a financial advisor, tax attorney or legal counsel (or all three), having an objective perspective can help overcome these challenges.
How do you cultivate an environment that not only identifies but nourishes the hidden talents within your organization? What practices have you found to be most effective?
- Business owners should play with what works best for their organization to mentor and grow talent within the organization using that flow. Start by considering the following questions:
- Who is getting rewarded? Who is not getting rewarded?
- Who is more visible to me? Is there someone who I should be tracking closer to?
- Who may need more encouragement to showcase the work they’ve done?
What’s your philosophy on growing talent from within versus attracting external talents? How do you find the right balance?
Business owners should take into consideration their process for growing talent as they approach the succession planning and transition period. From our research with Next360 Partners and Morning Consult, we found that of those business owners who have created a succession plan, roughly seven-in-ten (69%) have already designated a successor for their business and are actively taking measures to train and prepare their successor. Among those who have identified a successor, three-fourths (73%) mention that the chosen individual had prior involvement with the business before their appointment and roughly half of appointed successors (47%) are family members.
What’s your approach to ensuring that succession planning is a holistic process, and not just confined to the top layers of management? How do you communicate this philosophy through the organization?
Edward Jones and NEXT360 Partners uncovered key factors that typically spark the need for a business succession plan, one of them being legacy. This is when the legacy of the business and the future of the employees and stakeholders of the business are the primary motivations for how the business will be transitioned from owner(s) to successors — which makes succession planning a holistic process. For business owners going through the succession planning process, focusing on what would be best for employees and key stakeholders can ensure that everyone involved is taken care of during the transition.
It’s important to make others feel like they know what’s going on, so being transparent about transition plans (once they’re finalized to avoid confusion) can ensure everyone is aware of where the business is at. Depending on the business, giving employees the chance to provide their thoughts on parts of the transition can also make people feel like they’re being brought into the legacy.
What are your “Five Things You Need To Do Effective Succession Planning”?
- Start planning early: You shouldn’t wait until you’re ready to retire to begin planning for your retirement. Instead, start planning earlier than you would think you need to. Creating a plan takes careful consideration and time, so take your time in figuring out what would work best for you and your business.
- Find a team of professionals to support you: Surround yourself with people who can help you and are accredited to do so. For example, many business owners are facing a slew of unexpected challenges that the guidance and support from professionals, like financial advisors or tax attorneys, may help alleviate. Succession planning is an inherently emotional process — you’re planning on passing down something you’ve spent so much time and energy on! — so having a third-party professional by your side can provide you the high-level advice that can be helpful during this time.
- Determine what type of legacy you want to leave: What do you want to be remembered for? What do you want your business to be remembered for? How do you want your business to continue to grow and flourish? These are all questions that can help you think about what your goals for the succession planning process would be.
- Carefully consider your successor: This is a big decision (they created an award-winning TV show about how big of a decision this is!) so make sure you give yourself enough time to figure out who the best person to pass the baton to is. Carefully consider your options and make sure to talk with your team of professionals about your decision.
- Check in on your planning process with your team: Speaking of your team, you should be meeting with them regularly to keep them posted on your wishes and goals. Some situations may change, so giving yourself a regular cadence to check in can ensure that the succession plan remains flexible and up to date.
Off-topic, but I’m curious. As someone steering the ship, what thoughts or concerns often keep you awake at night? How do those thoughts influence your daily decision-making process?
There are more than 33 million business owners in America today and the majority (51%) of small business owners are over the age of 55. The average age of when business owners plan to pass on their business is 63 years old, meaning that in the next decade, the country will be facing a major business succession boom. One of the questions that keeps me awake at night is whether business owners are prepared for the emotional and challenging process of handing off their businesses. The answer to that question will have a massive impact on our economy and ultimately consumers.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be?
- The thing that brought me in to this industry and remains my passion today is helping build financial literacy. I see the confusion, worry and stress finances can cause my friends and family, and I see the relief and empowerment they feel as they build their understanding and take control of their financial lives.
- Yes, financial advisors provide advice, but they can also be coaches and educators. They can help you understand the benefits of a financial strategy, weigh its tradeoffs and ultimately help you make the decision that’s best for you. This holds true whether you’re trying to figure out whether to buy or rent a house, how much to save for retirement or which successor is best for you and your business.
How can our readers further follow you online?
You can read more about Edward Jones’ research at www.edwardjones.com/NextInLine and you can find me on LinkedIn.
Thank you for the time you spent sharing these fantastic insights. We wish you continued success in your great work!