Step by Step

So far this year, I’ve lost almost 30 pounds. I did it through a process developed by Weight Watchers. Of course, I’ve always known the way to lose weight is to eat less and exercise more. But it’s not that knowledge that got me to slim down, it was the Weight Watchers process–a simple process of weighing my food, counting my food points, going to meetings, and getting weighed each week.

The longer I’m in business, the more I realize that process is everything. In fact, it turns out that there are far more patents for processes than for products. Think about McDonald’s. They were the first to industrialize the food service industry. They did it by dividing the order-taking, cooking of food, and delivery of food into its discrete parts. Then they refined and tweaked each discrete step until they had optimized the entire process. In the end, they created one of the world’s most valuable companies.

The interesting thing is that most of McDonald’s employees are teenagers. As Michael Gerber, author of The E-Myth, says, “We can’t even get them to clean their rooms, yet McDonald’s has built a billion-dollar company around them.” So the key to the company’s success is clearly not the people, it’s the processes.

One of the primary things that keeps many financial advisors from moving to a fee-based business model is that they don’t have processes. They are not business-people; they are salespeople who are naturally persuasive and who fly by the seat of their pants.

As our industry continues to evolve, more and more clients are starting to recognize this also. It’s the process more than the product or even the individual advisor that will make the difference between failure and success. To add value for your clients, you must develop a systematic process that you and your team implement consistently. Not only is the industry moving from transactions to relationships, it’s moving from transactions to relationships based around systematic processes.

The Search for Process

A number of years ago, I decided to replace my accountant. He was slow and a bit sloppy, and I felt it was time to upgrade. I spent about six months trying to find the ideal accountant.

What I was looking for was an accountant who understood my industry and had systematic processes. I had my assistant call a number of accountants that I had identified in the Yellow Pages. We asked them to send us their marketing material, and then I interviewed a number of them. For the most part, they told me that they would give me great service, but no one had a checklist, showed me a flowchart, or said, “Here’s how we provide value in a systematic way.”

I was looking for someone that had a filing system already set up, and who would say, “Here are the files you’ll need in California; here’s a checklist of important dates relating to tax returns and other financial matters.” I was not able to find that. Eventually, I did find a competent accountant, and have encouraged him to develop and organize his processes to make his business more efficient–and, quite frankly, to make my relationship with him more valuable to me.

I recently started working with a new law firm as well. (It was time to upgrade my attorney, too.) I am building a new product for my company and needed help in the area of intellectual capital. This particular firm has developed excellent processes for this highly complicated area of law. Every one of the attorneys I have worked with, each a specialist in his or her area, employed the same processes.

My previous intellectual property attorney charged me $300 an hour. Now I pay only $190 an hour for a junior attorney. A very senior expert attorney, who charges $500 an hour, discusses any unusual issues with the junior attorney and then reviews the finished work before it is sent to me. The result for me is better advice and contracts at a reduced cost.

In a conversation with one of the attorneys recently, I questioned him about the fact that everyone seemed very professional and had organized systems and processes for getting work done. The attorney said that they are all trained in the same system and process. The firm hires people while they are in law school and trains them in a certain way of doing things. This is very different from most law firms (and financial service companies). In most firms, the individual attorney (or financial advisor) determines the process and ultimately the result. The process is not established by the firm.

One Thing at a Time

So how do you create useful processes? The first step is to define what your desirable outcomes are. Then you need to define what has to happen to achieve that outcome, and divide that into discrete steps.

Let’s say your desired outcome is to start a new client relationship. What are the steps you need to do accomplish this?

1. Identify specific prospects you want to attract.