This is the first in a seven-part series presenting best practices to advisors on how to use practice management techniques to improve their businesses. In part one, we define what is meant by the term and present five steps to executing practice management techniques.
To say that the markets have been on a wild ride lately would be quite an understatement. The tumultuous downward pitches and upward grappling we’ve seen in August 2011 could make even the most level-headed person feel uncertain about where things are going. In times like these, when it’s easy to feel insecure, the focus of any financial advisory practice increasingly needs to be on making the right decisions. And to do that, strong practice management is not just important—it’s absolutely necessary.
But what does practice management even mean?
If you were to ask 100 people for the meaning of practice management, you’d likely get 100 different definitions. That in itself doesn’t inspire confidence, so clearly defining what practice management means is essential. Armed with a standard definition, you can establish a unified thought process within your company, which makes it easier to set a baseline of quality service for your clients.
The most concise, reliable definition of practice management is this:
“A set of optimized services and solutions that enable advisors to achieve their most important business objectives.”
If you establish this definition as the guiding principle of every action you and your employees take, you’ll be able to find solutions to any challenge presented by the markets and adapt to clients’ goals, even under changing conditions.
How Effective Are Your Tools?
At the heart of the concept is effectiveness. The pace of your practice’s day-to-day operations needs to be quick, but it’s just as important for you to be flexible in reacting to changes and respond to client requests in hours, not days—something that some advisory practices struggle with. The ability to turn on a dime will set your practice apart and your clients will appreciate your ability to move quickly, maximizing results for them.
But to be able to do that, you need the right practice management tools, like specifically designed software systems that help in translating high-level business objectives and goals into executable plans and processes. Even something as basic as email communication can be evaluated to determine whether it is as efficient as possible. For instance, do you have systems in place to track response times, bounce rates and whether emails are being opened? If you don’t, you’re missing out on an opportunity to make your practice more agile and responsive to clients.
In challenging times, good practice management has multiple benefits, from growing revenue and decreasing risk to providing more value to your clients and shareholders. And even when the sailing is smoother, effective practice management enables you to build on your success by giving you the tools to look for expanded opportunities and improved performance.
Here are five key steps to execute practice management techniques, as seen in the image above:
- Assessing your practice and setting goals
- Translating goals into actions
- Executing tasks
- Measuring results
- Evaluating the effectiveness of your strategies and benchmarking against your peers
Acquiring in-depth knowledge about practice management goes beyond establishing a definition.
In subsequent blog posts in this seven-part series, we will discuss each of the five steps to execute practice management techniques and provide some specific advice on how to complete each step. Stay tuned.