For participants in Power in Practice, an in-house business coaching program offered by Commonwealth Financial Network, the course can sometimes feel like drinking from a fire hose. The program content is designed for advisors who are committed to transitioning their practices into true businesses, but its unique framework—including workshops, peer group meetings and coaching calls—gives participants the tools, structure and motivation they need to take their businesses to the next level.
A new approach to practice management
Advisors frequently comment that they just don’t have enough time to attend to practice management issues. In fact, many advisors spend more than enough time on practice management; they’re simply not focusing on activities with the highest ROI. To help advisors develop an effective practice management infrastructure, Power in Practice breaks down their responsibilities into six fundamental areas:
- Small business leadership (i.e., embracing the CEO role and leading a thriving entity)
- Human resources management
- Operational efficiency and scalability
- Consistent, targeted marketing
- Risk management
- Ongoing and enhanced rainmaking
Most participants can point to at least one aspect that they already have in place, an area in which the program presents an opportunity for improvement rather than completely new material.
In Workshop No. 1, (See “Power in Practice: A Coaching Program to Last a Career—Part 1,” Investment Advisor, May 2012), participants were introduced to several of the key practice management topics, including business planning, marketing and production enhancement. Their individual follow-up activities included:
- Writing a two-page business plan, strategic directives for the next three years and up to seven SMART goals for the current year.
- Creating or refining their firm’s human resources documents, including job descriptions for all positions as well as for the CEO, a performance review template and an employee handbook.
- Completing a niche-specific marketing calendar with tactics to be implemented throughout the year by designated staff members.
These materials will become part of the practice management manual that each advisor assembles over the course of the program. Participants keep their manuals in electronic format, organized by the six key topics. The advisors are encouraged to bring a copy of their manuals with them to the workshops to share with their colleagues. Throughout the program, they jot down new ideas and changes in the hard-copy manual. Then, after the final workshop, they incorporate their revisions in the electronic version, ensuring that they start the next year with a complete, up-to-date manual.
Workshop No. 2
In the three months since the first workshop, the 40 participants had been talking at least monthly with their peer groups. By the time Workshop No. 2 rolled around, many of the advisors had built relationships with their fellow participants, enhancing our discussions of the session’s main topics: operational efficiency and revenue enhancement.
Advisors often say they want their practices to run like a well-oiled machine, but achieving operational efficiency isn’t second nature for most advisors. You may not love thinking about process improvement, making policy decisions or figuring out how to best use technology, but these are the areas that can yield true efficiency for your office.
Process improvement. As the famous Chinese proverb says, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” That’s the guiding idea behind this part of the workshop, in which participants use flowcharts to design efficient processes and checklists to document how those processes are carried out.
Almost all offices use the following core processes on a daily basis:
- Preparing for client review meetings
- Conducting review meetings
- Following up on review meetings
- Handling specific service issues, such as when a client calls requesting cash
- Converting prospects to clients
Flowcharting how these processes are completed in their respective offices had a triple benefit for participants. First, they gained an understanding of all the steps in the process. Second, they realized how their own actions sometimes impede the flow of work in their offices. And third, by sharing and comparing their flowcharts with other advisors, they began to form ideas for process improvement.
Post-workshop, the advisors will use the flowcharting technique again with their staff members, working through the nine most critical processes for their offices and then converting the flowcharts into concise, easy-to-follow checklists. Indeed, working with staff to document processes—flowcharting the current steps, exploring options for improvement, making decisions about the best flow for the office and documenting the steps in a checklist—helps cement the procedure and goes a long way toward increasing a firm’s efficiency.
Power in Practice takeaway: Trying to document a current process, identify areas for improvement and decide on a new process all at the same time usually doesn’t work very well. Taking a sequential approach is more conducive to success.
Policy decisions. Another component of operational efficiency involves making policy decisions regarding:
- The type of client best served by the practice (versus clients who would be better served elsewhere)
- Client categorization and the criteria for each category
- How you will define which services each client category receives (i.e., creating a tiered service matrix)
Many of the advisors were particularly interested in the time-saving potential of a tiered service matrix. For instance, if it’s established that each “A” client has a quarterly review meeting, staff can proactively schedule appointments without any direction from the advisor. Defining the service matrix can also help you think through what clients really value. Do “A” clients need or even want a quarterly review meeting?