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Practice Management > Building Your Business

Should You Be Managing Other People? How to Tell

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My last blog for ThinkAdvisor (To Motivate Employees, Listen to Them) offered some guidelines about how owner-advisors can be better managers of their employees — decreasing turnover while increasing efficiency and productivity. While those strategies can work for most firm owners, they won’t work for all. Over the years, I’ve come to realize that there are some people (and advisors, too) who just shouldn’t be managers.

That may sound harsh, but I’m not talking about personalities (although, in rare cases, that is the issue). Rather, it’s more of a decision thing with owner advisors: they need to have a heart to heart with themselves and decide whether they really want to manage people. As you might suspect, the answer is a bit more complex than the question. 

Most advisors respond by looking at the benefits of having a larger firm: If I had more people to help me, I could focus more on the things I like to do (work with clients, manage portfolios, attract more clients, etc.) and/or I could handle more clients, and increase revenues and income. Yet they rarely think about the impact that those employees will have on their quality of life: will they enjoy their lives more or less if they spend part of each day managing people?

Advisors who have some management experience — either at another firm or in another industry — will already have a good idea whether or not they enjoy managing people. But for most advisors, this is uncharted territory. (And I would point out that “managing” employees within a large corporation that has other people to recruit, train, and deal with HR issues is much different from a small-business environment.) 

To help independent advisory firm owners decide whether they’ll enjoy managing people, we use this simple test: transparency. How comfortable will you be with being completely open and honest with your employees? Open about who you are, your strengths and weaknesses, the limits of your knowledge, your goals, your plans for your future and the future of the firm, your performance, their performance, their role in the firm (now and in the future), and the performance of your business, in the present and toward attaining its goals? 

The environment at a small business is very different than what exists at large corporations: they are more intimate, more personal, more transparent. There are few, if any, secrets: everyone knows how many clients you have, what they pay, when you get new ones and when you lose them. They know how much you and everyone else works and what you do and don’t do.

When I think of all my clients — those who manage people well and those not so much — the good ones, i.e., those who should be managers, are very confident in being transparent about all these things.

However, I have some clients who are simply not comfortable being so open with employees, with being that vulnerable. It seems to be in their DNA to be more private, either out of a lack of confidence, or fear or for other reasons.

It also doesn’t seem to be something they can change. If you can’t bring yourself to be transparent, then you probably shouldn’t be managing other people—in a small business, anyway. 

One final aspect of a manager’s vulnerability is the realization that a large part of their success—and the success of their business—depends on their employees. No matter how much of a superstar you are, as your staff grows, a larger and larger part of how the outside world (clients, prospective clients, affiliates, your community, etc.) views you and interacts with you will depend on the actions of your employees.

That means it will increasingly be in your best interest to train those employees, to support them, motivate them, inspire them, lead them and be transparent with them. The more they know about your business, the more they can help. In short, your firm will become more about them and less about you.

If you can’t see yourself doing this, you’ll be a lot better off as a solo practitioner: having one or two administrative people, outsourcing the rest—staying small and mighty and being happy. 


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