When David Rockefeller was chairman and CEO of Chase Manhattan Bank (now part of JPMorgan Chase Bank) he created a strategy he called “management by wandering around.” That is, he would spend as much time as he could actually wandering around the bank’s headquarters talking to employees that he didn’t regularly come in contact with, from receptionists and secretaries to managers and vice presidents. He would inquire about lives and their families, but equally as important, he asked about their jobs—particularly, what challenges and problems they had when trying to do a good job—and what could be done to make things better. You can imagine how quickly bureaucratic roadblocks got fixed with a word by the Chairman, and the impact on employees, that he cared enough to talk to them—and actually listen.
Most financial advisors are “people people,” who enjoy meeting with their clients and helping them to live happier and more rewarding lives. Yet I’ve found that many firm owners don’t apply their people skills to their relationships with their employees. I don’t think it’s an exaggeration to say that, like David Rockefeller, most good leaders understand that their success largely depends on the people who work for them. Of course, as business owners, you’re free to treat your employees however you want (within the bounds of employment law). But if you don’t make them feel like valuable members of your team, your firm will be plagued by low morale and high turnover—and will never grow larger than your own abilities.
I currently have an owner-advisor client who’s a perfect example. He doesn’t know how to talk to his employees. He constantly gives them directives meant to be carried out to the letter, and doesn’t care about their thoughts and ideas. He has his employees so beaten down that they’ve stopped offering any opinions of their own, and simply carry out his instructions, no matter how harmful they maybe to their firm and its clients.
As you may have guessed, his firm has very high turnover and very low productivity. The problem, of course, is him. Yet, when I have discussions about what’s holding his firm back, he doesn’t want to listen to my opinion, either.
This may be an extreme example, but it’s not an uncommon problem. The really tragic part is that it’s not that hard to solve.