John Tyreman 0:19

Hello, business developers, and welcome back to another episode of Breaking Biz Dev. If this is your first time here, thanks for joining us on this podcast, where we like to beat up and break down topics related to business development in professional services. My name is Jon Tyerman, and as always, I'm joined by my trusted co host, Jon. Mark Wainwright.

Mark Wainwright 0:40

Hi, John, we are going to talk about and very interesting topic. And the, the, the reason this came up is it seems like again and again, the firms that I talked to early on in the sales process, learning more about them, folks who come to me that may, may need my help talk about the future. They talk about future generations. They talk about how, they have to build future leaders. And they're a little bit unsure of, in my case, their, their sales skills, you know, their ability to generate revenue. So this is a good one. I really like this topic.

John Tyreman 1:21

I'm excited about this one too. The silver wave is real too. There's a lot of boomers that are retiring out there. Um, so before we get into the meat of our episode today. I just wanted to remind folks, if you were enjoying this content, if you're enjoying the stuff that Mark and I are putting out, please give us a rating and review on Apple or Spotify or wherever you listen to podcasts. Uh, subscribe to us, all that stuff. we also have another review that I'd like to read on the show before we get into our topic today.

Mark Wainwright 1:50

I love these. They just, they, I just, I just jumped in there. John, I, they just make us feel so good about ourselves. I love him.

John Tyreman 1:57

I think it's a great way to kick off the podcast. So, um, Tyler, the recruiter says there is so much value here. This podcast is awesome. I love that it is practical and gives examples that are easy to understand. I also like the tactics that they share that are easy to implement. I've learned a lot so far and I'm excited to learn. Even more over the coming months, highly recommend. So thank you, Tyler. Thank you so much.

Mark Wainwright 2:24

Yeah. Thanks, Tyler. That's, that's, it's great to hear it. John, you and I believe that podcasts are such a powerful tool. this is why we think that podcasts are such an important part of our business. And it's such an important part of, of any professional services firms business in that, it lets you share your expertise. it lets you help other folks and sure, lo and behold, it's a really powerful tool, that you can use, to find new clients, find new partners, whatever else it is. So yeah, it's great. So thanks, Tyler. Great.

John Tyreman 2:57

And that that's from Tyler Wiggins. If you are part of a structural engineering firm, he helps you find those hard to find structural engineering job candidates. So if you're recruiting for that role, if you have a role that maybe you're, you've been trying to fill for a few months, reach out to Tyler, he can help you out. All right. So Mark, let's get into how business development supports leadership succession.

Mark Wainwright 3:22

Yeah, there's a big what and a why kind of behind this whole thing. And I've started to see this pattern emerge and, and I kind of want to, I kind of want to walk through why I think this has evolved to be such a big issue. And, and in all different types of professional services firms and all different types of expert firms. I think that, this is an issue. If it's not now, it will be at some point. in the future now, from my perspective, kind of some of the stuff I've seen here is that, many of the firms that I talked to again, early on mentioned this, this, this lack of, of sales acumen or sales skills, uh, uh, Revenue generation when it comes to their future generations, right? There's a lot of things that professional services firms need in order to run a good functioning business. You know, there's lots of different functional areas beyond sort of your expertise, your service delivery. There's, there's finance, there's human resources, there's, there's sales, there's, there's marketing. So there's all these different functional areas. And a lot of times firms find that they are deficient in, in, in certain areas. And I had to tell you, you know, and I'm not just pointing the spotlight on the work that I, that I do, John, but so many times. Like revenue generation and sales is one of the big ones, you know, it's just, it's, it's just is so, here's my spin on, on why that, why that arrives and why that kind of comes up. Um, I think that there's a lot of firms out there. There's a lot of professional services firms that are founded by individuals who are entrepreneurial. Right. They've started firm by themselves, or they started with a small cohort of, of their peers. Maybe they break off of a larger firm. So they want to do something different. They want to create their own firm. So they. So they, they, they, they, they start off right. However many years ago, they're good at, at just bootstrapping, right. They're good at doing what needs to be done. Lo and behold, you know, they might be good at, um, a little bit of marketing and revenue generation. And somebody sort of knows their way around the books and, you know, they start hiring people. And, so they start creating a successful firm, still small, but they started creating a successful firm. The people that they hire. However, aren't necessarily cut of the same cloth, meaning that entrepreneurs don't necessarily hire entrepreneurs, right? These strong leadership character people don't necessarily hire more of those folks. So the firm grows with a handful of these sort of bootstrapped, you know, Leaders, owners, longtime founders who are reasonably capable at all these different functional areas, but they've created a, uh, an organization that is largely, you know, technically focused, a bunch of doers, uh, uh, skilled people, but often these people will lack, you know, sort of expertise or some level of acumen in these different functional areas, you know, what it takes to run a business. So. They find themselves where they're getting ready to retire, or they're trying to build equity in the firm so they can sell it off to other people. And they see that there's a few big holes in their next generation. And that's kind of a little bit what we're, what we're going to talk about today. Plus, and maybe it's, maybe it's, it's, it's, this is one of the biggest problems of all is that, you know, these entrepreneurs don't want to replace themselves. Right. They've built this wonderful business, their names on the door. Uh, you know, they've been owners for a long time. They have, they're, they're well regarded, they're recognized authorities in the industry, all those types of things. And it's really hard for them to just process the, the, the, the reality of needing to, to have someone come in and replace them, someone to be a new owner, someone, maybe a new name goes on the, On the door, you know, who knows, you know, so it's really hard for people to do that. So they hesitate and they hesitate and they put it off and they don't do succession planning. They don't do, you know, any sort of leadership development. They don't do any of that stuff. And now they're on a tricky spot. Right now they're ready to retire, uh, but their, but their next generation folks aren't ready to go. And I see this need again and again and again, specifically when it comes to sales, but it's also, it's also seen in sort of the firm's ability to market itself.

John Tyreman 7:55

you talked a little bit about leadership training and, and, um, and upskilling, I guess, for lack of a better word, the folks that you have internally, um, do you, in your opinion, do you think it's possible to teach that entrepreneurial? Mindset, or is that a characteristic that's intrinsically a part of certain people, but not others.

Mark Wainwright 8:17

I think some will come into the organization with those types of skills, but it needs to be developed. others, will have strong tendencies towards leadership and entrepreneurialism and that sort of thing. One of the challenges is retaining those folks, you know, because they'll, they'll want to. They'll want to jump off and start their own firm. So being able to retain those entrepreneurial leaders inside of a larger organization is always a challenge. And it's a bit of a, a high wire act. You know, it's keeping them engaged, keeping them involved, giving them, giving them the sort of leeway. They need to be, entrepreneurial and be leaders and everything else while still, playing like they're a, a good teammate. it's tricky. It's not. it's not a, it's not a foregone conclusion that they're just going to hang around forever and be sort of the de facto, you know, next generation of leaders. Sometimes they'll, sometimes they'll jump ship. So good question.

John Tyreman 9:08

Yeah, you got to make it, I suppose that's part of, you know, what your whole program needs to be focused on is how do you incentivize those folks to stay around, at least as part of it. I guess we'll start on the five end of our marketing sales continuum. We'll start with the sales. So what can sales. Teams, what can sales as a business function? How can that support leadership transition?

Mark Wainwright 9:34

Yeah. We've, we've talked about some of this, maybe in a slightly different, different way. We've talked about how you can develop people at different points in their, in their careers, but you know, for the, for the service of this conversation, you know, what, what needs to happen in order to start developing these people? Well, Firm founders, these entrepreneurs need to recognize how important this is. And they need to start introducing young team members to sales, to new business conversations, you know, the, the, the nitty gritty of pricing and developing proposals and being involved in negotiation and things like that. They, these people need to be exposed to it. Right? So, so they start to see how it works. They just see the ins and outs and, and the steps and the process and all of that, and then they need to start practicing. Which means that they need to start developing pricing on their own. They need to develop proposals. They need to have proposal conversations. They need to be able to navigate sometimes tricky sales opportunities where there's, you know, some, some challenging negotiation involved, other things like that. And, you know, all of that leads to, you know, if someone's just practicing something inevitably, they're going to screw up. Right. So the whole thing with practice is that people are going to fail, but failure is a powerful way to learn. So these longtime firm owners who know how to do this stuff, who want to, who have this urge to rush in and say, no, no, no. Okay. I'll take it from here. You know, somebody's screwing something up. Somebody's not doing something, they need to let these future up and comers, in, reasonable situations, you know, these can't be the highest stakes situations, that a firm faces where you're letting someone practice and fail, but in reasonable, appropriate situations, young up and coming firm leaders need to practice. They need to fail. They need to stub their toe and they need to learn because. If they learn and they mess something up and they're practicing and then they're getting a little bit better and they're improving, then they're really learning. Then they're really knowing the ins and outs of it. And eventually they'll get better and better at it. Cause that's what practice does. Practice helps us get better and better at it, but that's, that's, that's critical. So it's, it's early on these, these entrepreneurial minded from leaders need to just break free of that. You know, we do everything, we generate all the business, we run the firm, we just have a bunch of other people here to just to do the, do the other stuff that we don't want to do anymore. They need to break free of that mold and they need to start exposing people early on to some of this, they let, need to let people practice, they need to let people fail and. Eventually they need to let those people improve and take the lead

John Tyreman 12:26

Well, in what the one thing that I'm, that keeps popping up in my mind, as I'm hearing you say this, Mark is this. Sales cycles in professional service industries can be, you know, 120 days. They can even be like years long. Right? So the lead time on developing these leaders is years upwards of a decade. Probably.

Mark Wainwright 12:49

Right. Right. And compounded by the fact that there's just not a lot of them, you know, there's other, there's other, other professional services firms, you know, other industries in general have much, much shorter sales cycles. You know, they're selling things that are maybe more transactionally, you know, lower dollar, you know, so their sales cycles are higher. They're just selling the widgets faster and faster with. Professional services firms, these long, complex, uh, sales cycles mean that people who are practicing don't get that many to use a baseball term. They don't get that many at bats. You know, they don't get to step up to the plate and swing a whole bunch. So practice is critical. Is critical and it needs to happen earlier and more frequently than most longtime firm leaders are, prepared, to have them practice. So yeah, there's just not that many opportunities to practice. So you got to make the most of them.

John Tyreman 13:39

what happens if, if a firm doesn't develop those leaders, right. And the principal wants to retire,

Mark Wainwright 13:46

some longtime firm owners may just want the firm to, to just, write off into the sunset and, have their legacy sort of stay with. Stay with them, which usually means that that they'll just sell off the firm or they'll, liquidate it in some way, or maybe they'll just, on some Friday, they'll just, turn the lights off and lock the door and walk away. Right. Um, but, but, but a lot of times this looks like, um, they start, you know, seeking. Buyers, you know, so they're trying to, they're trying to position their firm for, for an acquisition, but the catch 22 in that whole thing is that the, the, the value of your firm is based on current revenue and also. Influenced by future revenue. So if you're able to show a nice,

John Tyreman 14:39

that's a good point.

Mark Wainwright 14:40

a nice, you know, growing, annual revenue sort of picture, and you're able to point to a really great pipeline that, can be continually managed by this, these new up and comers after the, the, the firm leader, you know, sells the firm. Then you're in a much better position for a merger or an acquisition or something like that. So, um, that's a huge consideration. If you just sort of. Give up on all of that. If you're just barely hanging on, you don't know what your pipeline looks like. And you're trying to tell the firm you sell the firm. You're not going to be in a really, really strong, um, position. So, yeah. just to finish the, the, the other eventuality or the other possible path is that. You want to sell your firm to your folks. you want to create a firm, that has ongoing value. You, you don't need to, to sell it. You want to transition your ownership to your second generation folks. The people that you are transitioning the firm to need these skills. They need this broad spectrum of, sales, marketing, HR, finance. You know, of course you have some. Potential experts in these areas. Maybe you outsource some of this stuff to, a fractional CFO, whoever, but, you need to have people that kind of understand that stuff about, about running a business. And, That's all part of this. So if, if you just want to turn your back on the organization, lock the keys and walk away someday, or sell it to some, to a, to an outside party. Great. You can do that. Or if you want to sell it to inside folks, both of those, both those scenarios really require that you've got some, that you, that you. Have a good sales acumen that you know, your marketing, that maybe your firm is positioned really well, you know, that sort of thing. So yeah, it's there, there is, there is no part of this sort of next chapter for longtime firm owners. That doesn't underscore the importance of, you know, good succession planning, whether you're going to sell it to a third party out there or whether you're going to sell it to your employees. Um, you know, all this is all really important for all that.

John Tyreman 16:41

So I guess the big takeaway that I, that I'm hearing is, um, sales functions within a business can support leadership transition or succession planning. Yeah. With a good training program,

Mark Wainwright 16:54

Yeah, yeah,

John Tyreman 16:56

future leaders and, and, and building their sales skills.

Mark Wainwright 16:59

yeah, formal, informal, training, coaching, you know, mentoring, all of that, just exposing the next generation to, just that part of the business. It can't be a behind closed doors, behind the big magic curtain kind of thing. It needs to be out in the open. It needs to be really transparent and people really need to understand it, embrace it. You're listening to breaking biz dev

John Tyreman 17:21

the podcast that beats up, breaks down, and redefines business development for the professional services firms of tomorrow. Your hosts are John Tyerman, founder of Red Cedar Marketing, the podcast marketing company for experts and professional services firms,

Mark Wainwright 17:35

And Mark Wainwright, principal consultant and founder of Wainwright Insight, the fractional sales manager and sales consultant to professional services firms.

John Tyreman 17:45

If you find this podcast helpful, please help us by following the show and leaving a review on Apple podcasts

Mark Wainwright 17:51

and now back to the show. the other part of this, John, we swing back. To the other end of this marketing and sales continuum. We go back to the ones I, I we've talked about this. I know that marketing and I hinted at it just a second ago about this positioning thing. I know that marketing is critical in, in, in all of this succession planning.

John Tyreman 18:15

Yeah. Um, and this is a, a major trigger moment when I was working in branding. This would be something that happens where a firm owner wants to retire. And the folks that are coming into that leadership position, they want to reevaluate the brand of the firm, right? Succession planning and leadership transition is, is a perfect time for a rebrand so I, I was able to work with a lot of firms during that kind of. That trigger moment and shepherding them through that process. Marketing, I would say is the liaison between a company and the market it serves. And so, you know, that's clients, that's prospects, teaming partners, employees. and so as change in ownership is a major event, it's a major, milestone in a firm's history. Right. So, marketing needs to, in my opinion, needs to lead that kind of that external message. For what's going on and help the, help the market kind of understand how this big change will or will not impact business moving forward.

Mark Wainwright 19:25

Right. Great, great question. It could be, I mean, there's a, there's a number of permutations and all that it could be status quo is great. There's just this change that's happening, but you know, the, we've, everybody's got their hand on the. On the rudder and we're still running forward or we've recognized the market is changing. And so we're going to change and there's, there's where we're turning left very hard. So maybe who knows? Yeah.

John Tyreman 19:50

Right. And so, marketing can, can support a change in firm ownership in a number of different ways. And this could be, you know, through succession planning, if you're selling your, your firm to your employees, or it could be, you know, your firm is being merged or, you know, another firm and there's a rebrand going on, or your firm is being bought up by a larger firm, or perhaps your firm is acquiring a smaller firm. You know, these are all different scenarios that could lead to some sort of a rebrand or some sort of an event where marketing really needs to kind of be the steward of that message. And I would say that, that a rebrand should probably happen a year, maybe two before that transaction takes place. and I say that because the rebranding process can take a long time, right? So, uh, successful rebrands in my experience always start with good research and an understanding of why you win new business in the first place. You know, what are those differentiators? Um, because if you can understand why you win new business, then you won't be as reliant on the founder to come in and do the pitch, or you're not, you're not as reliant on that founder brand. And so within that shift, you know, that's, that's where you can build up the personal brands of the experts within your firm,

Mark Wainwright 21:07

yeah, you, you mentioned this and I think this is a super interesting point.

John Tyreman 21:11

like you mentioned earlier, a lot of these firms are founded from an entrepreneurial architect or an entrepreneurial spirited engineer who goes out, they start their own practice and they build their firm that way. But what happens when you want to sell the firm and you're, and you want to sell it to your employees, you really need to democratize the expertise within your firm. And so what this does is it shields it from turnover. It shields it from being over reliant on one person, winning all the business. You can spread out that expertise,

Mark Wainwright 21:41

or you just need to turn that, that singularly focused, you know, personal brand into multiple individuals. Right. So what you spread across everybody, or you just see these new emerging, the new six, you know, people who are going to, who are going to be there, they're, um, start, start building their own brands, or maybe they already have. And maybe now they're, they're positioned well to bring sort of their personal brands sort of under the umbrella of this new organization. So, yeah, I don't think, um, personal brands have ever been as important as they are now, you know, with, with all the, all the different channels and, and all the varying points of view out there. You know, I think it's as important as, as, as anything else for. Your perspective clients to really understand how you see the world in your perspective. So that whole sort of personal branding and that point of view, uh, are, are, are critical. And yeah, when that turnover happens, it's a, it's a huge deal. Oh, the previous remote firm owner is leading or leaving the organization. They, um, they looked at things a particular way that had a particular way of doing things. I need to find out who these new people are. I need to find out if they're aligned with that, if they look at things differently and having a bunch of people who really understand the importance of a personal brand. So important. So spot on.

John Tyreman 23:06

Yeah. The risk is though, kind of to that point. Is if you have six individuals who are taking over for one, you know, they, they can operate in a, in wildly different fashions. And so another way that marketing can help steward this transition is to systematize the business development process that will lead to more predictable revenue. It will lead to a better training program and it will lead to a more organized, firm.

Mark Wainwright 23:33

Good. Good. Yeah. I, I, um, uh, they come in, they have made, they have, they all have strong personal brands. Maybe they have different points of view, but you've got something that, uh, starts to tie them together. Uh, some, some point of continuity, some, some systematizing of the brand or the system or the processes that, that keeps them from being a bunch of, you know, independent operators, a bunch of Mavericks. So good. I totally think that both marketing and sales, are Probably under sort of, when it comes to what it takes to, transition your firm to the next generation, having the sales skills, having the, both the organizational and the individual sort of marketing, acumen and the understanding of personal brands, firm brand, all that stuff. So that's, that's good. Good points. Good points. All right, John, I think we've, We've done a, done a, done a reasonable job with this whole succession planning here, underscoring the importance of all of the things that can happen across our marketing and sales continuum and how those can contribute to the success of the next, the next generation,

John Tyreman 24:47

Yeah. Hopefully we broke it all down and I like your, analogy of they're all puzzle pieces that need to fit together, So, uh, yeah, I think this was great until next time.

Mark Wainwright 24:58

until next time, John.