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The Biggest Problem With Your Advisory Business? You

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One of the interesting developments from having merged our firm over the past year has been explaining our consulting process to a new group of employees. In those discussions, a question keeps popping up that reminded me of an issue I haven’t really thought about for many years. “Why can’t we get clients to do what we want them to do?”

I guess I’ve been working with owner-advisors for so long now that I just expect them to be difficult in the beginning of our relationship. In fact, we have a whole module built into the beginning of our consulting process to help advisors become better—and therefore more successful—owners. Here’s how it works. 

The key to becoming a better business owner, or simply understanding a firm owner, is understanding that most advisory firms don’t have “business” problems. That’s because, compared to other businesses, the advisory business is relatively simple. The services provided fall into a pretty narrow range, most “target” clients recognize the need for those services and the skills required to deliver those services are well known, as are the elements of these businesses: client service, sales and marketing, financial, operations, human capital, and strategic management.

In fact, I’ve never worked with an advisory firm that had a “business problem,” outside of the need for tweaks such as better marketing or human capital plans.

That means the “problem” with virtually every independent advisory is a “you” problem. At least, that’s how we put it to owner advisors. Slow growth, high employee turnover, cash flow, profitability, over work, client attrition: in almost every case these problems are the direct result of the owner (despite all the other reasons they’ll cite).

Owner problems are hard and they hurt. They are hard because they take a lot of work to solve and they hurt because that work takes a lot of time. That’s why addressing all the other “problems” don’t work—and why few owners or consultants address the real problem. 

The real problem is that even though it’s a simple business, the advisory business is very tough on owners: it continually challenges their confidence. As you’ll read in my May column in Investment Advisor, as an advisory business grows, it changes dramatically as it reaches certain barriers. That means that what worked to grow a firm to its current level won’t work to take it to the next level. And at that next level, what’s required to grow will change again. So an owner never really knows what he/she is doing.

Then there are major changes in the business—a merger, the first acquisition, first professional employee, the first partner, etc.—each putting the owner-advisor back on uncertain ground. Finally, there are always some “life” challenges: A first marriage, first child, divorce, and the fear of success (the point at which your knowledge in running the business is below your success).

Each of these issues can shake an owner’s confidence: reducing their enthusiasm, leadership ability, desire to grow the business and their ability to surround themselves with the right people. 

Consequently, the most important part of our work is helping owner-advisors deal with the challenges they face, getting them back on track to meeting their goals, and having fun in their businesses. Here’s how we do it: 

  1. Restore Confidence

    To get their confidence back, we have firm owners take small successful steps, one at a time. Hiring the right person, firing a wrong person, starting a client newsletter, holding a client reception, etc. They don’t have to do big things, but they have to be successful. In fact, most of our efforts at this point are preventing owners from making big (read: risky) moves. Nothing builds confidence like success. So we go with the sure, or almost sure, things.
  2. Remotivate

    Remember when you started your firm? How excited and driven you were? To get the feeling back, we have owners relive those first days, usually by writing the story of why they started. We’ll talk with them about those days, and why they lost those feelings. Then we’ll help them to see their business today as a new challenge, to be tackled just as they did when they opened their doors.
  3. Teach Leadership

    Just as we all have unique personalities, we also have unique leadership styles. One reason firm owners lose enthusiasm for their business is that they feel they have to be something they aren’t. We help them to develop their own leadership profile to become more of what they are. We have them make a list of leaders they admire, including their unique characteristics, and then use them to develop their own leadership style. Then we monitor their behavior in their firms, keeping score on how they are leading: which helps them to translate their style into specific actions.
  4. Set Goals

    Once they’ve made some successful small steps, it’s time for owners to focus their newfound confidence on larger goals (but remember: goals won’t be effective if you haven’t solved the first three issues). Goals help focus motivation and enthusiasm and reduce wasted effort and resources. We keep goals short term, at least to start, amd make them attainable: you can always set a higher goal later. And we always include goal monitoring in case our efforts need some tweaking or changing circumstances require a different goal.

  5. Create Relationships

    Once an owner-advisor has himself/herself under control, he/she can focus on building relationships to help them reach their goals with people who believe in what they’re trying to do and in the way they want to do it. It’s not just a matter of finding people with the right skills and experience: good working relationships also include sharing the owner’s vision and passion, and working well together with the firm owner and the other employees.

Some firm owners can make these changes themselves, but in our experience, the vast majority need outside help. Working on your business is relatively easy; working on yourself is a lot more difficult. It’s a lot easier for an outside observer to see which stage you’re on, and what you need to do to work through it.

But either way, to succeed in the advisory business you have to recognize the way the business, and your private life, can affect your confidence, and take the appropriate steps to get back in the game.