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Practice Management > Building Your Business

Lead and Learn

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Last February, I had the honor of speaking at the NAPFA Advanced Planners conference, sitting on a panel about developing career tracks for employees of financial planning firms. During the question and answer portion that followed, one practice owner asked me about employees themselves showing leadership, seemingly inferring that their responsibilities in the matter were intentionally being left out. The question went something like this; “During your discussion, you never once mentioned the responsibility young planners have in leading their own careers and paving those paths within the firms that employ them.”

This is not the first time I have been asked this question. In the past year, I’ve received heaps of e-mails from next-generation employees looking for advice and wanting to hear about the skills needed to be a “leader” of career track implementation for the firms that employed them. In fact, many of these entry-level planners have contacted me expressing excitement about being asked by their boss to lead in the creation of these paths and seeking direction on how best to go about doing it.

Initially, this seemed like a great idea–next-generation planners being charged with creating career paths, not only for themselves but for other employees in the firm. Inclusion by their bosses in this vital process means progress, right? After all, young planners have been “complaining” about their lack of meaningful opportunities and career advancement for years. So why not let them do something about it? From an owner’s perspective, this could be a great way to open the door for talented, business-minded, young professionals and allow them to showcase their management skills.

Unfortunately, it’s not that simple. I have counseled numerous owners who have been down this road, and studied the results in other firms as well. Responding to requests for career track development, owners inadvertently believe the best way to grow their firms and provide employees with upward career mobility is to delegate the creative responsibility to those who requested the tracks in the first place. Unfortunately, more often than not they ended up with business structures they didn’t like and never wanted in the first place–unhealthy firm cultures, staffing issues (turnover, morale, productivity, motivational), and extremely disappointed employees who often left the company as a result.

The sad truth is that the owners and the employees both wanted the same thing–long-term viable success for themselves and the firm. Owners wanted to grow their firms and provide growth opportunities to their next-generation employees. Their employees were thrilled about having been given these management duties and more control over the future of their careers.

So where did these well-intentioned plans go wrong? The root of the problem emerged at the point of delegation. These young planners are well trained in the technical aspects of financial planning. However, they do not yet possess a fully developed palette of managerial skills. These skills need to be nurtured through mentoring and training provided by the firm, in addition to self-motivated learning by the young planners from their own experiences. Asking young planners to develop career tracks without these honed management skills is like requiring a student to take the final exam on the first day of class. They are being unintentionally set up for failure, no matter how much effort they exert. As a result, the business suffers the same fate.

I’ve determined that many business owners have struggled with the meaning of leadership. Even the word seems subjective, and in fact that’s is as it should be. It’s your business. You’re the leader, creating the company that you ultimately envision, and your employees are, by nature of the relationship, followers of your lead.

Leadership’s Building Blocks

So when deciding to implement a career track or to improve the one you have, it’s your job to ultimately determine what that path is and then find the time and the courage to lead your employees down it. You’ll benefit from following the three building blocks of leadership as you design and deliver a successful career track in your firm.

1. Know your destination. Much of what you read about the process of leadership would tell you that the first step is “integrity.” As it applies to building a career track in your firm, it really means “honesty,” i.e., to yourself. Leadership must always be secured in a foundation of mutual trust, openness, sound decision-making, and credibility. Before you can lead a group of people down a path, you need to know what path you are taking in your business. Do you want to grow this company? Why? Either you know that you want to grow your firm and you need a career track, or your employees are asking for it. Before you make any promises about developing one, you need to first tell your employees your business strategy. To do that, you need to know yourself.

2. Ask for advice from your employees. I have yet to meet a financial planner who wasn’t relationship oriented. For the most part, planners care about the welfare of people, including employees. Before you sit down to design a career track for your firm, ask your employees to put together a list of items that they feel are important to them in the process. Remember, they’re not creating the track for themselves, but are simply expressing to you what they think should be included in it. I find this step the hardest for planners to complete. Many owners think that asking for their employees’ advice means admitting that they “don’t know.” In fact, it does just the opposite. Understanding the expectations of your employees is the first step in managing those expectations. Good leadership includes admitting that you don’t know all the answers.

3. Focus on results. The common misconception in this industry about career tracks is that you can design and implement one with ease. Successful career tracks are hard to develop, which is probably why the industry as a whole hasn’t done so and one of the reasons why employees can become disillusioned when asked to create one. What’s effective today may not be effective five years from now, due to changes in the career landscape or growth and change in your firm. However, rarely does the reason why you are implementing a career track change. Career tracks should be viewed as working documents that create a basis for growth and progress over time in your firm. It’s your job to design something today, but don’t get caught up in it being perfect right away. It will change as you, your employees, and your company evolve over time. As the leader of your company, the first step is communicating the result you want to achieve and letting your employees know that you are both committed to and capable of taking them along with you on that path.

Expecting young planners to take sole responsibility for creating career tracks at this point in their development may create excitement now, but undoubtedly “lead” to disappointment in the future. Employee-created career tracks are simply short-term Band-Aids for a serious issue that needs a long-term solution. The role of the young planner in this process is to provide meaningful input within the context of the entire business, while developing and understanding the skills needed to be a successful manager and leader in the future. How you proceed will give insight about where the firm is going and make them powerful allies on helping you get there.

Angela Herbers is a virtual business manager and consultant for independent financial planning firms. She can be reached at [email protected].


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