This case study is based on the situation of a client of the Covenant Group. Names and details have been changed to preserve privacy.



What do you want your world to look like in 10 years? That is the question I posed to Roger Gallagher as we sat on the patio enjoying a cool beverage after a hot Friday afternoon on the golf course.

“You know, I’m not really sure about that,” he replied.

Roger is one of those quiet success stories. You never see him on a speaker’s platform, he hasn’t written a “how-to” book and, most unusual, he has remained with his sponsoring company since the start of his career more than 20 years ago. He has built his business to be largely self-sustaining through repeat business and referrals from existing clients. The fact that his income places him in the top 5% of the industry isn’t evident from his modest office or the six-year-old car he drives. The only luxury Roger appears to allow himself was membership in a very exclusive golf club, where we now sat.

I had posed my question to Roger after he told me how he used to feel guilty about taking an afternoon off work to play golf. Now, however, he was increasingly comfortable with the idea because he felt the business didn’t need him there all day every day in order to be successful.

Roger had come to our firm three years earlier for guidance in staff performance management and compensation. At that time, I jokingly said that, as part of our deal, Roger had to invite me to play golf at his club once a year. He honoured that commitment and we had become friends. So, it was in that spirit that I asked him the question.

“You are still a young man, Roger,” I said, “and the way you have built your practice, you could, theoretically, carry on as you have been for the next 20 years. Your business would continue to flourish and you would gradually get more and more time on the golf course. Is that what you want?”

“I like the second part of that picture, for sure,” he replied. “But I don’t know if I want to spend the rest of my working life doing the same thing in the same way. Don’t get me wrong — I love my work and my clients, and I will stay at this for as long as I can. There is no other industry in which I could be paid so well for doing so much good for people I care about. But dare I use the ‘B’ word? I think I am getting a little bored.”

“I am not really surprised, Roger,” I responded. “Feelings as you have described often come when someone has achieved a considerable measure of success. You begin to wonder, ‘What’s next?’

“You have built a business that almost runs itself. You can do what you do well with relatively little effort. The dogged determination isn’t there for you now like it was, even five to 10 years ago. And you aren’t particularly motivated to earn a lot more money — unless I don’t know you as well as I think I do.”

“No, money isn’t the motivator it used to be,” he agreed. “I am thankful for what I have and certainly don’t want to reduce my standard of living in any way. But, as I get older, other things are becoming more important.”

“I think you need a new vision, Roger — a renewed picture of what you want to be when you grow up!” I said. “That’s why I asked you to describe your world as you’d like it to be in 10 years.”

“But I don’t really know what I want,” he insisted.

“I bet you know more than you think,” I said. “Let’s test my theory. How much personal income do you want to be earning 10 years from now?”

“I always tell my clients that my objective is to have their assets grow by the rate of inflation plus 5%, as a minimum,” Roger said. “My years in the business have taught me that if I can do that for them, they will be very pleased with the results. As my greatest personal asset is my ability to earn an income, I’d be happy with the same growth. So, in today’s low-inflation world, that would be about 7% a year.”

@page_break@“Great,” I said. “Obviously, just as you adjust your clients’ expectations as the rate of inflation changes, you would adjust your own income targets. Applying the old ‘Rule of 72’, however, means that, at 7%, you would double your personal income in approximately 10 years. Would that be adequate to maintain your lifestyle as you’d like it to be over the next decade?”

“Yes, it would be more than adequate,” he said. “I don’t live a very fancy life, nor do I want for anything.”

“So, one aspect of your vision,” I said, “is to double your personal income over the next 10 years. Now, how hard do you want to be working in 10 years? You want more time for golf and other pursuits. What does that translate to in terms of ‘time on the job’?”

“In an ideal world,” he said, “I would take four to six weeks vacation every year, not work on Fridays between May and October, and put in no more than 40 hours a week the rest of the time.”

“How does that compare with today, say, as a percentage?” I asked.

“I guess it would be roughly about two-thirds,” Roger said. “I take three to four weeks vacation now, most Friday afternoons in the summer are for golf and I usually put in about 50 hours a week otherwise.”

“So,” I said, “there’s the second part of your vision — reducing your direct time spent in the business by a third.”

“Haven’t I just described competing visions?” he asked. “I want to double my income at the same time as I reduce my working hours.”

“They are not competing visions, Roger, just parallel,” I said. “In fact, having those two objectives should give you more focus because now you have to organize your practice to do both simultaneously. That leads me to two more related and very important questions. How big do you want to become and what role do you want to play?”

“By ‘how big do I want to become’ do you mean: in terms of revenue, assets under management, number of clients…?” he asked.

“All of the above, plus a couple more,” I said. “For example, to double your personal income, does the business have to double its revenue at the same time? I suspect not, because that would mean you were also doubling your costs as you grew. Knowing your structure and staffing, I am confident you could handle a 100% increase in revenue with less than a 100% increase in expenses. What do you think?”

“You’re right,” he said. “We could handle twice as much business by adding only two to three more staff, and the cost would only be a fraction of the increased revenue.”

“Slow down a bit,” I said. “When you say you could handle twice as much business with two to three more people, are you thinking you’d have twice as many clients? Is that what you want?”

“No, I’d actually like to reduce the number of clients,” Roger said. “Many are smaller accounts that have been with me a long time and have little or no potential, yet they still require service and probably cost me more in resources than they contribute.”

“So, another part of your vision,” I said, “would be to have fewer, higher-value clients. Which brings me to the next big question: what role do you want to play in the business?”

Roger had a ready answer: “I’ve always admired Frank Sinatra’s mantra: ‘I don’t move pianos; I just show up and sing.’ I’d like to be the guy who comes into a meeting in which someone on my team has set everything up for me. I apply my professional expertise as an advisor to the situation and then someone else takes care of the details.”

“So, shouldn’t that be part of your vision, too?” I asked. “By being clear about the role you want to play, you are, effectively, describing the type of organization that needs to be built to support you. The future drives the present, Roger. Do you think you could get excited about creating a renewed vision for yourself and working toward it?”

“I definitely could. And I assume you would be willing to help — for your usual fee, of course,” Roger said jokingly.

“We certainly would,” I replied, “and when we’re done, the next golf game is at my course, on me.” IE



George Hartman is a coach and facilitator with the Covenant Group in Toronto. He can be reached at george@convenantgroup.com.