I recently had an advisor call about a problem employee. It seems his executive assistant frequently doesn’t do what he asks her to, often deliberately. His biggest issue was that he’d repeatedly asked her not to load him up with back-to-back client appointments (like many advisors, he needs time to clear his mind and review the next client’s file), but she continues to do it anyway.
When he asked her why she wasn’t doing as he asked, she responded that if his work habits were better organized, he could handle more appointments. (I should also mention that her compensation structure is based on how many client appointments he had, which partly contributed to the problem.)
I’ve found situations like this are all too common in independent advisory businesses. I think that’s partly because most owner-advisors don’t have much or any management training, but I’ve also found that most owners want their firm’s culture to be friendly and collegial. Consequently, they often treat their employees as equals.
While I personally understand this sentiment, I’ve also learned that every business needs a leader. Management by committee just doesn’t work. As a rule of thumb, I tell my clients that it’s okay to treat your employees as partners, just don’t expect them to be your partners yet.
For one thing, employee-employer relationships are complicated. Mutual respect, good communication, openness and working as a team are all very important to the success of a small business. Yet, as I said, every business needs a leader: someone to make key decisions, manage the staff and oversee their work.
In general, this leads to a productive and successful working environment, but sometimes, employees or owners get confused about their roles. When that happens, problems can arise, and sometimes they are big enough to affect the success of the business. Here are some the biggest problems that I see and what you can do about them.
The owner becoming too friendly. Again, there’s nothing wrong (and many things right) with owners treating their employees as friends. Up to a point. To build and run a successful advisory firm, owners need to get good information from their employees about what’s working and what isn’t, what problems they are facing, and what ideas they have for doing things better. However, it’s also important that everyone remember who’s making the final decision. While friendly disagreement can be healthy, it’s important that everyone remember who bears responsibility for the success or failure of the business.