If you’ve been a listener for a while, you know how I feel about strategy, and you’ve heard me mention exit strategy more than once. That said, there is no one path to the exit, and for small to midsized service industry businesses, the challenge can be significant.
This week I’m happy to welcome Bill Tunnell, Jerry Spangler and Tom Walsh from TSW, an urban planning, architecture and landscape design firm that has done some really exciting things here in Atlanta. The TSW team has been in the industry a long time, and when thinking about how and when to hand over the reins, their focus turned to developing leaders in their business. This week we focus on what worked for them, and tips for how that might transfer to success in your business.
Find the Right Dynamic
What’s unique about TSW, in addition to their award-winning planning, design, and architecture is their management style. Tunnell, Spangler, and Walsh are all partners, with none of them being a managing partner. Spangler and Tunnell went to school together, and they teamed up with Walsh in the early nineties. Tunnell says they owe their success in their uncommon leadership situation to the balance and good dynamic between the three.
Walsh points to the right team balance to make the management work. “All three of us are driven. One thing I really love about this is that we all know that each one of us is out there doing our part of the work…we are all very passionate and love our work, and I think if you have individuals like that, you’re going to do well and your firm is going to survive.”
Love What You Do
If you are still at the helm of a service business that you started, it’s likely that you do still love what you do. It’s worth mentioning, though, because it is important. As you are developing the next generation of leaders in your company, you set the tone for their leadership style and their image of the company and the clients. Your loving what you do goes beyond yourself, and has an effect on the team at large, as well as on the future of the company.
TSW has had a unique approach to their business, and it’s one that they all find exciting. Says Spangler, “When we started out it was with a belief that planning, architecture, and landscape architecture really are all part of the same piece of cloth and when we look at our competition, quite often those firms are very specialized.”
TSW practices what they call community design, which focuses less on institutional projects, and more on projects that help to create community. Coming at their business in a way that is unique and inspiring for them continues to be a factor in their success.
Know Where Your Value Lies
With service oriented businesses, much of the capital is of the human variety. For TSW, that has meant building a strong team, and looking for ways to keep that team on board as they continue to develop. Before they even started thinking about developing an exit strategy, they were looking for ways to keep key players on board. Spangler says, “We have gifted probably more stock than we should have, but we gifted stock to folks who we want to keep, as incentive to stick around. And there are some mild golden handcuffs. If you leave in one year your amount of stock decreases.”
They also focus on creating a great work environment. Says Tunnell, “Everybody in our firm contributes, and I think everybody likes the energy that we’re talking about here and it’s one of the reasons they are there, and they continue to work as part of TSW.
Have a Plan
While their initial goal was to hire and keep a strong team, eventually Tunnell, Spangler, and Walsh started to think about how to exit. Around 2001 the plan to keep great players on the team began to transform into a plan to groom leaders who would be able to take over the firm someday.
Says Tunnell, “Architecture is not as profitable a profession as some of the other ones where you think about succession plans being successful. The capital that we have as a firm is the talent we put out there, as opposed to a big bank account somewhere that we’re sitting on. So, having a plan for how you have that emerging leadership start to be recognized as the true design leaders and thought leaders in the company is a huge part of it.” He says they focus on giving team members as much responsibility as they can handle.
They also make a point of making team members aware of their future leadership roles in the company. Walsh explains, “That’s how you keep people on because they know that there is an end point to the game.”
Building the right environment, attracting the right people, and empowering those people as leaders, both within the firm and publically, is at the heart of the TSW exit plan. It’s not an easy plan to execute on the fly. They planned early, and are now reaping the benefits of the planning. Their path might be unique, but the over arching principles are universal. Where does your business value lie?