Managing staff at an advisory firm isn’t easy. It’s not like solving a financial problem: You’re dealing with people, not hard numbers. Yet advisors who want to grow their businesses must confront staff management issues.
With the independent advisor channel growing, entrepreneurs are riding a wave of success allowing many advisory firms to grow rapidly. But maybe clients are complaining about your service. Perhaps you have a staff position you can’t keep filled. Or you need a salesperson to make cold calls. How can you better manage staffers and figure out their greatest weaknesses and strengths? One answer: psychological testing.
After spending a few weeks researching testing and giving my staff a battery of exams, I am convinced that this method could play an important role in helping an advisory firm manage people better. Psychological assessments can give you insight into what makes people tick. They can help you understand what’s missing from your team, and why employees spend time infighting instead of creating.
When I write about portfolio management software, I try the applications or ask advisors who use the programs to tour them with me. Researching this story was no different. Here are some tests I reviewed.
Hoffman Vocational Values Assessment. My first experiment was with a test of job satisfaction and morale assessment written by Professor Edward Hoffman (see sidebar). The 25-question test is based on the work of Abraham Maslow, the leader of the humanistic school of psychology, and took about five minutes for 20 of my staff of 25 to take. It asks question such as, “How much do you feel bored and stagnant in your current work/job?” and “How much do you feel well accepted and liked in your current work/job?”
I looked at the individual results when my staff filled in their answers and felt pretty good overall about the results. But it did not give me much useful information until Hoffman reviewed the results and told me what they meant. That’s when the value of the test became much clearer. Hoffman told me that my staff looked to their jobs for fulfillment and that work was an important part of their lives, which he said was pretty normal for business in New York. The good news was that we were above average in a number of key areas: “belongingness” and social interaction, feeling challenged and creatively charged, and feeling respected and appreciated. We were also above average in self-actualization, with 19 of the 20 staffers saying that from time to time they had an experience of great fulfillment.
But one issue worried me: Producing marketing materials did not make my staff feel like they’re making the world a better place. Hoffman’s recommendation: Find a charitable activity we can all work on together. So that’s what we’re doing. I called a meeting and explained the results of the assessment to the staff and asked that we come up with a charitable activity we can all do together. The reaction was truly moving. One employee came to me privately and we both fought off tears and hugged, and we tried to plan what we can all do. My first experiment with testing was a success. The HVVA can be found at www.performanceprograms.com/. It costs $19.95 per employee, but group rates are available. Hoffman interprets the results for companies with fewer than 10 employees for $95, those with 11 to 39 employees for $199, and those with 40 or more employees for $299.
Myers-Briggs Type Indicator. This is the most widely used employee test in the world, not because it is so much better than other methods, but because it’s the oldest and most studied. The MBTI is based on Carl Jung’s landmark 1921 book, Psychological Types.
MBTI asks questions that rate four pairs of personality traits: your natural predisposition toward extroversion versus introversion; sensing versus being intuitive; thinking versus feeling; and judging versus perceiving. After taking the test, you get a score based on which traits are most dominant, with each trait represented by a single letter. For instance, I’m an extrovert (e), intuitive (n), thinking (t), and judging (j). All together, then, I am an “entj.”
“If you look at sales, the typical position means that the person orients energy outwards into new clients, and you might call that networking and marketing yourself,” says David Wood, president of TypeFocus Internet in British Columbia, “so a person who is going to be asked in his job requirement to make cold calls or to network within a social situation will find it easier and do a better job if that matches his natural preferences.”
That does not mean an introvert cannot do a sales job. With some sales jobs, an introvert would be more appropriate because the job may require great technical knowledge or perseverance and follow-up, traits an introvert might be better at. But in looking for a salesperson, many firms prefer extroverts because it is easier for them to break the ice with people they don’t know.
Being intuitive rather than sensing means you prefer to go beyond your senses and focus on the meaning of information. An accountant, for example, is often sensing and takes things at face value. Wood says that if you say the following numbers: 12312312, an intuitive would react by saying, “I bet the next number is three.” A sensing person would take it at face value. “Sensing people tend to live in the moment while intuitives live in the future,” says Wood.
Thinkers make decisions based on principles and reason, while a feeling type is less likely to do things based on logic. A thinker might pick the color of her car because it shows less dirt, while a feeler would pick the color just because she likes it. Judges prefer decisiveness, planning and punctuality–they like rules, while perceivers prefer flexibility and spontaneity.
So how does knowing your MBTI score help you? In many cases, it mostly tells you things about yourself and others that you already know, but it makes it easier to understand yourself and others. For instance, since I am an entj, I am organized, logical, and creative. However, I’m not strong at doing repetitive menial tasks. If I hire an assistant, I would need someone who is strong at administrative work.
Wood’s company offers career assessments used by 100,000 individuals and 5,000 government employees in Canada. Next fall, he plans to launch human resources assessment tools for small businesses. In the meantime, his company offers a free assessment, a shortened version of MBTI, at www.typefocus.com. I asked three of my staffers to take this assessment. They found the free automated report generated by the site interesting but did not know how to apply what they learned from it. Wood says that a manager could interpret MBTI scores of employees by reading one or two books about personality types, such as Work It Out: Clues For Solving People Problems At Work, by Sandra Krebs Hirsh (Consulting Psychologist Press, 1996), or Type Talk At Work, by Otto Kroeger (Dell, 2002).
“When you cut through everything, when you know personality types, you have a model and theory of difference that you constructively use,” says Wood. “You can understand better the people you work with and work in synergy. Each of the opposite preferences are complimentary.”
Kolbe Indexes. Perhaps the best-known assessment tools used by financial advisors are Kolbe Indexes. Dan Sullivan, whose Strategic Coach program has been well received for years by many successful advisors, uses Kolbe Indexes, and that has helped give Kolbe a good reputation among advisors.
Founded by Kathy Kolbe, Kolbe Corporation offers a group of Web-based assessments. The flagship is the Kolbe A Index, which measures the “conative” aspect of the mind. The mind is believed to have three distinct parts–the cognitive and thinking, the affective emotional, and the conative action-oriented. IQ tests measure your cognitive mind, personality tests measure the emotional part, and Kolbe A measures how you take action and go about doing things. While Kolbe has no formal education in psychology–her undergraduate degree is in journalism–her work has been acknowledged by academia.