“Everyone knew that if you were in the Leonard family, you were going to travel the world,” Scott Leonard, founder and CEO of boutique financial advisory firm Navigoe, tells us from his office in Los Angeles.
Last month, Leonard returned from three years abroad with his wife Mandi and their three sons — Griffin, Jake, and Luke — having traveled the Caribbean and South Pacific in his 50-foot-long catamaran sailboat, Three Little Birds.
While he was away, Leonard continued to manage his company, which he founded in 1996, remotely from the sailboat. Amazingly, it didn’t fall apart. Instead, by allowing his second-in-command to step up and flying back each quarter to meet with clients face to face, the business grew its customer base and revenues while he traveled the world.
Leonard is quick to point out that this was not some extravagant midlife crisis, but rather the culmination of years of planning with his family, employees, and clients.
He grew up sailing, and he and his wife took sailing lessons together when they were dating. They decided back in 2001 that they would take a few years away from work to travel the world. And after they had their first son, Griffin, they knew they’d need to take this trip before he began high school and started to become more independent.
To help him buy the boat, which is like a floating home with four roomy sleeping cabins and amenities like a washer and dryer, Leonard sold his house in Southern California, along with all of his furniture and most of his sons’ toys.
He also started to prepare his company for the trip, making sure that each of the four employees he hired for his small wealth-management service not only knew about the plan but embraced the opportunity to rise to the occasion.
Convincing his 100 or so clients that this was a good idea was much harder, especially since he broke the news to them in the midst of the recession. “To say that it caused a great deal of anxiety for our clients would be an understatement,” he writes in his book, “The Liberated CEO,” which explains his remote-management strategies in detail.
He got around this by giving each of his clients an ultimatum: They could switch to another firm, which he believed would be difficult and disruptive, or they could stay with Navigoe. And if at any moment they felt that the quality of service dropped, he would give them a full refund for this period and help them find a new wealth manager. During the trip, he also flew to Los Angeles once each quarter for 10 days to meet with clients.
Not only did he retain all of his clients — he gained more of them and grew the company. When he set sail from Fort Lauderdale in 2011, he says, he had 110 clients, four employees, and about $US1.5 million in annual revenue. Today, the business has 125 clients, six employees, and is on track to bring in $US2 million in revenue this year.
“Some of those clients who threatened to leave actually referred more clients to us,” Leonard says, because they were impressed by the way he was able to run the company remotely. And by scheduling quarterly meetings, he ended up interacting with clients in person more regularly than he ever had before.
Most important, says Leonard, is that his second-in-command, Eric Toya, emerged as an exceptional leader.
Leonard hired Toya in 2006 and eventually determined that he could train Toya to take care of daily operations in the office while he was gone, which would include managing his coworkers, running meetings, interacting with clients, and closing deals.
Before he left, Leonard says he was too wrapped up in his own ego and thought he was the only one who could sign a contract with a new client. He realised, however, that “if a business is really relying on a CEO, there’s a lot of risk there,” should something happen to the leader.
He learned to trust that his employees were well trained and talented enough to handle responsibilities without needing him to approve every big decision. It’s one of the fundamental traits of “the liberated CEO,” as he calls it in his book.
He points to Apple’s transition to Tim Cook as CEO after Steve Jobs died, saying that while the company took time to adapt, there was a foundation in place that allowed it to continue to thrive. Leonard believes that entrepreneurs and small and medium-sized business owners need to learn to make themselves expendable as well. Sure, the founder of a company is responsible for developing its culture and vision, but its success should not be tied to the founder themselves, Leonard says.
While Leonard was abroad, he spent only about 10% of his time aboard the boat, exploring new island locales with his family most of the time. He worked about 20 hours a week with a flexible schedule.
He made sure that employees understood that he was in a different time zone, and asked that they give him a day or so to respond to emails, which he accessed through the satellite connection he had onboard the Three Little Birds.
Before he set sail, Leonard also spent several months away from the office preparing the boat, which he says helped his employees get used to the idea of their boss being less available before it became even more difficult to reach him.
His trip may have been a fantastic getaway, but he prioritised his day around clients, no matter what.
“Sometimes I had to wake up at 4:00 a.m. in the South Pacific for a call,” he says.
As time passed and he saw Toya and his other employees improve beyond his expectations in his absence, Leonard began to think of a sabbatical program that would function as a way to foster leadership.
He tells us that the main reason surveys have shown most American employees don’t use all their vacation days is that they’re afraid of their work piling up. In the same way Toya picked up some of his daily responsibilities, he believes experienced employees should be allowed to take an 8-to-12 week paid sabbatical while their coworkers absorb their work.
Leonard is already developing such a system at Navigoe. Employees who have been with the company for five years or more can take this extended break, as long as they have an actual vacation planned (no long “staycations” allowed) and are reachable within a day or two. He plans to work out a rotation so that a single employee does not regularly spend too much time away from the office.
Leonard believes that CEOs at companies of all sizes should implement their own sabbatical system, which could boost productivity, since it pushes employees in the office to become more responsible and rejuvenates the employee who is away. His own version of a sabbatical certainly worked for him.
“The entrepreneur in me has been totally reborn,” Leonard says, adding that he plans to quadruple his business within the next 10 years.