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Practice Management > Building Your Business

Stay in Your Lane, Part 2: Creating Infrastructure

By Angie Herbers

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In the summer of 2003, Jordy Nelson walked onto the Kansas State football practice field. The former quarterback of a local high school, he hadn’t been offered a scholarship or even been recruited. Luckily for Nelson, Bill Snyder was the K-State coach. After watching Nelson practice for a few weeks, Snyder asked him to switch from quarterback to playing wide receiver. The rest is Kansas State history. By his senior year, Nelson was one the best receivers in the country and was a consensus pick as an All-American 2007. He was also picked in the second round of the 2008 NFL draft by the Green Bay Packers, where he started as a receiver, catching a pass that led to Green Bay winning the Super Bowl in 2011, and was the top receiver in that game. He was named All-Pro in 2014.

Bill Snyder is one of the winningest coaches in college football history with 187 wins in 23 years—and that was while playing in the ultra-competitive Big 12 Conference, with perennial powerhouses Nebraska, Oklahoma and Texas. To succeed, he has to get the most out of each of his players. Nelson’s case is one of many instances where Snyder changed players’ positions or playing styles with dramatically good results.

Over the years, I’ve come to think of independent advisory firms as being very similar to the K-State football team: competing for clients and employees against larger, much-better-funded rivals throughout the financial services industry. Owner-advisors, like Snyder, are the coaches who need to get the most out of each and every employee to compete successfully. To do that, the best firm owners don’t pigeonhole their employees (or themselves) by job titles, academic degrees, experience, training or even by why they were hired. Instead, they assess employees’ skills, knowledge, abilities and inclinations to put them in jobs where they can have the most impact on the success of the firm.

Last month, I wrote about the problem of getting everyone in an advisory firm to “stay in their own lane.” That is, to have everyone in a firm, employees and owners alike, focusing on their jobs and responsibilities, rather than overlapping or conflicting with other people. We’ve found this to be a major problem in many independent firms—one that can greatly limit a firm’s success.

In that column, I suggested that to solve this problem, owner-advisors need to put the right employees in the right jobs, starting by creating a foundation based on where the firm is headed and how everyone in a firm fits into that vision. To get the ball rolling, I offered six questions that owner-advisors need to answer to build a solid foundation:

  1. What dream are you trying to build?

  2. Do your employees buy into your dream?

  3. What needs to be done to reach that dream?

  4. What are you willing to sacrifice for that dream?

  5. What are everyone’s strengths?

  6. What lane should everyone be in?

While these questions can be very helpful as far as they go, in our experience most firms have some difficulty taking the next step: translating the answers into reality. This month, I’d like to talk about how to take this next step with as little pain as possible. We call it “creating the infrastructure” to get people into the right lanes and keep them there. It doesn’t have to be hard, if you take it one step at a time. Here’s how:

1. Don’t focus on job titles.

When people try to organize a firm, they almost always start with job titles, creating theoretical boxes. Then they try to put people into those boxes, expecting them to adapt to the needs of the box they are in. Maybe you can begin to see the problem. We find it’s far better to build each box to fit each person: their strengths and weakness, what they want to do, etc. In many successful firms, we find that employees work all this out among themselves informally: “Hey, if you really like doing this, then do it, and I’ll take that off your desk.”

This under-the-table job swapping can lead to problems, not the least of which is that the firm’s owner won’t know who is doing what, or how the business really runs. We’ve seen this lead to some major disconnects between management decisions and firm operations. Still, the reality is that no two people do the same job in exactly the same way: The CEO job in one business isn’t the same as the CEO job in another business, and neither are the mail clerks. So, move job titles to the bottom of your to-do list and assign them only after you’ve determined what everyone is actually going to do.

2. Forget the org chart.

Yep, the old organizational chart has to go, too. Or, at least, it has to go last. We find that org charts can be even more counterproductive than job titles. They are usually intended to communicate lines of reporting and management supervision, but most advisory firms aren’t really big enough to require a lot of “management.” More importantly, as you get people working in the areas of their strengths, you’ll find they don’t really need much supervision. Particularly in small businesses such as independent advisory firms, you generally want the best person at each job to be doing that job. Even owner-advisors, who hopefully know a lot about financial advice and client care, aren’t the most knowledgeable about the back office, data entry and technology systems. The people doing those jobs may need some help with workload or a tough decision once in a while, but they usually don’t need supervision. What’s more, people who like to supervise other people are quite often the last people you want supervising anyone. Another benefit to keeping supervision to a minimum is that eliminating expensive middle management can really reduce operating overhead.

3. Focus on job descriptions.

Instead of starting with a pre-determined org chart or job titles, think about all the tasks that need to be done for your firm to be the firm you want and to deliver the services you want to deliver. Then, look at your team—their skills, strengths, weaknesses and preferences—and start thinking about who’s best at doing each task that needs to be done.

From there, some general job descriptions will begin to form, as will the names of people who should be taking on those responsibilities. You may find that you don’t really have the right person for one or more of those jobs, or that someone on staff doesn’t fit in this way of looking at the business. Building a successful business can require some tough decisions. You might also find that one or more people (including yourself) may have to take on some responsibilities that they don’t really like. Combining those duties with others that the person does like can help; so can making the assignment temporary, until the firm grows large enough to warrant a full-time employee for it.

4. Do it together.

In most firms (with 20 employees or less), we see creating a firm’s infrastructure as a team event. Because the employees themselves are in much closer touch with some tasks, their input is important in determining who should do them. And to make the firm run well, their buy-in is essential. Plus, you’ll probably need some people to compromise on what they prefer to do versus what needs to be done. Consequently, we find it’s far better to include everyone in the firm in the writing of job descriptions—and in determining who’s going to take responsibility for what. You can do this one-on-one, through written submissions or in group meetings. We like using all three: There’s no downside to maximum input. The important thing is to make sure that you know what everyone wants to do and believe they should be doing.

By creating a firm infrastructure based on matching all the tasks that your ideal firm requires with the skills and preferences of firm employees and owners, you can put the right players in the right positions and virtually eliminate the confusion, friction and poor performance caused by people straying out of their lanes. The result is invariably a more successful firm. Next month, I’ll tell you how to maintain this structure as your firm grows.

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