The goal for many of today’s independent advisory firms is to grow to $1 billion in client assets under management. However, to get there, these businesses need a chief executive officer who is dedicated full-time to running and growing the business.
To fill this role, the founding owners of firms must decide whether they want the CEO job, or want someone from either inside or outside their firm to fill that role.
Although it’s a difficult decision, most firm owners still prefer to take the job themselves. Yet a growing percentage seem to be taking a different direction: either promoting someone from within, or bringing in an outsider to fill the CEO role.
Granted, it’s a tough decision for most firm owners to stop working with clients and/or to stop becoming the rainmaker for new clients. Yet it seems just as difficult for many firm owners to let a new CEO actually serve as the CEO. This can create many problems within their firms — and seriously jeopardize the future of their businesses.
Here are steps that owner advisors need to take to successfully add an effective chief executive:
1. Hire the right person. Decide what the needs of your business are and what you want in a CEO to meet those needs. Remember that nobody’s good at everything.
Good CEOs have a good grasp of their abilities and do not hesitate to work with other experts to fill in the gaps. Still, it will be easier to let them do their job if they have most of the attributes that you believe the job requires.
2. Make the CEO’s role very clear. For some reason, advisory firm owners seem to be inclined to “just do something” now and work out the “details” later. While that may work in some instances, hiring a CEO is not one of them.
For a CEO who is not the firm founder/owner to be successful, their role has to be very clear to everyone in the firm from the beginning: the owner, other partners, all employees, and themselves.