A frustrated owner-advisor came to me awhile back, complaining that his staff just wasn’t getting the job done and looking to me to help sort out who needed to be replaced to get the business back on track. He had a large firm—over $1 billion in AUM, and many employees—so identifying the ‘culprits’ would be no small undertaking. So I asked him what his biggest problem was, and he answered: “I keep coming up with these great ideas to move the firm forward, but my people just don’t seem to be able to make them work.” 

Over the years, I’ve found that this is a common problem with larger independent advisory firms. They have the financial and human resources capital to move the business into promising new directions, but the results frequently don’t meet their owners’ expectations. And while the owners usually blame their employees, in my experience they are almost never the problem.

The real problem is that most firm owners and partners don’t know the difference between a ‘vision’ and a ‘strategy.’ Even great visions won’t go anywhere without a sound strategy to make them into reality. 

Like virtually all businesses, independent advisory firms need a ‘visionary’ to grow: someone who can see promising new directions in which to take the business. These ‘visions’ can be new services to add, more efficient ways to deliver existing services, new client niches to attract or a better way to describe what the firm doe, so it will resonate with clients, prospects and employees alike. Whatever the ‘new’ ideas are, growing businesses need someone who can come up with good ones. 

Unfortunately, coming up with ‘good’ new ideas isn’t enough. To succeed, businesses also have to make them work in the real world, and that’s where things get messy. The first problem that ‘visionary’ owners face is that, in larger firms, they usually delegate making their ‘vision’ into reality to someone else in the firm. But as it turns out, describing one’s ‘vision’ isn’t easy, and if the person(s) actually implementing the ‘vision’ doesn’t fully understand it, the chance of success is greatly reduced. 

Here’s an example: Suppose an owner-advisor decides that in the wake of the Department of Labor’s new rules for retirement advisors, getting into the 401(k) rollover advice niche would be a timely move for his/her firm, and assigns a partner with some retirement experience to work on it. Now even though the largest of independent advisory firms are still considered ‘small businesses’ by the U.S. government’s definition, they are complex businesses; the ramifications of ‘adding a new service’ is consequently, well, complex. 

Not only do you have to consider what the new service will be, who will perform it and how it will be ‘sold,’ but you also have to think about how it will fit into the existing business. How and how much will you charge for it? How will it fit into the existing fee structure? Will it be managed as a separate ‘department’ or fall under an existing department such as investment management or financial planning? Will it be cross-sold to existing clients or only to new clients? If it is cross-sold who will ‘sell’ it, how will they be trained to do so and who will be responsible for ensuring compliance with the new ‘rules?’ Finally, how will this new service fit into the firm’s marketing pitch?

Chances are the ‘visionary’ owner probably will have thought through most of these issues and will have a good ‘vision’ of exactly how the new service will fit into the firm.  But what are the chances that he/she will be able to convey this overall vision to someone else in a way that they will fully understand it?

To effectively communicate a ‘vision,’ one needs a detailed ‘strategy’ for making that vision into reality. A good strategy is a step-by-step plan for making a vision part of the firm: all the things that need to be considered and decided, and then the order in which each ‘next step’ should be taken.

This strategy is not something that can be delegated to someone else. But it can, and should, be created by both the visionary and the person(s) who will be responsible for its implementation. Only when the visionary is sure they are both on the same page, should he/she give the go-ahead for the strategy. 

But before you get started, a final word of caution about the second reason many visions fail: don’t get too attached to your strategy. In the Army they have a saying: ‘No battle plan is worth a damn once boots hit the ground.’

Remember that your strategy is just a starting place, the order of actions that seem the most reasonable at the time. So take the next step, see what happens, and make necessary adjustments not only to what you’ve done and plan to do, but to the strategy and the vision itself, if needed.

Growing a successful advisory firm is largely a trial-and-error process: your vision and strategy are no exceptions. And the failure of your vision is almost never your staff’s fault.