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The Right, and Wrong, Ways to Handle Change at Your Advisory Firm

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One of the recurring challenges that independent advisors face is dealing with the process of change, and dealing with employees who don’t deal well with change.  I have worked with many advisors and many employees through the seasons of change, and have seen what works, and what doesn’t.

Because advisory firms are small businesses, change is unavoidable. The owners typically want to become larger firms: more clients, more employees, higher revenues, increased owners’ income. But while growth is the goal at many firms, many firm owners don’t recognize that growth comes with a cost: the price of growth is change—and it’s important that you know that some of your employees aren’t going to be happy with that change.

When firms grow, many business owners assume that everyone will embrace the changes that come with it. After all, why wouldn’t they? More clients mean higher revenues, that usually lead to higher compensation, bigger jobs, nicer offices, better benefits—the list can go on and on.  

It’s true that most professional employees (I’m thinking junior advisors here), do want all these things as much as the owner. What owners often don’t realize, however, is that some of their employees liked the firm the way it was: they liked their jobs, the family atmosphere, their contact with the clients and unlimited access to the owner. More often than not, they took their job in large part because of these things.

So when the firm starts to grow, adding more people, a busier workload, more specialization, bringing on professional “managers,” some of the “original” employees may find themselves in a job that they don’t really want—at least, not as much as the job they used to have. If they aren’t able to make the transition to the new environment, I promise, you will start to see it because these employees usually start “having issues.” They might become surly with their co-workers, uncooperative, resistant to new systems and procedures, lose their motivation, or exhibit frequent emotional outbursts. When that happens, the firm owner(s) need to address the issue relatively quickly, before it affects the morale and productivity of the entire office.

Change of any kind in a small business should be handled very carefully. Owners (and those professional managers) should take care not to assume tenured employees will happily embrace whatever new job or duties they are assigned. It’s very important in these times to make sure that a lot of time is spent with each employee, explaining new job descriptions, positions, roles and goals.

However, (and this is the true cost of change) it’s possible that some of a firm’s longest employees will simply not be happy with their new role in the “new” firm. Owners should never come to this conclusion lightly: only after they’ve worked with an employee to make their new situation acceptable, and have exhausted every avenue they can think of to “make it work.”

Should the time come that you’ve tried everything you can think of, and the employee is still not happy or fitting into the changing firm and its new culture, you both need to admit that it’s not working out.  If you don’t, the new firm and the now changed culture will suffer greatly. It only takes one person who is not happy and not willing to change to kill a culture of growth.  Sometimes as the winds of change blow, we have to adjust our sails.