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How Advisors Can Help CEOs Get Unstuck


We wrote previously about Role Identity Fusion, in which an entrepreneur’s identity as a business owner impinges on their self-identity in their social (non-business owner) roles.

RIF can be great while running a business: highly fused owners demonstrate demonstrate extreme pro-group behavior and will go to tremendous lengths to achieve organizational goals.

However, this extreme comes with a dark side.  RIF can cause owners to act contrary to both their own and their firm’s best interests.  Very highly fused people are unable to separate their self-identity from their role as owner. They may find it difficult or impossible to create meaning apart from their role as owner. The result is a series of personal and organizational blind spots such as: failure to build a strong management team, denial of personal or organizational challenges, and/or avoidance of essential organizational changes.

How should advisors anticipate and solve the challenges that come with working with an owner with RIF?

First, RIF is a measurable behavior.

Most owners experience RIF somewhere along the continuum from very highly fused to no fusion. The challenge for advisors is figuring out the degree of an owner’s RIF — sooner rather than later.  In terms of deal flow, identifying an owner’s level of RIF as early as possible can mean the difference between making a wise investment of the advisor’s time and resources or throwing good resources after bad.

We recommend this assessment take place in what Bo Burlingham, author of “Finish Big: How Entrepreneurs Exit Their Companies on Top” refers to as the exploratory phase.

Bo conceptualizes exit as a 4-stage process: exploratory, strategic, execution, and transition.

Most advisors’ work is focused on the strategic or execution phases because that is where their skill set and economic incentive is appropriately focused.  But Burlingham’s work, 30-years of entrepreneurial research, and our own research concur: owners that engage in a robust exploratory process are more likely to exit successfully. It is no coincidence that this first phase asks the critical existential questions owners have to answer to overcome RIF.

Advisors should encourage owners to answer questions like:

  • Who am I if not the owner of my business?
  • What will I do with my time when golf isn’t enough?
  • Who will I matter to on Monday morning?
  • What is my value in the world?

Developing a sense of self apart from their role as owner provides the opportunity to attenuate negative aspects of RIF and enhance post exit resilience that will make the strategic and execution phases much more likely to succeed. Advisors that invest time early in their deal flow to get an objective assessment of their owners are able to not only design a technical strategy for the transaction, but they are able to design a strategy that considers the psychological challenges owners will face throughout their exit journey.

Three tips for advisors:

  1. Trust your intuition. If you suspect the owner might not be able to exit, consider testing your assumptions by engaging in an exploratory conversation about life beyond their business.  If the owner is low or moderately fused and does not have a clear plan it is likely they need to take a step back before they can go forward. If you are willing to do this it increases the possibility of a successful outcome. The best bet for an advisor when they encounter a highly or very highly fused client or potential client is to wait for a trigger event and have a good emergency response plan.
  2. Harness the power of the Exploratory Phase. Consider incorporating components of the Exploratory Phase into your business development process. By providing opportunities for owners to consider existential questions of the exploratory phase, advisors will begin to attract owners that are more likely to be inclined to exit successfully.
  3. Don’t rush the journey. Exit is a profoundly emotional journey.  Absent one of the so called, “5 Ds” (death, divorce, disability, departure, and disagreement), owners with RIF have to do the difficult work of identity rebuilding before they can exit.

For more information, our white paper “The Psychology of Exits” can be downloaded here.

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