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December 28, 2011 at 07:00 PM
A big part of my motivation to create the P4 principles that were covered in the November 2011 issue of Investment Advisor (“Let Go to Grow”) was watching my owner/advisor clients make the same employee mistakes over and over, never questioning their methods and greatly diminishing the success of their firms.
As far as I can tell, their blueprint for mediocrity is widely copied throughout the independent advisory industry.
Owner/advisors’ typical experience with junior advisors says it all. First, they make an all-out effort to hire a “blue chip” job candidate, taking far longer than their firm can really afford and then overpaying to get this hot prospect to take the job. Next, they spend virtually no time training their new employee or even introducing her to the systems, procedures, services, clients, philosophy or goals of the firm—yet they have very high expectations that their “star” will hit the ground running, making a substantial impact from day one. Then, when the new hire struggles (predictably, in my view), owner/advisors quickly become disillusioned with the employee and vent their disappointment and anger by becoming overly critical. Which, once again predictably, starts a downward spiral of unhappiness on both the employee’s and owner’s parts, usually ending with the tarnished employee leaving or being fired—and the owner looking to correct the mistake by hiring an even bigger star.
If you’re an owner/advisor and this scenario doesn’t resonate with you, you should probably take a harder look at your hiring process. As I said, from my contact with thousands of young advisors across the industry, my sense is that it’s almost a universal problem. I call it “setting employees up to fail”—that is, placing newly hired employees in a nearly impossible situation with unrealistic expectations for their impact on the firm, then doing it again and again—and it applies just as often to support staff as it does to professional help. The key to breaking this cycle is for owner/advisors to change the way they think about and work with employees.
The biggest hurdle for most owner/advisors is to let go of much of what they believe or fear about having employees. Like many professionals, independent advisors tend to focus their time and attention on their clients, with employees kind of an afterthought at best and a necessary evil at worst. But as the best doctors, dentists and hospitals have found, much of patient care comes from junior and non-professional staff. By training and supporting their staff, the patients’ experiences are greatly enhanced.
This is equally, if not more, true in advisory firms. In my P4 program, the first and most important P is preparation, and the first step is preparing owners to work with their employees. At the heart of acquiring a productive owner’s mentality is learning to work with employees as partners in their effort to provide the best possible client service. It’s helpful to think of every job at one’s firm as equally important, perhaps not in terms of revenue generation, but certainly in creating each client’s overall experience. In the most successful firms, employees don’t simply leverage the advisors to be more productive, they are part of a team, working together to attract and to serve the firm’s clients.
To start building this team mentality, owner/advisors need to stop thinking of themselves as “the boss” and become teachers, mentors and coaches to employees to help them become better at their jobs and to work together toward the firm’s common goal. I know, this probably sounds pretty touchy-feely, especially to business-school-trained managers. But, believe me, the effect on a small business such as an advisory firm can be dramatic. When advisors assume these roles from the moment a new employee starts with the firm until that employee starts to learn and grow on his own and to mentor other employees, the business becomes more than just a one- or two-person show and can really take off.
