From the August 2009 issue of Research Magazine • Subscribe!

Valuable Lessons

Financial advisory firms must become learning organizations.

For months now, serious troubles with the American auto industry have been front page news. This gives us reason to pause and ask, "What went wrong?" We know the industry's troubles began in the 1970s, and while there was some revival, the return to health was short-lived. If asked to name one thing that explains that industry's downfall, I'd say that the major players failed to become learning organizations. Your advisory firm is no doubt a small fraction of GM's size, but the lessons remain applicable.

All companies and businesses need to become learning organizations. They need to study themselves ruthlessly and dedicate themselves to ongoing improvement. Let's look at some ways to instill in your organization a culture of learning and improvement.

Blueprint and Review

Whether your organization consists of one person or thousands, the first step to becoming a learning organization is to carefully blueprint, or make templates of, your major business processes and activities. These include client acquisition, investment management, client communication, problem resolution, compliance, operations and all other essential or mission-critical areas. Far too many businesses don't know how or where they get their clients, whether their business is growing and so on.

Once you've finished blueprinting, it's essential to perform an after-action review each time you've made use of a template. So, after you take on a new client, perform a quarterly review, or complete any other major process, make it second nature to ask these key questions: What did we do right? What did we do wrong? What can we do better and how?

As this process of blueprinting and review becomes ingrained in your business culture, you'll regularly gather extraordinarily valuable information. You'll know, for example, where a new client came from, whether a thank you note was sent for any referral and if a welcome package was sent. If the new client did not receive the package, you'll be able to figure out why not, where the breakdown was and how to fix things going forward.

Make sure you involve your staff thoroughly in this process. Of course, a review isn't necessary every time a phone call is answered, but for major activities -- mission-critical activities as you define them -- your staff should undertake this process without your prompting. Additionally, in many cases you can leverage your financial institution partners, such as your broker-dealer, to gain baseline information about client demographics, industry association statistics, etc., which will help you make better after-action assessments and use industry benchmarks on profitably, staffing ratios and so on.

Comprehensive Training

Studies show that most people do not leave their jobs because of inadequate compensation. The No. 1 reason people leave their jobs is that they don't understand how what they do fits in or why it's important. By committing to creating a learning organization, you've already embarked down the path to addressing this difficulty, because everyone involved will become part of building and improving the organization.

Put together a specific (and ideally individualized) learning and training program for each staff member. Robust cross-training is a perfect place to focus your learning efforts. To provide exceptional customer service, you have to have more than one person available who is trained at and can perform at least the basics of every business function. If someone is out sick or there's a death in the family, there's no excuse for having key strategic areas of your organization left in a lurch.

Importantly, as you begin to blueprint individual jobs for cross-training purposes, make sure your staff doesn't get paranoid -- "Oh my gosh, are they just taking down exactly what I do so they can get rid of me?" -- by making it clear your goal isn't to replace anyone, but rather to help everyone become more efficient, effective and fulfilled.

A Learning Calendar

Once you've identified areas for training and development, put together a specific, public, 12-month learning calendar. Having a group calendar, and truly welcoming everyone's feedback, can help you avoid sending someone to a mediocre training opportunity when something better is coming down the line. You can make sure not too many people go to the same conference or kind of training, that you never have too many people out at once and that no one individual is getting too big a piece of the pie.

With proper research and advance planning, you can identify and take advantage of many excellent training opportunities for little or no money. For example, I've advocated creating a Total Client Profile for each client with mind mapping software. Well, advisors who buy mind mapping software often just hand it to a staff member who becomes a passable user but never really delves into the program's advanced capabilities. Yet companies that sell such software often do regional trainings for a nominal fee, or may offer extensive online training and tutorials. The staffer who masters the program is able to better perform his or her job, and will feel more fulfilled as well.

Staffers Becoming Teachers

But once a staff member has mastered some new software, don't stop there. Instead, have that person give a presentation to the rest of your staff about the program's deeper capabilities. Nothing motivates someone to learn something really well like the prospect of then having to present what they've learned. So every time any staff member goes for off-site training, have them do a presentation of what they've learned within five business days of their return, focusing on what was most valuable and beneficial.

Make the presentations as comfortable as possible -- they can be done sitting around a table -- but always require an individual who received specific training to report the highlights back to the group.

Another opportunity for turning staff members into teachers is in the cross-training process mentioned earlier. Specifically, such training should be implemented by the staffer whose function is involved. Instead of handing your staff a big book of what they need to learn, get them involved in teaching each other in a robust and personal manner.

The Triple Payoff

Why go through all of this? If your organization seems to be doing well enough, is it really worth all the effort that it will take to become a learning organization?

There are three major payoffs to becoming a learning organization. First, your staff will be more fulfilled, loyal, smarter and more efficient and effective. And if there's one thing that's key to the success of advisors, it's having a staff like this.

Second, you'll free up an enormous amount of your invaluable time. Time is the only resource that is forever limited, and the more time you spend in client-facing activities and business development, the more successful you'll be. I'm mystified at how often I see advisors monkeying with things they shouldn't be involved with at all, especially technology problems. Some advisors say, "Well, it would take me longer to show someone how to do this than just to do it myself." Even if that's true on a one-time basis, it isn't true for things advisors do repeatedly that should be in a staffer's domain.

Finally, and very simply, if you fail to create a learning organization, you'll be doomed to repeat the mistakes of the past. And, as with the auto industry, any reprieve you have will likely be short-lived. It's good to live and learn, but it's even better to learn to learn so you can thrive in the long run.

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Patricia J. Abram is a senior managing partner with CEG Worldwide in Florida; see www.cegwordwide.com.

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