In one of my favorite movies, “Shawshank Redemption,” a prison inmate inmate (Tim Robbins) had his request for getting some books in the prison turned down. So every day, he wrote a letter to prison authorities requesting the books. Every day. Day after day. For years. Eventually, his tenacity wore down the authorities and he got his books.
Based on this movie, we have a common term we made up in my consulting business (well, actually, my friend Scott made it up and we adopted it) called, “Shawshanking!” We industry consultants (depending on our philosophies) repeat and repeat and repeat concepts over and over and over to our clients until they get it. I use this approach—“Shawshanking”—when my clients bring up industry “benchmarking,” which happens about this time every year. Every year, I have this same conversation over and over and over again with my newer owner-advisor clients. Here’s how it goes:
Advisor Client: “Have you seen the XYZ advisory industry benchmarks that just came out?”
Me: “I already know your firm benchmarks, based on your goals. So why do I need to look at the industry benchmark?”
Advisor Client: “But we’re under/average with/over the industry benchmarks!”
Me: “Based on this information, do you want to change your goals?”
Advisor Client: “No, my goals are exactly where I want my business to go.”
Me: “Do you remember that we are ahead of your firm’s benchmarks so far?”
Advisor Client: “Yes.”
Me: “So, again, why are you asking me about the industry benchmarks?”
Advisor Client: “Okay, I get it. They don’t matter to me.”
My Head (aka, the things I say to myself in my head that don’t often actually come out of my mouth to clients): “Check. Jeez…talk to you about this next year, again and again and again…[eye roll] Dude, I need to write a blog about this topic!”
And so it goes. I have this same conversation with the same advisors every year, for three or four years—broken record, over and over and over again. Then, suddenly, one year it seems to sink in, and they never ask again. They’ve been Shawshanked!
Everybody probably knows by now that I hate industry benchmarks. I have written about it a ta-tillion (that’s also a term we made up which means we’ve lost count) times. Not only because they make me have this same dumb conversation many times, every year, but also because they mean very little to individual advisory firms themselves. While benchmarks have a place in every industry, I am certain after nearly 15 years of consulting with advisors that they tell firms very little about their firm.
Here’s an example: 90% of my advisory clients exceed all the benchmarks. The 10% who don’t failed to do so because they are special firms with a unique, specialized service to clients and, as a result, the benchmarks don’t apply to them. So if nearly all my firms exceed the industry benchmarks, do we really need to pat them on the back or even to lower our standards?
My clients are successful not because of a benchmark but because, as a leadership team, we carefully work out where they want their firms to go, over prescribed time frames, and then create a detailed plan to get them there. While independent advisory businesses don’t really differ all that much, owner-advisors’ goals do. So the compilation of how “average advisory firms” have performed in the past tells us next to nothing about what each firm should do in their own futures.