What We Learned Scoring Our Own Firm on the Transferable Value Index

Transferable value is the part of a company's worth that stays with the business when an owner steps away. We built the Transferable Value Index to help owners measure it: twelve questions, about four minutes, and a score that shows where a business depends on the people at the top. It seemed only fair to take it ourselves. The results were useful, and a little uncomfortable.

What the Score Showed Us

When our partners took the Index and looked closely at how new clients come to the firm, the answer was plain. New business was concentrated in too few people.

On the Index, a top score on that question describes a firm where new business arrives through a system that runs on its own, independent of any one person. We were well short of that. Like many of the owners we work with, we had grown on the strength of a small number of relationships and reputations. That had served the firm well for years, and it was also exactly the kind of dependence we help clients reduce.

We know what that dependence means in a client's business. If the people who bring in new work step back, the pipeline steps back with them, and a buyer or successor has to price that risk. For a firm like ours, it also shapes how leadership develops, because carrying client relationships is part of how a partner grows into running the firm. Seeing our own score made the point in a way no client example could.

Scores also varied among our own partners, which taught us something on its own. The founder saw a more transferable firm than some of the partners did. Each of us was answering from our own seat. That is one reason we ask every owner of a business to take the Index before we interpret any single score, and why the gaps between owners often tell us more than the totals.

A Realistic First Goal

The temptation after a score like that is to aim straight for the top. We decided against it.

Our goal was to move from a two to a three on new business first. For us, a three means every partner is regularly in conversation with existing clients and with people who already know the firm, instead of a few people carrying those relationships. Once that is routine, the work shifts to what it would take to reach a four.

That sequence is the same one we recommend to clients, and it is part of why the right time to start planning is years ahead of any transition. A step you can reach and keep builds more value than a leap you cannot sustain. We also made the goal visible. Conversations with existing clients and with people who already know us are now a standing topic in our weekly leadership meeting, where partners share what they are hearing and which conversations are coming next. The first issue of the Index, on the order in which owners let go, found that owners hand off operations, client relationships, and even sales before they let go of deciding what the business does next. Our own score pointed somewhere else: new business was still sitting with too few people, a step most owners in the Index had already taken.

Balancing Long-Term Awareness With Near-Term Results

To build a more systematic approach to new business, we organized our marketing around three groups. The first is people who do not know us yet. The second is people who have some awareness of us, from someone who has read an article to someone who went through a proposal and decided not to move forward. The third is our clients.

We started by putting most of our attention on the first group, building awareness of who we are and what we do. That work matters for the long term, but its results take months or even years to show up. As a firm with its own annual plan to meet, we learned that awareness alone is an unsatisfying place to put all of the effort.

Owners building transferable value in their own companies face the same trade-off, and putting off the near-term work has a real cost when no succession plan is in place.

The Cheapest High-Impact Move

A simple grid puts cost on one axis and impact on the other. One of our partners realized one morning what sits in the low-cost, high-impact corner for almost any business: picking up the phone and calling people who already know you and have not heard from you in a while.

He made two of those calls that day, to clients he had not spoken with in some time. He did not bring up our services. In both conversations the client raised a challenge they were working through, and both asked to keep talking.

Another partner had a similar experience with an existing client he had been reaching out to on and off for months. When the timing finally lined up, about 75 percent of the meeting was catching up on life and business, and the last 25 percent was about the challenges the client was facing. A second meeting went on the calendar before they hung up.

When every partner makes these calls as a habit, the relationships spread across the firm and new business depends less on any one person.

A Consistent Start for Every Client

Scoring ourselves also pushed us to standardize how clients begin working with us. We had always been thorough, and thoroughness has been one of our values from the start. What we lacked was consistency: each partner brought clients in their own way beyond the basic discovery work.

We now start client relationships with a structured review of the business, the owner's goals, the range of value, and the realistic paths forward. Every client gets the same thorough beginning, and the recommendations that follow rest on the same foundation. The consistency also makes it easier to bring new advisors into the firm, because the work no longer depends on how one partner prefers to do it.

It has changed how we design performance equity plans too, and it gives leadership development ahead of succession a clearer starting point. Designing a plan without a clear picture of the owner's path used to mean answering hard questions in the middle of plan design. Doing the review first lets us tie awards and payment events to where the owner is headed.

When Clients See It Too

The value of that structure showed up quickly with clients. One prospective client, a firm with two partners, was frustrated to be asked to take the Index before we met. Both partners took it anyway. Their scores landed within two or three points of each other, which reassured them that they saw the business the same way and gave them a shared starting point for a harder conversation.

The next question was harder. The two partners were twelve years apart in age, and they had never talked about who would step away first or when. They wanted an incentive plan for their key people. Once they saw that plan could be paired with each partner's timetable, so the business stayed transferable whichever partner stepped away first, the pieces came together. One of them asked whether the arrangement could stay evergreen, kept current as the business moved toward whatever transition came first.

Habits Over Motivation

The last change was internal. We now hold a weekly leadership meeting on a set day and time, with an agenda, a timekeeper, a scorecard, and goals we track together. The meeting keeps us out of rabbit holes, lets us vote on which issues matter most, and ends with a named person responsible for each one. We check progress against the scorecard before we take up new issues, so each meeting starts from where we stand today.

Owners who use EOS or a similar operating system will recognize the structure. What makes it work is repetition. We fall to our habits, and the weekly routine is what carries the work forward long after the motivation of a planning session fades.

What Owners Can Borrow

If you want to try what we did, start small:

• Take the Index yourself, and ask your partners and senior leaders to take it too. Compare the answers.
• Pick one question to move by one point. Make the goal specific enough that you will know when you have reached it.
• Call three people who already know you. Do not pitch. Ask how things are going.
• Put a standing meeting on the calendar with an agenda and a scorecard, and protect it.

When you are ready to turn your own results into a written plan, a succession planning checklist is a practical next step.

We talked about all of this on an episode of our podcast, What Transfers.