Transitions are a natural way of life. Too often we blast through them without slowing down and making sure we get the results we want. Listen as Susan Bradley, the founder of The Sudden Money Institute helps us understand that transitions are not something we should blithely go through without paying real attention.
Susan will help us understand that transitions are a time when it’s best to slow down and take stock. If you’re about to go through a major transition like start a business, leave your business or have a major change in your life realize your IQ will drop and your decision making ability won’t be as good as you might like it to be.
Here are some of the things we’ll cover in today’s podcast:
- What a transitionist is and what type of training do they get?
- What the difference is between technical and adaptive change.
- Make sure your advisors know your communication preferences.
- How to make sure that you’re at your maximum level of comfort as you go through a transition process.
- Understand that your emotional climate will change as you go through your transition.
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In the Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick. You’re at the Sustainable Business. Our guest today is an old friend of mine. We’ve been—gosh, I guess, we’ve known each other 10—almost 15 years. I’ve been working with Susan Bradley on and off. Susan is the founder and CEO of the Sudden Money Institute. She has developed a new certification called a transitionist and we’re going to talk with Susan about what a transitionist is and why you need to be aware of transitions in your company because if you’re going to have a sustainable business, at some point you’re going to leave that business and making a successful transition is about your behavior and the company’s behavior. So, let’s bring Susan in and we’ll talk about transitions and how it can be more successful for you.
Hey Susan, how are you today?
Susan: Great, Josh. Thanks for inviting me to be with you.
Josh: I’m absolutely thrilled to have you here. You know, you and I have worked for a long time together. I’ve learned a lot from you and I hope that our listeners learn a lot today.
Susan: Thank you.
Josh: Let’s start out and talk about what a transitionist is.
Susan: Well, the definition of a transitionist is one who is skilled and trained to manage change. So, a financial transitionist is one who is skilled and trained to manage financial change.
Josh: So, what kind of transitionist might that be? I mean, if someone’s going through a financial transition. Now, what does that mean?
Susan: It’s interesting. Many people can hear this through their own experience and things that we’re speaking to them. It actually has a pretty universal application. We design the work for financial advisors and attorneys to work with clients going through major life events – marriage, divorce, widowhood, sale of a business, retirement, inheritance and those sorts of things. It’s expanded over the years because the need to manage change and be skilled at doing that spreads across all kinds of disciplines, net worth and cultures. And it has a direct impact on businesses as well as the individuals who own the business or run the business. We didn’t see this broad application in the beginning but we’ve been doing this for 16 years so we had plenty of time to get wider view as we went along.
Josh: A financial transitionist is likely a financial advisor or an attorney, is that correct?
Susan: So far, that’s it, yeah. We have some financial therapists who use our process as well but, you know, it’s usually there.
Josh: Okay. Well, can we talk a little bit about what the process might be? I’ve been running my business for 30 years and I’m 55 or 60 years old. At some point in the near future, I’m probably going to have to move on. I’m not sure if I’ll sell the business to an outsider, or I’m going to sell the business to my managers, or have my children join. But what would a transitionist do with me to help me get ready for this?
Susan: Well, Josh, there’d be two levels of the work, one would be for you personally because that’s a major shift in your life – to go from owning and operating the business to not doing that or whatever you choose to do next. It’s usually a liquidity event which is the financial change part of it.
But on the other level, it’s the business itself. It’s your customers. It’s your key employees. It’s people that you may be bringing in. A lot of financial firms are transitioning to either buying or selling their financial firm, buying other firms and acquisition or selling their firm. And they’re starting to realize that there needs to be preparation in advance and a very clear process for that transition, that change. Transition, by definition, is temporary, right? It means going from one point to another point. It’s that in-between time. And a business owner will have that in-between time and the business will have it.
Harvard Business School came out with a distinction between technical change management and adaptive change management. Most of the disciplines that work with these life events, these financial change events disciplines are built on the technical change management model. And as people have found – not just at Harvard Business, but around the world, the failure rate for technical change management for big transitions – big events in a business, the failure rate is pretty high. It’s about 70% is what they keep quoting. So something different is happening when a business is getting ready to be sold or to acquire another business – personally and on the business side. So, we’ve developed an adaptive change transition model for both the individual and the business.
Josh: So, the listeners, to understand, can you give us a definition of what technical change is and what adaptive change management is, so we can sort of be in the same place?
Susan: Technical change is doing the work that you’re probably trained to do. You sit with the situation that’s somewhat familiar to you. You understand the range of solutions. You can assess the situation fairly quickly. You can choose the solution, apply the solution. And with consistency and discipline, that change happens. It’s the easy part. Technically, it might be complex but you know how to do it.
Adaptive change has no easy answers to it because it’s about the people that’s involved. It’s about the personal side as much as a business would rather it not be. It’s the way people feel about the change, about being acquired or being owned by someone else. And all of a sudden the employees are having to shift and adjust. It could be the clients. The clients have an adaptive experience as well. So in adaptive change, the principles are to get on the balcony, you can always see the big view.
It’s the actual work and the solutions come from the people involved and not from the expert. It’s a time of patience. It’s a time of learning how to help people with experience on the personal side and not just answers and hard numbers.
On the technical side, it’s a very different kind of process that most are a little uncomfortable with because it feels squishy. The technical side feels very reliable. But it turns out that the squishy side – that personal side really drives success, satisfaction and well-being. So we had to kind of create a process, a structure for what is inherently a more abstract experience. It’s been a tricky time.
Josh: So, I’m thinking about selling my business and I’m 60 years old and I’ve hired lawyers who are going to do technical stuff. They’re going to draft legal documents. And I have my accountant looking at taxes which again I am assuming is a technical thing. I may even have a wealth manager who’s looking at my investments and saying “How should I invest the money?” after I have my liquidity event, which is also a technical thing. What kind of specific steps would a transitionist take to help me with the adaptive side of the change? I know you have a really robust suite of tools. What would some of those tools be?
Susan: Well, one of the first tools is a communication tool. We believe in rather assessing someone or putting them through some kind of a psychological profiling and then naming their type. We have a process where the client – the business owner in this case, would be identifying their preferences. And preferences that we talk about are preferences for being in meetings. What makes you comfortable and productive in a meeting? Preferences for how to prepare for meeting, how to follow up after meeting, how to receive and evaluate written material, recommendations, how to make your best decisions.
They’re all great but we needed something more. We needed an individual to have some control over this and to give us their feedback.
So, the way this works in real life, this business owner will have identified their preferences. We’ll know how that works but we’d also like to work with their spouse. Generally, in a sale of a business, it’s not someone by themselves. Frequently, they have a spouse. They have children. There may be expectations or commitments that involve other people.
The success of all that goes beyond the numbers part. It’s how well do they connect and communicate. How well do they have productive conversations about “What next? What about this money? What about that money?” So you need the technical side so you know the correct numbers and possibilities. But if you can’t talk about it and you can’t really explain and be understood by other people, you fall short of that high level of well-being that’s possible. So, communication is a big deal. That’s a lead tool that we use. And then that flows into the professional’s practice management that’s put in a CRM system so that that client is addressed in that way that makes them most productive each time. And then the client learns how they’re most productive. They can communicate that to the other advisors or people in their lives so that they can have productive conversations with everyone.
Josh: Would a transitionist—would a part of their job be to make sure the other advisors on the team understand the communication preferences of the client so they can all communicate effectively?
Susan: Yeah. I’m sure people listening today have had the experience of having different advisors either giving conflicting information or having different opinions, not communicating, not giving information in a timely fashion that kind of thing. You know, when you work with transitions, almost always you’ve got to have several different professionals involved. And what we did is, we built out a protocol for a brain trust, a way to pool people into a collaborative experience with the client as the main focus.
Communication preference would be one of the first things that we would share with the people in the brain trust. There would be agreements on how maybe meetings are prepared for, scheduled, managed, et cetera so that the client was always at their highest level of comfort, productivity, the ability to think through and make good decisions. So yeah, it’s something that is shared, obviously with permission. It’s a protocol that we have of identifying who needs to be on the team and who is collaborative-ready.
Not all professions are collaborative-ready. There are a lot of people that would just like to be the alpha dog. And sometimes there’s a place for that, certainly. But if you need a real brain trust, you need people who can be collaborative.
Josh: That is my experience also. I love this. Some people are not collaborative-ready. That’s a nice way of saying—something I would say—
Susan: Well, they could be good at what they do.
Susan: But they just don’t connect outside of their sphere. And sometimes that’s fine. That works for a client. But when you’re in transition, usually, there’s a different emotional climate. There’s a lot of information swirling around. There are a lot of decisions that are going to be made only once in life. There’s a sense of “I’ve got to get this ready. I’ve got to get this right and I’ve got to do it by a certain time.” So you really need the highest level of brain trust. And to me, that’s not just coordinating, giving information in a timely fashion, it’s really collaborative. The client is the unifying point. We all serve that client’s needs so we really have to understand that client.
Josh: This is a situation where we’re trying to get to 1 + 1 = 3 or 5 or 10, not just 2.
Josh: And that can happen through good collaboration.
You’ve mentioned something which I would like to spend a few minutes talking about anyhow which is, including the spouse in the conversation of a major transition. Can you give us some information on why that’s important?
Susan: Yeah. I mean, most married couples are busy people, particularly if there is a business, a family business. They are not just nine-to-fiver’s. The business usually becomes part of the family culture. And you’re moving pretty quickly. And as long as your hair’s not on fire and the kids are all alive, life’s okay. You just kind of keep moving, you keep getting things done. Now, all of a sudden, you’re going to hit a time when everything’s shifting. Your normal patterns will shift. The routines of the day will shift. And it’s an adjustment. It’s an adaptive period. So, to bring the spouse in, prior to that happening and to manage some expectations, and to really think through some of the consequences, I don’t mean negative. All the different things that could be happening, for spouses to be able to have comfortable money conversations is a huge, huge step forward in making this next phase in life all that you want it to be.
Most spouses have what we call socialized behavior with each other. They may have differences but they haven’t really had to confront the differences. They’ve learned to accommodate each other, ignore certain things and everything’s okay. When you have events like this, you go to hardwired behavior, so the differences are stronger and the need to understand and accommodate the differences all of a sudden come up. And most couples aren’t ready for that.
Josh: So what we’re trying to do when we work with couples, which is you also have tools for this I know, is that we’re helping the couples understand – make that change from what the normal is today to what the new normal will be after the transition happens?
Susan: Yeah. One of those is actually a protocol. It’s simply called managing expectations. And it’s a way of giving each person the ability to really think through what they do expect. What is it? When? Why? Why is that important? If there is a number, put a number to it. And people do it separately. And then we meet and we blend. And many times, they’re on a very similar page but the differences could erupt into trouble if you didn’t see them coming. Sometimes they’re on completely different pages. But most of the time, they’re pretty close. And you can take these two opposites and start to create a shared purpose, a shared goal. It’s much more comforting. There’s a lot more optimism to it and you don’t have those collision points that you might have gotten to otherwise.
So it’s things like that. It’s being able to look forward. Even things like giving and sharing. Once there’s a liquidity event, frequently there’s a tendency to make gifts in the family, outside the family, all different levels of gifts, all different kinds of gifts. And spouses can have very different ideas and begin to make commitments, implied or maybe not, hard commitments, but to get on the same page with their giving and sharing intention. It’s a big thing.
Josh: So, Susan, one of your trainees, licensees, CEFT people has coined the term I love which she calls preage. And essentially, what preage is is we’re going to do this planning before the event.
Susan: Yeah. It’s a take off on the word triage. We want to avoid triage.
Josh: Yeah. And we’re doing triage before we need to do triage which is we’re saying, “Okay, the event’s going to happen.” And, you know, sometimes in a death in the family, you don’t have time to do that. But in a business sale, we certainly have time to do that – or a business transition because they typically take several years to do well. So, I’m assuming that you think that working with a tansitionist before the event – maybe even a couple of years before the event, would really help prepare the business owner to go through this process in a way that’s more economically and psychologically satisfying.
Susan: Yes. We call it anticipation stage, Josh. There are four stages of transition – anticipating the event, the actual event, the ending stage, a passage stage of adaptation, and then the emergence to a new normal when status quo just feels that’s the normal of your life.
So, in the anticipation stage, there’s a lot of work that can be done. People have a tendency to say, “I’ll wait until the event happens.” And by the time the event happens, you generally have a buildup of anticipation, of expectations, of commitments, of maybe some fears as well as some out of bounds kind of expectations beyond the money capability is what I mean there. There can be a lot of cross currents going on.
What we do is we start to work on communication. We work on the goals. We work on the opportunities that people see their expectations. We might even work on a family policy on how the family will shift and change. It’s very productive work. We go where we need to go to prepare people to really be ready. I think also, Josh, it helps with—I know you have a term perma-five?
Susan: In other words, people always say “Yes, I’m going to sell my business. When? In five years.” And five years from then, they say the same thing. I think part of that perma-five is not really knowing what you want. How are you going to reinvent yourself? What is the next story or the next chapter going to look like? And to get some more form and structure for that, people are more eager to move into. They have an idea of how the numbers need to work. And it brings us up to a much higher level of capability.
It also is a stress technique. It’s like a stress inoculation technique to do anticipation stage planning because we know that stress can be debilitating. It can diminish capacity, executive functioning, but it doesn’t have to. A financial transitionist is trained in helping people use the stress because the change is stressful. But stress can be used to motivate and not debilitate. And it can be used to enhance capability and not diminish. And a lot of that mindset reset and the shifting of using stress in a positive way happens in anticipation stage.
Josh: Well, Susan, unfortunately we are out of time. And I know that there’s a bunch of listeners here who are advisors to private businesses. And I also know that a bunch of these advisors would do really well to go through your unbelievably great training program. I can tell you from personal experience that it’s made a huge difference in the way I work with my clients and one that’s provided a lot of high quality work, especially in that perma-five stage or anticipation stage that I have. So, if folks want to get in touch with you, how would they go about doing so?
Susan: Oh, I have such a simple website name. I’m sure people will remember suddenmoney.com. And there you can get information about our training or you can shoot me an e-mail from there. I’d be happy to talk with people.
We do have a 12-month training program for our designation. We do that mostly virtually. Actually, we do it in four continents, so we do it all over the world. So you also get to meet some amazing, other advisors. And it’s always great when strong people are with their peers. So you can contact me through the suddenmoney website. The phone number is there as well as the e-mail.
Josh: Yeah, I can say from personal experience is it added tons of value to me.
Susan, I thank you so much for the work that you’re doing and thanks so much for your time today. I really appreciate it.
Susan: Thank you, Josh. It’s been a pleasure.
Narrator: You’ve been listening to The Sustainable Business Podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at firstname.lastname@example.org.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.