Communicating Your Succession Plan with Customers, Clients, and Shareholders


This post is by Karen Firestone from HBR.org


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“When are you thinking of retiring?” I am used to this question by now.  It usually comes up an hour into a meeting with a client prospect for our investment company, often after a shuffling of papers and downward glances. “And what is your plan for succession at the company?”

At first, I used to be surprised. Did I look that old? I’d reply that I had no near-term plans to retire and that we had a very strong team of younger executives, including the current president, whom I had designated as my eventual CEO replacement. Then I cycled through a range of reactions: annoyance with the inquiry; concern that women are still not considered as “committed” as men, even when we’re CEO; and wanting to better understand why people felt compelled to ask me about retirement.

It turns out that I am not

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How One CEO Prepared Her Organization for Her Retirement


This post is by Karen Firestone from HBR.org


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Juj Winn/Getty Images

Last year I decided it was time to shake things up at our investment management company.  After 12 years as president and then CEO, I thought it was time to shift some of my responsibilities to my partners.

Research suggests that organizations and their boards are poorly prepared for CEO transitions. The most common transgression is procrastination, in failing to charge the next generation of managers with more responsibility. Not only are CEOs reluctant to pass on key functions that they consider essential elements of their own identity, but their boards have difficulty pushing for these necessary changes.  When the CEO does depart, companies find themselves lacking leaders who are experienced in critical aspects of the top post. This may be especially true in relatively small businesses, like mine.

I wasn’t planning on retiring for at least another five years, but I wanted to watch

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Dealing with Sexual Harassment When Your Company Is Too Small to Have HR


This post is by Karen Firestone from HBR.org


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The subject of sexual misconduct at work is dominating mainstream conversation and board room agendas. This doesn’t just mean men and women who run large global enterprises, Fortune 500 behemoths, film studios, and media platforms. The conversation is happening in small businesses as well.

In the U.S. 43% of employees work in organizations with 50 or fewer people. It would be a mistake to think that a smaller workforce means a decreased chance of sexual harassment. In fact, a few characteristics make small firms more susceptible.

For example, at a smaller firm, people may engage with each other more frequently and that proximity can make the impact of any harassment feel disproportionately large. It can be extremely disruptive if two out of twenty employees suddenly can’t work together and need to be separated. And the legal and punitive costs of sexual harassment cases can feel steeper to a firm

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Does Your Startup Have a Spending Strategy?


This post is by Karen Firestone from HBR.org


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Starting a new business involves a host of challenges, and chief among them is knowing what to spend your money on—and how much to spend. You have to consider salaries, marketing budget, office size, technology services, and on and on.

These spending choices require tradeoffs, so entrepreneurs must first develop a strategy for allocating limited resources across a wide range of available options. Too often, assumptions about the potential market and its clients can cloud our judgement about expenses. Let’s examine two cases, one a former colleague and the other a close friend.

The first is Colin. After managing a sleeve of a successful hedge fund in London for five years, and building ample savings, Colin was ready for his own shop. From past experience, he believed that attracting wealthy clients required high-end office space; so he leased space in a West End office building at a

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How Leaders Can Push Employees Without Stressing Them Out


This post is by Karen Firestone from HBR.org


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One of the most interesting findings of a recent HBR article on team chemistry is that the types of people who become leaders within organizations are about 30% less likely than their coworkers to feel stressed out. As the CEO of a small investment firm, I was surprised by the finding, but as I considered my own leadership style and intraoffice relationships, I concluded that the authors were onto something. Plus, a finding from a 20,000-person survey is probably worth paying attention to.

First, let me explain why I was skeptical. I do sometimes feel enormous pressure, generally about our firm’s investment performance. Do I really feel calmer than my colleagues? Both my husband and my second-in-command at the office would suggest, only half-jokingly, that I am miraculously unencumbered because I am so skilled at off-loading my stress onto them.

But it’s all relative, and other researchers have also found that bosses

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Think About Any Risk Like an Investor


This post is by Karen Firestone from HBR.org


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Risk is unavoidable. Whether we’re driving in fast-moving traffic, arguing with a colleague in a meeting, or investing our hard-earned money, we are engaging in risk taking. As an investor, I think about financial risk a lot, and I’ve become interested in using the tools of the investor’s trade in managing the large and small risks we face regularly. Those are:

  • Right-sizing
  • Right-timing
  • Relying on knowledge and experience
  • Maintaining skepticism about predictions and promises

Let’s see how the tenets might apply to three very different cases, each containing substantial risk.

Sara Campbell, a talented dress designer, sold the majority of her apparel as a private label supplier to national chains. When both Talbots and Laura Ashley collapsed in the financial crisis of 2008, Sara suddenly lost the vast majority of her revenues. Making matters worse, she was bound to fulfill contracts with manufacturers and suppliers despite the drop-off in client

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Why That Risky Career Move Could Be a Safer Bet than You Think


This post is by Karen Firestone from HBR.org


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Kalinda has a high-paying job at an investment company and lives outside of Boston with her fiancé. They love running in the parks near their home after work and mountain biking and skiing on the weekends. The problem is that Kalinda works such long hours that she never actually gets to enjoy these activities. She grows to hate her job, finally interviewing with a smaller company that offers her a salary that’s only 60% of her current position — but with a more reasonable work schedule and the chance of a partnership within three years that would entail a much higher expected compensation. She ultimately decides that’s just too risky, so she stays in her current job.

Phillippe is sick of renting. His realtor takes him to view some gorgeous new lofts at a converted cotton factory in Providence, Rhode Island. She points out that it’s right next to a new office

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Taking Longer to Reach the Top Has Its Benefits


This post is by Karen Firestone from HBR.org


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Most career advice today encourages us to move forward passionately, intentionally, boldly — and above all, quickly. Career coaches don’t make a lot of money from encouraging people to “get ahead slowly.” However, in terms of fulfilling our long-term goals for career success, patience can be an asset.

That’s not to say waiting is easy. It can be frustrating and anxiety-producing. Young people are often described as especially impatient to get ahead, and I have witnessed this firsthand at our company, where some of our youngest employees have been the most restless and the most intent on climbing quickly. It can be tough to convince them that progress takes time — and that taking time isn’t a bad thing.

I wanted to get a sense of how common it was for senior executives to experience a career delay. Is it something everyone experiences at some point? And how does it

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What I Didn’t Know About Becoming a CEO


This post is by Karen Firestone from HBR.org


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The company I co-founded is now ten years old. While we’re an investment firm, many of the things I’ve learned as CEO transcend any particular industry. In looking back over the years, there are some things that I expected to be tough, and they have been. But there have also been surprises.

First, I was surprised by how much selling I would personally have to do as CEO – and I was equally surprised by how much I enjoy the process.

I had very little experience as a corporate pitchwoman. That doesn’t mean I was a novice in promoting an idea; as a young analyst at Fidelity Investments, I needed to convince the managers of the large mutual funds to buy my stock ideas. That entailed delivering a successful sales pitch accompanied by a written report including some type of quantification supporting my claims. Later as a portfolio manager, I

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Why Won’t My Employees Admit They’re Going on Vacation?


This post is by Karen Firestone from HBR.org


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Andrew Nguyen/HBR STAFF

As another summer comes to a close, I find myself noticing once again that my co-workers and employees have been very reluctant to both commit to a vacation and to communicate that time off to everyone else.

As CEO, I find this frustrating — it’s a waste of time to set up a client visit or an internal meeting only to hear from one of the essential participants that he or she will be on vacation. We have asked, even pleaded, that people mark the days when they will be away, even if they are still tentative. To be fair, some of my colleagues, with a degree of self-confidence and consideration, do indicate their days off well in advance — but the practice of the stealth vacation still persists.

And yet I realize that my company is hardly an exception. Studies consistently show that Americans are vacation-phobic, leaving as

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Does Having Grandchildren Persuade Women to Retire Early?


This post is by Karen Firestone from HBR.org


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I am a grandmother. I don’t just admit it, I am proud of it. My first grandchild was born when I was fifty five, which is relatively young for American professional women, but I had four children by age 30. I also run an investment firm. You can imagine, then, how interested I might be in a study published last month called, “Retirement Timing of Women and the Role of Care Responsibilities for Grandchildren.”

Authors Lumsdaine and Vermeer analyzed longitudinal data from over 47,000 women and found that the arrival of a grandchild, holding all other factors constant, raises by 8.5% the likelihood that this woman will retire. That impact increases 1.5% with each additional grandchild. Of women 58-61 years old, the percent working full time was 43% for those with no grandchildren, 37% for grandmothers not caring for kids, and 29% for those who were

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New Hires Create More Anxiety at a Midsized Company


This post is by Karen Firestone from HBR.org


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My company keeps growing. We add clients, revenue, profit, and of course, we need to add people when some of us are too busy to handle the added workload. But I’ve noticed a pattern over the past few hires: the very people who would benefit most from additional help at first resist the idea of a new arrival. Initially, I was surprised by this phenomenon, but I’ve since recognized that it’s not an uncommon response.

Many articles have been written about why employees resist change and how to overcome that fear and defensiveness. Most refer to organizational changes such as restructuring, mergers, acquisitions, downsizing or moving locations, all of which may result in abrupt shifts in reporting lines, job responsibilities, or the physical environment. Having spent my entire (long) career since college working for only three companies, including ten years at the one I co-founded, I am an Exhibit-A creature

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