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Practice Management > Building Your Business

Zen and the Art of Advisory Firm Management

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I’m not a big fan of the many attempts over the years to apply Buddhist principles to business management (although I do like the Kinder Institute’s use of “life planning” as a service model). It’s always seemed to be a bit forced, and usually pretty unrealistic. But the other day, I was talking about my work with advisory firm owners to a friend of mine who practices Zen, and he pointed out that the principles I use to teach owners to run more successful firms are right out of the Buddha’s sutras.

I’ve come to these principles not by reading religious texts, but by working with firm owners for many years. For instance, when I take a business owner as a new client, she or he is almost always worried about the future: How can the business grow? Where will new clients come from? How will we handle the additional work load? What new services should we add? How can I possibly work more than I do now? What will happen if or when the stock market drops?

These are all good questions to be sure. However, they are not questions that most advisory firm owners — or their business consultants — are in a position to answer today, which means that fretting about them now is just a waste of time and energy. When I start working with a new client, the first thing I do is to get them to focus on the present; specifically, on what they love about where their firm is now.

This new focus does two things. First, focusing on positives rather than problems elevates their mood and restores their physical and emotional energy. Second, it creates a mental starting place from which to talk about the future, and to build on, to create a business that they will love even more.

To redirect owner advisors’ minds away from a fearful future, and toward a happy present, I take them through the following five steps:

1. Live in the present. I’ve found the most effective way to do this is to get owners to live within the income they are generating right now — that is, to create a business model that does not require more. This shifts the conversation away from “needing” to grow the business, to “how do we want to grow” the business.

Often, I find that firm owners will live beyond their means simply because they know they can add one more client to catch up. The problem is that then they are always trying to catch up, which creates a large degree of anxiety. What’s more, the vast majority of owners today delay the whole tax thing. I make them file their tax returns on time, and pay the taxes and estimates on time, too.

In the worst cases, I will refuse to work with them until they get a financial advisor for themselves. That’s because no one can help them build a successful business when they are making business decisions solely on increasing the amount of money they take home. Many advisors run their businesses based on cash flow because that is the only thing they know how to do. But this kind of thinking dooms a business to stagnate at best because it doesn’t provide any resources for investing in growth strategies.

2. Be patient. Once owners bite the bullet on cash flow and start budgeting for growth, they usually become overly excited about their new plan. I suspect that secretly, they are still focused on increasing their income as fast as possible. To slow them down, I bring them back to the present by getting them to face the reality that sustainable growth is rarely a windfall. It happens over time; one step forward and then the next step. For the plan to succeed, their focus needs to be totally on the step they are currently taking.

3. Stop comparing their firm to other firms. That includes not participating or reading the industry “benchmarking studies.” Comparison makes owners feel inadequate, and it distracts them from taking the next step in their plan. When they stop comparing, or wanting to reach a benchmark, they start thinking about what they truly want, not what the studies or the publications tell them they should be. The vast majority of the firms I work with would not easily fit into a benchmark comparison. The data is great for me as the consultant, but quite useless to many of my client firms.

4. Address past mistakes. Firm owners should not live in the past, but they don’t have to live with it, either. Like most of us, owners don’t like admitting their mistakes, but they have to admit to them before we can fix them, like firing a problem employee or discontinuing a project that is not working out. Clinging to past mistakes creates drag on your firm, on its resources and on the people who work for you. Building the firm you want includes jettisoning the things that are preventing you from having it.

5. Get rid of ego. Having an ego is both thinking you are better and thinking you are lesser. Most advisors I have known actually think they are lesser than other advisors. The result is that they seek validation for what they are doing from people, benchmarking, consultants and coaches. Feeling lesser leads to overspending in the business and overserving clients, the two things that kill the margin. To be a true leader, you have to believe that no one (even the worst employee you have) is any greater or lesser a person than anyone else. If you think like this with your people, it’s amazing what you will do for each other to help accomplish the goals of the business. 

Living in the present, being patient, stopping comparisons, addressing past mistakes and letting go of your ego. Hmmm: Maybe there is something to Zen in business after all.

— Read The Face in the Mirror: Admitting (and Overcoming) Advisor Fears on ThinkAdvisor.


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