Building a Personal Firm...or an Institution

There are several models for running a firm, and before noting two of them, I want to make clear that one isn't better or more advanced than the other—just different. So the idea is for you, as the principal or leader, to understand the models and their pros & cons, and then work toward that specific goal. You should also communicate your preferences clearly so that the new team member isn't surprised.

#1: Person-Driven w/ Helpers...or A-Team

In this model, you have a noted practitioner, whether a designer, marketer, brand expert, developer, or whatever. This person is forced into growth because the marketplace rewards their talent, and from there it's easy to "let yourself grow" because it's flattering. What happens instead is that you hire for what you can afford and not for what you will ultimately need, and so you end up putting out a lot of fires, and training a stream of people who wander through the revolving doors. Worse yet, you hire people to get things off your plate, but their work is below your standards, and so you insist on seeing everything and now you're the biggest bottleneck ever. Working long hours, a bit frustrated, and wondering where the money is. But all that is only if you don't manage the growth. Instead, think like this: "Yeah, if I didn't work so hard at it, we'd be a lot bigger than we are now. The marketplace thinks we should be bigger, but we like it just like this. We are closer to the work and we only have an A-Team." You can live a reasonable life and make unreasonable amounts of money if you do this right and don't let the marketplace decide for you. The marketplace is great at telling you what they need and what they will pay for it, but they are flat terrible at telling you how to run your life because of what they want from your business.

#2: Founder of an Institution w/ a Leadership Team

In this model, you've planned to build a firm from the very start. Rather than thinking of yourself as "capable" first and "entrepreneur" second, like in the first model, you have no intention of doing the work for long. Instead, you want to build, track, measure, plan, guide, and twenty other things. This is where Michael Gerber's phrase "working on the business instead of in it" came from (by the way, he keynoted our very first MYOB. Join us in mid-Oct for other great speakers!). The first firm can come to a standstill while you are away, but this firm will hardly notice your absence. You aren't the primary contact for any client and when you run into one of them by chance and they ask the status of something, you shrug your shoulders and say you'll have someone get back in touch. You are not a purist when it comes to the firm's work, like the first person above. You have standards and there's a certain public vibe for the firm, but in the end the clients are paying, and as long as they are paying a lot, who cares. This firm is obviously far more likely to get sold, and that's good, too, because it's easier to get bored, especially if the upward trajectory stalls.

What This Means

Like I said at the outset, one isn't better than the other, but one of them certainly fits you better than the other. There's very little difference in the money and the hours, if you do things right. You're far more likely to sell the latter, but you'll probably need to more often, too. What it really comes down to is one primary thing: leadership style. Do you like to make decisions on your own, or do you prefer to make them in consultation with others? The team sees, this, too, and they know how "capped" their career might be. If you're planting a church, you're doing all the work, making all the decisions, and living with the results. But if the church takes off, you'll build layers and boards and committees to govern things and stay on mission. You'll be a leader, a culture builder, and a facilitator of other peoples' careers. Either way you decide, be really intentional and build something that'll make you happy. If you've let something be built that you aren't happy with, fix it.

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