Fujiwara Mahito understood that for every family-controlled business, there comes a time when the founder must hand the keys to the next generation. That’s why Mahito’s inn, the Nishiyama Onsen Keiunkan in Japan, is still operating today, more than 1,300 years after he established it.
And that’s why I am starting the process of transitioning Palisades Hudson to the next generation, even though I hope to keep working for years to come.
This month, I will preside over the first meeting of Palisades Hudson Financial Group’s new management board. Its members include my adult daughters Jessica and Alison Elkin, who have their own careers outside the business; my wife, Linda Field Elkin, who has been the firm’s marketing and human resource director since 1995; our managing vice president, Shomari Hearn, who will mark his 20th anniversary with the company in 2018; and myself.
I was not thinking in terms of millennia when I left Arthur Andersen to start my own accounting and financial planning business 25 years ago. But I was mindful of the admonition in Stephen Covey’s then-recently published “7 Habits of Highly Effective People” to “begin with the end in mind.” (That’s Habit No. 2.)
I wanted to create an enterprise that could thrive without my involvement, because while a business can go on practically forever, a founder cannot. Many lawyers, accountants and others who hang out their metaphorical shingles just keep themselves busy until the day they land face down in their corn flakes. They may hire staff, but neglect to prepare a successor to run the operation after they are gone. Clients and employees alike can be left high and dry, and the founder’s heirs may collect little or no residual value after a lifetime of effort.
My daughters were small children when I started my business. There was no way to know whether they would ultimately have either the skills or the desire to keep it going after my departure. I never cared to push them to follow in my professional footsteps; I wanted them to pursue their own passions, which they did. So I focused on attracting, developing and retaining the most talented staff I could find. As the years passed, I delegated most of the day-to-day client service while I concentrated on growing and running the company.
Shomari is the dean of that staff today and is already well prepared to take the helm if something happens to me. In case of my early demise, Linda, who has been by my side from the beginning, would provide the continuity of our family’s ownership, while Shomari and the other professionals would handle the daily work of providing the firm’s services and developing the next generation of staff. In the meantime, through their seats on the management board, our daughters will have a chance to learn how Palisades Hudson works and how to maintain its overall direction as I gradually (I hope) withdraw from its operation. If they are to ultimately take ownership, they should learn to be stewards of our company’s culture and principles. The management board is designed to do that.
If things go according to plan, I will stay involved in the business for another 15 years or so. If circumstances change, so will the plan. Whatever happens, I expect Palisades Hudson to continue meeting the needs of the clients and employees whose loyalty have made our first 25 years so successful.
I can’t promise a 1,300-year run, but every multigeneration business has to start someplace. I expect Fujiwara Mahito understood that, too.