Lead and Learn

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.