In any business, effective leadership is critical for a firm's success. As the financial advisory market evolves, leaders in the advisor space need to be visionary and adaptable. The prevalence of small businesses in the industry, however, requires a different approach to the traditional leadership model.
Although there are exceptions to the rule, as some firms have sophisticated business models, many small ones lack structure.
With the shifting market, strong leadership is critical for navigating the changes within the industry. No matter what size the business may be, an effective leader can guide the firm toward success, profitability and higher employee morale.
Click through the following slides for 10 Characteristics for Effective Leadership in the industry.
1. Leadership requires effort. Being in a leadership role does not necessarily make someone a leader. Leadership is earned. Where management may control and direct people, leadership requires motivation and coaching. Leaders must have a clear understanding of the goals for the future of the firm, but also know how the agency can achieve them. They also must develop plans and budgets that follow a relatable sales process, creating a roadmap for their firm for guidance. At the same time, however, the leadership role is not autonomous. Good leaders need to seek the skills, knowledge, effort and resources needed to accomplish the agency’s goals.
2. Leadership requires followers. Leadership cannot be an assumed role; rather, it is earned through proper selection of key positions in the firm. The traits that make an employee successful in one role may not be the same that would lead them to thrive in another. Strong leaders need to know how to choose the best personnel for their agency, orchestrating the mission and the process. If there is a level of mutual respect between employees and the leadership, they will trust the leader’s decisions. The opposite, however, is also true.
3. Leadership is being a maestro. Understanding how employees’ unique traits contribute to the work environment and job description are important for leaders to coach and motivate their employees. Employees need to fit within the framework of cooperation between leadership and team members. As a maestro, the leader needs to learn and understand individual employees’ unique skills and work habits to encourage productivity, effectively manage conflicts and foster growth and improvement among employees.
4. Leadership demands accountability. Leaders must create benchmarks for employee performance, instilling employees with satisfaction and company loyalty. At the same time, setting annual goals and objectives help employees constantly provide feedback, which creates an environment of accountability for all employees and develops a strong, collaborative environment.
5. Leadership creates culture. Leaders focus on total enterprise value. Strong leaders must strive to create an environment where all employees strive to leave the client or prospect in a better place than where they were found. Establishing a positive client experience, in turn, leads to a unique and memorable contact with the agency. Agencies benefit from the subsequent loyalty, long-term relationships with customers, cross-sales opportunities, referrals and increased income and equity for the agency.
6. Leadership requires honesty and humility. Openly displaying honesty and integrity when communicating with any member of the team is always important, but especially in leadership roles when your employees — and even friends, neighbors and community members — are watching you. Leaders must always be open and honest with their team members on all occasions.
7. Leadership means you. Employees, family, friends and the community continually watch you, making it imperative for leaders to develop strong standards that touch every facet of their lives. The direction, culture, reputation, work ethic and professionalism of the agency begin with the leader’s behavior, and the accomplishments of the business begin with a leader’s personal actions, whether they are at the office or at home. Leaders understand that their actions drive the reputation of their company.
8. Leadership requires conditioning and endurance. Being in a leadership role should not be a burden. It is a privilege. Although being a leader comes with an incredible amount of responsibility, effective leaders understand that they set the pace for the rest of the firm. In order to expect strong earnings, productivity, long work hours and company loyalty, strong leaders lead by example. Being mindful of the work ethic that you promote to your team, as they often mirror the acts of the leader, can impact the way that they treat clients and prospects, but also other team members.
9. Leadership is power. Leadership is more than sheer force. It is influential, and leaders must persuade people to act toward their goals.
10. Leadership is vital for satisfied employees. Hay Group reports that there are 75 key components to employee satisfaction, and the most important is communicating three areas to the team: understanding the overall business strategy, helping employees understand how they can contribute and sharing information about progress. For the success of the company and team satisfaction, trust and confidence in leadership is key.
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