Focus On... Episode 4: The Business of Business Longevity

To explore this topic, I spoke with Sukanya Kuruganti, Head of Partnerships at Focus Financial Partners. Sukanya has been with Focus since 2015 and has played an important role in helping our partner firms achieve their goals. Her expertise spans mergers and acquisitions (M&A), organic growth best practices, practice management, and delivering business and client solutions to Focus-affiliated advisors.

She offered thoughtful insights on what it takes to make the leap from a small, founder-led practice to a thriving, enduring enterprise. Read the key takeaways from our discussion below.

Four Stages of Growth

Few professional service firms make it to the level of an enterprise—a sustainable, enduring organization that ultimately transcends its key personnel. In the financial advisory space, only about 100 firms are in contention to become enterprises, typically those managing more than $5 billion in assets. The vast majority—some 15,000—remain smaller operations that may not be well positioned to endure beyond their founders or other key personnel.

Of course, not every firm aspires to become an enterprise, and that’s perfectly fine. Clients can and do receive great service from practices, collaboratives, or terminal businesses. Yet, for those aiming to build something more lasting, it's important to understand the stages of growth that lead from a solo practice to an enterprise. In our discussion, I outlined four key stages of business growth:

1. Practice: A single practitioner, sometimes operating with the support of a team
2. Collaborative: Multiple practitioners sharing resources but mostly operating independently
3. Business: A unified group, aligned by mission, vision, and values
4. Enterprise: A sustainable, enduring organization that, while always reliant on its people in a general way, also transcends its people and is set up for long-term success

Sukanya agreed with this progression, stressing the vision, resilience, and risk appetite needed to advance through each stage. “The evolution from a practice to an enterprise happens over numerous decades, but not everyone gets there,” she noted. “It take[s] a different kind of vision and commitment to put together a team to go after the big, hairy goal of becoming an enterprise.”[1]

The Path to Enterprise

Given the challenges and formidable obstacles that must be overcome to evolve from a practice to an enterprise, what separates firms that succeed? Sukanya identified four key factors:

1. Vision: Firms need leaders with the ambition and long-term aspirations to create something lasting.

2. Talent: Building an enterprise means building a team. Firms must attract, retain, and nurture talent that complements their existing capabilities. Creating a strong culture where people feel valued and supported is crucial.

3. Platform: Scaling a business demands operational excellence. Standardizing processes ensures consistency and enhances the client experience, especially during times of mergers and acquisitions. With the right platform, Sukanya noted, “the advisor and client experience can be protected and significantly enhanced over time.”

4. Succession Planning: Though often avoided, succession planning is essential for ensuring the sustainability of an organization. All enterprises must plan for leadership transitions to maintain long-term success.

These considerations require a mindset that embraces bold thinking and the confidence to step outside your comfort zone—an approach that explains why so few practices successfully evolve into enterprises.

Transcending the Individual to Pursue Enterprise

One of the biggest hurdles for many founders is learning to trust others. To scale, leaders must delegate and build a team capable of driving growth, relinquishing a significant amount of control. As we’ve seen with countless founders, this can be a difficult shift.

Sukanya pointed out the psychological barriers that hold many founders back: “As human beings … there is a part of you which is always afraid of becoming less relevant or eventually retiring. It can be a very scary thought. But, in order to build a real enterprise, the business has to continue beyond an individual.” This fear of letting go and sharing responsibility is at the core of a challenge we explored through the “stag hunt” analogy—a concept that highlights the tension between individual safety and the rewards of collaboration.

In game theory, Rousseau’s stag hunt illustrates the inherent conflict between safety and cooperation. Sukanya connected this concept to our industry, highlighting the tension founders face between short-term gains and long-term success: “In my mind, hunting the stag is really the big, hairy, audacious goal of building an enterprise, right? Do we have the right team who trusts each other to complement each other and has that big vision to actually build something greater together?”

Supporting Enterprise Aspirations

At Focus, we partner closely with firms to help them achieve long-term growth and, if they think best, build sustainable enterprises. Sukanya emphasized the importance of defining a distinctive value proposition and fostering a growth-driven culture. “We spend a lot of time with our different practices to really figure out [their vision]” and to create a call to arms that unites their teams, she shared. “What is your vision? What does success look like?”

Sukanya shared some of Focus’ initiatives to support partner firms, including:

• Developing organic growth strategies by working closely with advisors
• Sharing practice management focused on revenue growth, productivity, and succession planning
• Recruiting top talent through M&A and strategic hires, while retaining talent through career development and a path to ownership
• Sharing access to Focus-developed client solutions, including alternative investments, estate and trust planning, risk and insurance, tax planning and preparation, family office capabilities, and more

She elaborated on these points, noting the competing demands of short-term gains and long-term success: “Building an enterprise is about having the right team who trusts and complements each other, with a shared vision to build [a legacy business] together.”

Building a Purpose-Driven Organization

In my experience, the most important ingredient to building a sustainable enterprise is to do so in concert with the entire team. This means that every team member must understand their role in achieving the company’s broader mission and vision and is fully aligned with the company’s “why.”

A team’s strength must transcend individual recognition. While individual contributions are of course valuable, they must support the collective goal. As I like to say, it’s "super-teams before superstars."

An enterprise is not defined as much by the presence of key individuals but by the strength of the team as a whole. If the departure of any individual does not meaningfully disrupt the organization’s overall long-term success, that is a sign of a true enterprise. The team is the mortar that binds the bricks of individual contributions.

Ultimately, becoming an enterprise isn’t easy. It requires a desire to do so, and it requires stepping out of your comfort zone, trusting others, and thinking long-term. But for those who make the leap, the reward is a legacy that lasts far beyond themselves.

Watch the full episode of Focus On to learn more about what it takes to build an enterprise.

[1] Disclaimer: The quotes in this blog have been edited for clarification and brevity. Any alterations made do not change the intended meaning of the original statements.