In this series, we’re looking at three ways that Exit Planning speaks to the human element of how Exit Planning Advisors work with their business-owning clients. These three aspects can be the difference between an advisory practice that treads water and an advisory practice that thrives.
- Owner-Centricity: Working With Owners, Not For Them
- Collaboration: Giving Business Owners Control
- Empathy: Collaboration Through Understanding
This week, we’ll tie everything together by discussing the importance of empathy, and how Exit Planning Advisors use it to tie their owner-centric, collaborative process together.
Why Empathize When You Can Strategize?
Practice really hearing what people say. Do your best to get inside of their minds. –Marcus Aurelius
Successful business owners focus heavily on strategy. They often want to know the best ways to get things done: whether that’s how to grow their companies, how to train their successors, or how to overcome challenges preventing their companies from doing what they want. Given how strategy drives owners’ success, why should empathy matter?
In the digital world, solutions are relatively easy to come by. Business owners with limitless ambition and lots of free time can quickly find the right people to address problems related to their Exit Plans. Essentially, strategy is a mouse click away, if business owners have the time and patience to find it.
What’s harder to find is an advisor who can understand and appreciate their problems, goals, and fears. No Exit Planning Advisor can create a strategy for an owner’s exit without knowing what matters to that owner. The ability to discover what matters is what sets Exit Planning Advisors apart. Practicing empathy in Exit Planning is not only necessary for owner-centric, collaborative strategizing but also a distinct competitive advantage.
This does not mean Exit Planning Advisors need a PhD in psychology to empathize with business owners. There are several, easy-to-implement steps that Exit Planning Advisors take to empathize with owners before they strategize.
Ask the Right Questions
Throughout this series, our refrain has been to ask the right questions. Generally, this means asking open-ended questions that probe at what owners care about. But what does that look like?
Consider a situation with a 65-year-old business owner, Glen. Glen has successfully run a 45-person shipping company for the last 33 years. Glen is a terse man who wants solutions to his problems as quickly and sterilely as possible. He sits down for a consultation with an Exit Planning Advisor, Michael.
“I don’t have much time to spend here, so I’ll be brief. I want to be out of this business within the next five years,” Glen begins. “My financial guy says I need to get $6 million after taxes to do that. My business guy says I can sell it for $6.5 million after taxes, and here’s the paperwork to show it. What do I do next?”
Michael responds, “What are your goals?”
Glen shakes his head and rolls his eyes. “I just told you. My goal, singular, is to be out of my business in five years. My company is worth enough to do that. Are you going to help me or not?”
“I want to help,” Michael says, “but I need more information. There are a few things we should consider. Do you have any family that will be affected by your exit?”
Glen throws his hands in the air. “Oh, forget it. I’ll just do this myself.” He leaves the meeting early, leaving Michael dumbfounded.
In this scenario, Michael failed to ask the right questions. Glen opened the meeting by stating a goal outright (exit within five years). Trying to put the conversation into his own terms, Michael disregarded that fact and began a rote line of questioning, even though Glen told him he didn’t have much time for him. Because Michael wanted to frame the conversation in his terms, not Glen’s, he failed to empathize with Glen’s situation, and Glen walked out.
Let’s look at how Michael could have probed Glen’s goals on Glen’s terms.
After explaining his situation, Glen asks Michael what he should do next regarding his business exit.
“What does an ideal life after you leave your business look like?” Michael asks.
“An ideal life?” Glen repeated. “Ideally, I won’t have to work anymore and can get all the money the business guy said I could get.”
“Have you thought about the kind of buyer who can get you that money?”
“A little. Another company said they’d buy the business, but . . .” Glen trailed off.
In this scenario, Michael asked a question that both caught Glen off guard and made him think about what he wanted after he exited. This got Glen talking, which answered Michael’s original question and gave him more information than he expected.
Listen to and Appreciate What Owners Say
When owners start to talk, Exit Planning Advisors know not to interrupt. When faced with challenging questions about their exits, owners sometimes need to think. Giving them time to gather their thoughts is crucial to truly listening and is a key to showing empathy. Let’s continue our story to see how Michael did it.
Michael sat quietly, giving Glen time to think.
“. . .but they said they’d probably only keep my three managers onboard after I left. They don’t need my equipment or any of my admin people or my drivers. They basically just want my clients and the managers I trained. It’s sad. No loyalty for the real workers.”
“It sounds like loyalty to your workers is important to you,” Michael said.
“Well, my two sons drive for me, and my niece does all our marketing stuff. They’re all out of work if I sell to this company. I want my money, but I want to have Thanksgiving dinner with them, too. Putting them out of work doesn’t really help that.”
“I admire that,” Michael said. “You want to do what’s right for you, but not at the expense of your family and workers, right?”
“Yeah,” Glen nodded. “See, you get it.”
In asking questions, Michael built off what Glen had told him. He confirmed that loyalty to his workers was important to Glen, and in doing so, allowed Glen to explain his situation even further, unprovoked. After Glen shared his circumstances and feelings with Michael, Michael empathized with Glen’s situation while again confirming that he understood what Glen was thinking. He did his best to get inside Glen’s mind, which helped him build trust with Glen.
Avoid Just Waiting for Your Turn to Talk
At this point, it might seem like Michael should begin telling Glen how he can help. He’s just made a connection with Glen and built trust. He knows that family and employees are important to Glen, and thinks that an inside transfer might be a good Exit Path. But at this critical moment, Michael resists the temptation to launch into a description of how he can help. Instead, he encourages Glen to tell him more.
“Glen, it doesn’t sound like you’re interested in selling to this company. It’s obvious that your family and employees are important to you. Have you considered transferring the business to them?”
“Oh no, no, no,” Glen says. “I care about them and all, but none of them can really run the company. My managers, maybe. But I floated that by them, and they’d rather work for someone, not own the thing. I get where you’re coming from, but no. I was hoping maybe you could help me find some other, bigger companies to basically buy me out without firing everyone.”
By giving Glen more time to talk instead of launching into his sales pitch, Michael learned that Glen wasn’t at all interested in an insider transfer. This helped Michael understand that Glen didn’t want to harm his family and employees during his exit, but he also didn’t want to foist ownership upon them. Even though Michael’s soft Exit Path suggestion was rejected, Glen appreciated that Michael had used what he told him to present an idea, rather than trying to pitch him something he didn’t want.
Michael empathized with Glen throughout the consultation, giving Glen room to talk, vent, and hear his own ideas out loud. At no point did he make demands for information or point out inconsistencies in Glen’s wants and needs. He probed, listened, and didn’t launch into his pitch once he thought he had an idea. He let Glen lead the discussion, and, in the end, learned exactly what Glen expected from a successful exit.
BEI has tools and training to help advisors best empathize with business owners. BEI also teaches advisors how to implement owner-centric, collaborative processes into the work they do with business owners. As owners become more empowered to find advisors who collaborate with them on their business exits, advisors need to know how to best speak to their needs. BEI helps advisors speak to empowered owners in terms they want and expect.