A business can own very few physical assets and still carry a great deal of concentration risk. Sometimes that risk has a name, an office and the strongest relationships with the customers.
My earlier essay on rainmakers considered how a people-dependent firm can become fragile when an influential colleague leaves, particularly where its culture discourages the next generation of talent. For IJK, this raises a practical investment question: what capability stays with the business after an important person moves on?
The answer matters when assessing a company, supporting its growth or preparing for a change of ownership. Revenue tells us what the organisation has earned. It does not, on its own, tell us how well the organisation can continue earning it.
Separate the introduction from the institution
A rainmaker may open a door that nobody else could open. That deserves recognition. The work that follows should give the customer reasons to trust a wider team.
Consider a hypothetical advisory business whose largest customers speak only to its founder. The firm may have strong reported sales, but it would be useful to ask who handles the work, who understands each account and whom the customer would call during the founder’s absence.
A relationship can begin with one person and develop into confidence in an organisation. The point is to understand how far that development has progressed, rather than assume that a customer list belongs economically to the company simply because it appears in a database.
Test the second line in practice
An organisation chart can make succession look complete. A named deputy is less convincing if that person has never led an important customer meeting or made a difficult decision.
I would want to understand who can take responsibility for pricing, delivery and account leadership during an extended absence. Have they had opportunities to do so? Do colleagues recognise their authority? Can the business operate without every exception returning to the same desk?
This is a practical test of management depth. It should include the quiet specialists who keep delivery dependable, as well as the people credited with winning the work.
Read the incentives, then watch the behaviour
A firm may say that collaboration matters while rewarding only individual revenue. It should not be surprising if colleagues become protective of their accounts or reluctant to share capable people.
In an investment review, I would look at whether recognition and rewards also support mentoring, introductions and developing future leaders. I would listen to people at different levels, rather than rely entirely on the explanation given by the highest biller.
The aim is to make success repeatable. A strong performer should be able to build a team, take on new opportunities and see others develop without interpreting their progress as a threat.
Growth exposes the dependencies
Cross-border expansion is a useful test. A well-connected local partner may create an opening in a new market. Continuing to serve that market requires delivery capability, local management and shared knowledge of the customer.
If every decision and introduction still depends on the original connector, a new office may add revenue without adding much organisational depth. I would want to understand who is learning alongside that person and what the business is building beyond access.
The same question arises after an acquisition. A new owner needs a realistic view of how relationships, knowledge and authority will continue through the transition. An attractive purchase price cannot compensate for a business one has misunderstood.
Use technology to support continuity
Good records can make it easier for a colleague to understand previous discussions, commitments and decisions. Sensible access controls help the right people find that information. Tools that prepare summaries or routine work may free up time for mentoring and customer contact.
But recording a relationship is different from earning trust. Technology can support a handover; it cannot manufacture the customer’s confidence in the person taking over. That still requires time, exposure and good work.
Invest in what can endure
For IJK, the investment angle is the durability of the organisation behind the revenue. Understanding that means looking closely at leadership, incentives, customer relationships and the ability to develop people.
A firm built around a star can be a very good business. I would be more confident in its future if the star’s success were also building the capability of others.
The most useful question is what remains when that person is away. A trusted team, capable successors and customers who value the wider organisation are assets worth building.
Adapted for IJK Capital Partners from When the rainmaker walks out on Kenny Ng’s personal blog.