Are You a Personality-Led Firm Or An Institution?

Some firms are personality driven and some are institutional.

Normally I'd prefer to wait until I have a fully-formed POV on something before writing about it, but the clarity has been elusive on this one, so I'm just going to throw this at you and hope that you'll catch it and clarify it further for yourself.

The personality driven firm often looks like this:

  • Named after the individual.
  • No partners, or the ones named are clearly junior to the others.
  • Long life. The firm matures every year as the founder ages and there is very little doubt about the firm's continuation. The founder started in his or her late 20s or early 30s.
  • But it's not likely to transfer ownership until late in the process (principal in 60s or 70s), and it won't be a significant financial transaction when it happens.
  • Founder went to an "in" school (one of the top 15 or so) and the relationship between the academic institution and this alumnus is touted by both sides.
  • Desire to work for this firm is largely driven by a "master/apprentice" type of goal, and people who then leave will often tout their stint with the master.
  • Almost always located in a major urban center, and proudly so.
  • Long client relationships, often tinged with a client concentration challenge that's driven by extreme loyalty on both sides.
  • Typically on the smallish side: 5-6 people until another significant person joins, at which time it can expand to 11-12.
  • Less likely to be a remote workplace.
  • There's a style whose gatekeeper is a single person.
  • Virtually no disciplined lead gen, but instead dependent on notoriety of single principal.
  • Outsiders think of the founder and don't know the names of any other team members.

The institutional firm often looks like this:

  • Sometimes named after an individual, but not usually, and if so, that individual is long gone or in an emeritus role.
  • Multiple partners, but it's earned slowly over time and there's no real distinction between one of these junior partners and other significant contributors.
  • Quite a bit more diversity in terms of race, socio-economic status, and educational background.
  • Strong mid-level leadership team.
  • When someone is drawn to work there, it's to learn from a system, exposure to lots of clients, and to build relationships.
  • The firm is often specialized if it hovers below 40 people but then is more of a full-service, AOR-possible firm above that.
  • Fully integrated digital services.
  • Strong statement of mission and values.
  • There's a style that's moderated by a system.
  • Strong marketing plan with two or more people keeping the wheel spinning.
  • Predictable (if slow) decision making, led by executive team where founder will listen, always, and defer to group, often.
  • Usually a strong M/A exit.
  • Outsiders know about the firm and are often unaware of founder's story.

What do they both have?

  • Big name clients.
  • Strong financial performance.

Just like every baby starts out small, every firm is birthed as a small entity. But for some, the firms are clearly an illustration of "a technician who has suffered an entrepreneurial seizure" (ala Michael Gerber), but some of you want to build a practice focused on the work...and some of you want to build a strong entity that happens be a creative or digital or advertising or PR firm. That latter qualifier is almost incidental: the founder of that second firm wanted to build an institution.

I wasn't thinking about this exactly when I wrote about the advantages of a smaller or larger firm, but there is a significant degree of overlap.

One firm isn't better than the other, but you will make different choices based on your own goals and views.

Which kind of firm are you, and is that the right choice? If it is the right choice, how are you maximizing your path forward?

And here's one final point I'd make: strong leaders of small firms have enormous freedom (to both succeed and fail, but they usually succeed). But the best leaders of insititutions know how to build consensus, guide effectively, and motivate a team. That leader has a vision and the people it attracts and spits out are drawn to the larger institution, which knows how to fold other strong leaders into the mix.

Regardless of which kind of firm you are building, I'd recommend being a leader more than a personality.

  • Secret Tradecraft of Elite Advisors

    Secret Tradecraft of Elite Advisors

    Covert Techniques For A Remarkable Practice

    Buy Now