Succession planning, recruiting, M&A and developing top talent and pricing pressures were among several front-burner issues that came to the forefront during a roundtable discussion by members of the Advisory Board.
“Succession planning begins at the firm and is a function of leadership,” said Koltin Consulting Group CEO Allan Koltin, describing the number of firms in the profession that have no formal succession plan in place or have begun a transition process. “When you can’t find a leader, you can’t have a business.”
“The lack of succession planning is helping fuel the surge in M&A,” added Boomer Consulting CEO Gary Boomer. “There’s a whole market out there approaching the early 60s and you have to be asking, ‘What are you going to do the rest of your life?’
“Succession is an evolution,” said Advisory Board member Gary Shamis. “Unless you don’t care, you have to do something.”
The roundtable comments came from a general session at the 11th annual Winning is Everything conference here, attended by about 350 managing partners and shareholders.
In the highly competitive climate to attract and retain top talent, as well as implement mobility programs for the younger staff members, firms have to diligently develop talent in addition to just bringing them on board.
“I believe we’re getting more mobility pressure from the next generation,” said Shamis. “We were able to move it [mobility] to the back burner because of the recession, but now it’s back. We have to be incredibly creative with the next generation. If you’re not doing it, you’re irresponsible. Talent didn’t judge employers like they do today. I have people applying for positions that know more about my firm than I do. They reference articles that I did from 10 years ago.”
The board was asked if there should be a mandatory retirement age at 65.
“ When I see great talent in the mid-60s and older, it makes sense to let that talent continue on,” said Koltin. “Sometimes the talent base can go on until 80 when they are still influencers and business-getters.”
“If you don’t have a mandatory retirement age, that just promotes mediocrity,” added Boomer.
With the surge in M&A at the tail end of 2011, Koltin said that may just be the tip of the iceberg. “Businesses have lifecycles and sometimes you take them as far as you can and can’t go any further,” he said. “I think you’ll see more strategic mergers as opposed to ones that merge because of a lack of a succession plan.”
“Some of these firms are getting so large because of mergers. Are they hurting themselves in terms of differentiating themselves against the Big Four as far as pricing?” asked Shamis.
Boomer pointed out that there are also huge technology and compensation issues associated with mergers, as sometimes firms operating on several platforms have to be integrated. “One size fits one,” he said.
