The past several weeks have been very interesting. I have enjoyed my status as a “free agent.” I have taken the opportunity to meet with former competitors and colleagues, potential investors and partners, and a whole host of others. While all discussions were with different people, the majority of the conversation was the same.
Of course, the best part was the fact that they all picked up the check due to my status as UNEMPLOYED!
Back to the conversation: in the financial services industry, you create job security for yourself through one of two main avenues. Either you (a) possess unique industry or product line expertise, or (b) you “control” / generate revenue through the acquisition and retention of client relationships. I have spent most of my career focused more on (b). I have the ability to attract and retain clients.
Over the past several weeks, I felt like Bill Murray in Groundhog Day as I was subjected to the same questions over and over again. (And, unfortunately, I did not get to hook up with Andie McDowell at the end!) Every professional that I met with asked many questions, but the top three were all the same:
- What do you currently earn?
- How big is your book of business? (i.e. How many clients do you have? How much revenue do they generate?)
- How many clients / how much revenue can you move from your current employer to us?
While this is not surprising at all, it is also extremely disappointing. It completely mirrors my own experience as a hiring manager at Equity Risk when I was competing for talent with other firms.
As I look for my next partner, my goal is to find one that aligns with one of the guiding principles of my life, which I have tried very hard to uphold…
“Right is always right, even if everyone else is against it.
Wrong is always wrong, even if everyone else is for it.”
— William Penn
If not 100%, then very close to 100%, of the professionals that fall under the third item above (i.e. professionals who attract/retain clients/revenue) are governed through some form of a non-compete / non-solicit agreement. I always thought there were only two answers to the question, “Do you have a non-compete?” It was either “Yes” or “No”.
Unfortunately, there is a very popular third answer – “Yes, but it is unenforceable.” Then, the person proceeds to make the case for all the loopholes in the agreement — how the clients have a right to choose who services them, how their current employer cannot prevent them from earning a living, how, per George Costanza, yada yada yada.
I recognize that many of these reasons highlight why an agreement may not, in fact, be legally enforceable. But, here is my position: the agreement is MORALLY enforceable. You signed your name to it. Does that not stand for something? The lengths that people will go to in order to rationalize why they can violate an agreement they signed will never cease to amaze me.
I use the answer to the question, “Do you have a non-compete?” as a very important standard when hiring a prospective “revenue generator.” “Yes” or “No” are completely fine and reasonable answers for me. If the person I am interviewing is the best person for the job, fits our culture, and will be value added OVER THE LONG TERM, then we can work with either answer. “Yes, but” earns the person a quick “Thanks for your time” from me for one very simple reason – what they are about to do to their current employer, they will likely do to me at some point.
As Maya Angelou famously wrote, “When someone shows you who they are, believe them the first time.”
Building a business for the long-term is hard. Avoiding the short cuts is hard. Resisting the temptation for quick results and short-term glory requires self-confidence, focus, strength, and a great board of directors who will kick you in the ass when you start to falter.
I once put three corporate logos up on a screen at one of the Equity Risk Partners’ annual meetings. They were Wells Fargo, Goldman Sachs, and Morgan Stanley. I asked my colleagues what the thread was among the logos. The answer…
Approximately 100 years ago, each one of these companies was just TWO GUYS. Client by client, office by office, hire by hire, dollar by dollar, they plugged away. No short cuts. 100 years later, they are world class, Fortune 500 businesses.
Would you like to join me on my next adventure? Then, in the words of the great country singer, George Strait – “Check Yes or No”.
Note: For those of you that do not know, in 1969, as an outfielder for the St. Louis Cardinals, Curt Flood became one of the pivotal figures in sport’s history when he refused to accept a trade, ultimately appealing his case to the U.S. Supreme Court. Although his legal challenge was unsuccessful, it began the process which ultimately led to what we now know as free agency.