Immediately after a merger or the formation of a new ensemble, everyone assumes that whatever tensions might have built up during the process will soon resolve themselves. More revenue. More scale. More power. Surely, these benefits will offset any lingering friction.
But they don’t.
We’re often engaged by firms to help partners resolve these conflicts, and the most common underlying issue probably isn’t what you would normally expect. It’s not a matter of one partner being lazy while the other’s ambitious. It’s not that one partner is deeply committed while the other’s more complacent. What’s typically at issue is that they’re in fact pursuing two very different models of growth.
Frequently, we see one partner who’s grown up in a typical ‘eat-what-you-kill’ world. Their identity, their ego, and their performance metrics all revolve around production. New clients. New assets. This week. This month. This year. Meetings that don’t directly drive production are at best viewed as a distraction and at worst a threat.
The other is a partner who sees an opportunity to build something bigger than themself. A firm, rather than a loose collection of high achievers. Someone who is thinking about intangibles like leadership, capacity, systems, governance, and value creation. In short, a person who thinks about growth beyond their own capabilities.
While both of these models may have merit (depending on what you hope to collectively achieve as owners), troubles arise when the partners aren’t aligned as to which vision of growth approach they plan to take to achieve their agreed-upon goals.
It’s a recipe that’s quietly destroyed more than a few partnerships.
Common signs of misalignment
Perhaps your firm decides (explicitly or implicitly) that everyone must produce. Everyone must bring in new clients and actively grow the ensemble’s AUM. In principle, it sounds perfectly logical. Everyone will do their fair share and no one will get a free ride.
What you’ve actually created, however, is a producer-only organization model.
If everyone must produce in the same way, you’re actually placing the highest demands on the people with the least capacity and the largest relationships. Inevitably, they become a bottleneck. It also creates a hard ceiling to growth. No matter how good any one producer is, the capabilities and capacity of the organization required to support growth must take center stage when scaling an ensemble. If there’s only a focus on production and revenue per professional, without a corresponding investment of time and money in infrastructure, major foundational fractures will result in:
Stalled growth
Increased tension
Underlying resentment between the partners who are ’doing the work and those who are supporting the business
It’s important to not lose sight of the fact that building the kind of team which can efficiently and effectively support the demands of a growing client roster is every bit as critical as growing the client roster itself. Failure to do so will likely lead to high team turnover which is soon followed by client turnover. Brand reputation suffers, and ultimately profits will fail to grow.
This is where a mindset shift is required.
Of course, you absolutely need rainmakers and other producers. Production is what fuels the firm. But you do NOT need everyone to produce in the same way, to the same extent, or for the same reason. The fastest way to grow isn’t to force everyone to sell more, it’s to institutionalize production by creating a system in which demand creation, client experience, relationships, and expertise are appropriately distributed across a team by recognizing that specialists, leaders, and builders produce differently – but no less effectively. When team members are all pulling in the same direction:
Production becomes more, not less, reliable
Lead generation accelerates
The client experience is enhanced
Overall organizational risk is reduced
Capacity and capability both increase
But going together requires leadership and time. And it’s often the place where tensions can become personal.
For production-focused partners, leadership time may be viewed as unproductive. If it doesn’t appear in the next commission run and doesn’t close a new client relationship this week, then it’s an activity without any immediate payoff. For the visionary/builder, on the other hand, production demands can feel frustratingly short-sighted – as though they’re being forced to focus on meeting this year’s number rather than building a long-term sustainable enterprise.
Although finding a middle ground may not be ideal for either partner in this equation, it’s an imperative for continued success.
For the producer, it means realizing that leadership is not an expense; it’s an investment
For the builder, it means recognizing that production matters, and that strategy without revenue growth isn’t sustainable
It’s not a question of whether one aspect is more important than the other. Rather, it’s a matter of realizing how both are critical parts of the whole, and deciding how decisions regarding what to prioritize and when will be made. Where teams tend to go astray is in avoiding the conversation and failing to create working agreements that effectively sync with strategy.
Often, partners fail to deal openly with the uncomfortable questions of how each partner should be valued and compensated based upon their contributions to the future growth plan of the firm. Instead they opt to ‘take a pass,’ kicking the can down the road. Over time, this leads to simmering tension that is eventually bound to boil over.
Governance generally becomes the weapon of choice;
The conversation changes from “how do we grow” to “who has control”;
The partnership legal agreements come under scrutiny;
The decision-making processes are called into question; and
Exit strategies are carefully reviewed.
What partners fail to realize until it’s too late is the sobering reality that dissolving an ensemble or removing a partner is far more expensive (financially, emotionally and culturally) than having this conversation up front.
So here’s the takeaway.
If you are a partner group, and this conversation is proving to be an issue for your team, the good news is you do NOT have to agree on everything. But the bad news is you DO need clarity.
Clarity on the kind of firm you are building. Clarity on the definition of contribution. Clarity on the decisions that require full alignment among the partners. Clarity on what happens if all the partners are unable to align. Clarity around the value of what each partner brings to the table and an acknowledgement that “what got you here won’t get you there.” The diversity of skills required to build a thriving enterprise can be worlds apart from the production skills needed to be a top producer.
Simply avoiding these questions won’t bring harmony – it will bring conflict and increased cost.
And the firms that successfully navigate this phase are almost always the ones that do one thing exceptionally well. They appreciate the difference between contributions, while achieving alignment on outcomes. They quit asking the question, “Who brought the most to the table this year?” and start asking the question, “What have we created together that will make the next few years better, easier, stronger, and more repeatable?”
That is true leadership, and the necessary price of traveling the road ahead together.
Advisor Questions From This Article
What kind of firm are you actually striving to build over the next three years?
What is your mutually agreed upon vision of growth over the next three years? (e.g., rate of growth, direction of growth, methods of growth)
What outcomes are more important to you than individual production totals as the firm scales?
How do you define and value contribution beyond personal revenue generation?
Who will make decisions as to when the firm needs to invest time and resources in the business of leadership, talent, or infrastructure?
What happens if the partners cannot agree on the firm’s direction?
How will you increase the value to clients as you grow your roster and assets?
Partnership conflicts often arise because partners are pursuing two very different models of growth. One partner may be focused on production — new clients and new assets — while another is focused on building something bigger than themselves through leadership, capacity, systems, governance, and value creation. Troubles arise when partners are not aligned on which growth approach they plan to take to achieve their agreed-upon goals.
The tension typically exists between a production-focused model and an enterprise-building model. One partner may operate in an “eat-what-you-kill” world where identity and performance revolve around production. The other may be thinking about intangibles such as leadership, systems, governance, capacity, and long-term value creation. Both models may have merit, but conflict occurs when there is no clarity about which model will drive the firm’s growth.
A producer-only organization model is created when everyone is expected to produce in the same way and actively grow the firm’s assets under management. While this may sound logical, it places the highest demands on the people with the least capacity and the largest relationships, creating bottlenecks and a hard ceiling to growth.
When there is a focus only on production and revenue per professional without a corresponding investment in infrastructure, foundational fractures occur. This often results in stalled growth, increased tension, or underlying resentment between partners. Over time, team turnover may follow, which can lead to client turnover, brand damage, and profits that fail to grow.
No. Production is what fuels the firm, but not everyone needs to produce in the same way, to the same extent, or for the same reason. Growth accelerates when production is institutionalized through a system in which demand creation, client experience, relationships, and expertise are appropriately distributed across the team.
For production-focused partners, leadership time may be viewed as unproductive if it does not immediately result in revenue. For builder-oriented partners, production demands can feel short-sighted if they interfere with building a sustainable enterprise. This difference in perspective often creates personal tension if not addressed openly.
When partners avoid uncomfortable conversations about contribution, compensation, and future growth plans, tension simmers beneath the surface. Governance becomes a weapon, control becomes the focus, legal agreements are scrutinized, decision-making is questioned, and exit strategies are reviewed. Dissolving a partnership is far more expensive than addressing alignment upfront.
Firms that successfully navigate this phase appreciate the difference between contributions while achieving alignment on outcomes. They stop asking who brought the most to the table in a given year and instead ask what they have created together that will make the next few years better, easier, stronger, and more repeatable.