The Survival of the Body and the Survival of a Business

Six Principles That Fuel Resilience

The term “Business Longevity” isn’t new, and I’m not the only one thinking about it. I recall a 2016 TED Talk by Martin Reeves on how to build a business that lasts 100 years. He and his colleagues also discussed this topic in the Harvard Business Review .

Mr. Reeves outlined six biological principles that fuel the resilience of the human immune system: redundancy, diversity, modularity, adaptation, prudence, and embeddedness. He argues that these same principles can be applied to assess and create business resilience and, by extension, business longevity. Just like the human immune system, businesses that display these characteristics are best suited for long-term survival.

Reeves' confluence of biology and business aligns with my own thinking as a CEO. I’m especially interested in the concept of embeddedness—that businesses can best thrive only when they think of themselves as interdependent with and part of the industries, communities, and ecosystems in which they exist and operate.

We can also think of embeddedness in less scientific, more philosophical terms. The master philosopher Lao Tzu once said that an “unbending tree is easily broken.”?This makes sense most obviously as an example of adaptation, not embeddedness. Yet, I believe that Lao Tzu chose a tree for his metaphor for a less obvious reason.?True, an unbending tree is easily broken, but even the most flexible tree must be firmly rooted in its surrounding soil, or it will just as easily be swept away by the very wind that otherwise would break it. Is it not the exact same for a business, which is rooted in its industry and community?

Building Professional Services Firms to Last

Can professional services firms be built to last for 100 years? Are financial advisors, business managers, lawyers, doctors, accountants, architects, consultants, and insurance agents somehow more limited in their capacity for longevity?

I view professional services organizations as progressing through a spectrum—from practices to collaboratives, businesses, and ultimately enterprises—with each stage reflecting greater endurance and business longevity:

Focus’ Approach to Enduring Success

As the CEO of Focus Financial Partners, which owns many advisory organizations, I can tell you that the idea of business longevity is core to our philosophy. Practitioners can serve clients well in all of the above operating forms, but not all of these forms enable perpetual service to clients—especially multigenerational families—as well as the kind of continuous career opportunities necessary to attract and retain top team members.

Our goal is to work with advisory firms to ensure that, whether they currently operate as practices, collaboratives, businesses, or enterprises, they do so optimally and, over time, either evolve into enterprises themselves or join forces with an enterprise so that their clients and team members are never overly reliant on any one person or small group of people. Indeed, Focus exists not only to maximize the effectiveness and impact of advisory firms but also to ensure that those firms can fully discharge their responsibilities to clients and team members for generations to come. Those responsibilities include adherence to the fiduciary standard, which applies to all RIAs; and I believe that the fiduciary standard ultimately requires advisors to pursue some form of long-term sustainability for the benefit of clients, whose interests must always come first.

This newsletter will focus on how to build lasting enterprises, sharing personal reflections, offering insights from industry conversations, and even finding inspiration from books, movies, music, and other interests. I hope you find it valuable.