Back in November, I wrote a feature story for IA magazine based on my white paper that explained why traditional business school strategies don’t work very well in independent advisory firms, and what firm owners can do about it. Since then, I’ve been asked to give a number of speeches and write some follow- up articles on the subject, so I’ve spent some time mulling over various ways to talk about these issues that will resonate with advisors. One notion that’s occurred to me is that among the biggest mistakes that I’ve see business owners make in the advisory world is thinking about “What” instead of “Who.”
Let me explain. The “what” in my approach are the components of a business that we put down on paper: The business model, structure, organization chart, job descriptions, and the processes and procedures that describe how the business should run. This is where most business owners start, whether they are launching a company or reorganizing it to attain higher goals.
In fairness, this may be a good place to start if you’re running a large corporation (although I doubt this is how the most successful companies do it). With smaller business, that have fewer resources and narrower margins for error, these paper “whats” are a far too theoretical way to think about the firm. Which brings us to the “whos,” that is, the people who work in the business and prospective employees that you might hire.
It seems to me that smaller businesses (which lack HR departments that facilitate a revolving door of employees coming and going, formal training programs and pools of junior employees competing for advancement) are far more dependent on the strengths and weaknesses of their employees and on their ability to work together to build a successful firm. If that sounds like I’m talking about a team, I am. At least, that’s how I think of advisory firms.