Baby Boomers and younger managers at odds in consulting firms
PSMJ, the management consultants who specialize in the construction sector, warn that consulting engineering firms ...
PSMJ, the management consultants who specialize in the construction sector, warn that consulting engineering firms who were considering selling their businesses are in a two-way bind. The economic recession is making things difficult for both the Baby Boomers who want to retire, and the younger generation who are thinking of their future.
Brad Wilson, a specialist in mergers and acquisitions at Boston-based PSMJ, writes in the company’s recent electronic newsletter: “This recession is very bad timing for ownership transition, because the Baby Boomers want out and there’s no money to let them out.”
The younger staff are concerned for their futures, and would prefer to fund an acquisition rather than see the existing partners use the company’s profits to pay themselves off.
The problem is the would-be retirees need to develop a new more flexible vision. “You can either hang on to the old plan and choke the life out of your firm, or go in a different direction and start thinking outside the box,” Wilson writes.
Wilson writes: “The younger generation is restless with the lack of aggressiveness of the older owners. There’s a lot of mixed signals – older folks are not sure if they want to be there while younger folks are shaking their head saying, ‘We’re exactly where we want to be and we can’t go any further because the old guys are getting conservative.’ What’s more, the younger generation knows that if the current owners use the profits of the firm to pay themselves off and get out, they are likely to be on the losing end when the economy turns around. The younger generation prefers to fund an acquisition and grow their profits.”
Firms have to re-evaluate their plans for the future in the light of the new economic reality, says PSMJ. Addressing the problem, they offer a new report, “The Challenges of Ownership Transition in Today’s Economy,” written by Wilson and Frank A. Stasiowski.