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Practice Management > Building Your Business > Leadership

Your Team's Communication Problems Can Kill Your Firm

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What You Need to Know

  • Org charts are not organizational strategies.
  • A lack of clear communication lines can lead to confusion and overwhelm staff.
  • The easiest way to grow a firm is make sure your organization strategy has clear communication flows.

What’s the first thing you think of when you hear the words “organizational strategy”?

Many advisory firm owners think about boxes on a piece of paper. Inside those boxes are the names of employees. The senior-level employees are at the top of the page, and less-experienced employees are in boxes at the bottom. Also included, no doubt, are a lot of lines pointing from one box to another to show who manages each staff member.

While organizational strategy might result in a chart like the one described above, that’s not what it really is.

Organizational strategy is the process by which you align communication flow throughout your firm. When the communication flow is good, service and growth are good, too. But when the lines of communication get crossed, growth typically stalls.

This is why you must fix the way communication flows internally.

Understand Communication Flow

Communication (or the lack of it) is one of the main determinants in why a firm ultimately succeeds or fails. How and what you communicate to others is the foundation of great client service and a well-functioning team.

Growth is limited by rampant miscommunication, which unfortunately is common. It takes time and energy to learn to communicate well and to listen to what others are trying to say.

It also means knowing who is communicating, and to whom this commication is directed. While an organizational strategy might feel like boxes on a chart, its real purpose is to illustrate how a firm communicates.

As consultants, we often can pinpoint in a few minutes where there is conflict, internal communication problems and low productivity simply by looking at an organizational chart, which usually has lines going in too many directions.

If you want to solve your firm’s human capital problems, partnership conflicts and employee turnover issues, the first area to examine is your organizational strategy.

Generally, firms will try to solve these problems by teaching communication techniques. Helpful, but not as effective as a well-designed organizational strategy.

Realign Communication

The first step in improving your firm’s communication flow is to figure out which positions should be communicating with each other. In most cases, a firm is trying to make too many people communicate with each other, and the result is there are no clear lines to the leader.

Consider this example for your firm: Do you want your senior advisors communicating directly to client service specialists? Or do you want senior advisors to communicate with associate advisors, who can then deliver the message to client services?

If too many people are talking, everyone ends up going in circles.

The best option is to clearly outline the flow of communication and improve that flow overtime by illustrating who talks to who. What you do not want is for senior advisors, associate advisors or even someone from the financial planning department all delivering information to client services.

When people don’t know who to communicate with, miscommunication and overcommunicating is the result. This takes precious leadership time away. Also, employees get overwhelmed with multiple communiques and have less time to get anything done.

Improve Communication to Improve Your Capacity

The largest barrier to improving communication isn’t the work it requires to get things figured out internally. It’s is the belief that money can fix miscommunication problems.

Some owners immediately will look at compensation strategy as the solution for poor communication, conflict and/or partnership problems. The “thought” (although often unaware that there is another option) is that if compensation structures were better, people would fall in line. That’s not the answer.

To solve an organizational issue only requires great organizational strategies. For your firm to be more productive and happy, and to reduce conflicts, make sure communication is flowing in the right direction to the right positions.

You’ll find this dramatically improves the capacity for your team to work more effectively and with less confusion. Also, you’ll be able to provide exceptional client service to power your growth engine.

The easiest way to overcome growth problems, or to grow your firm faster, is to speed up communication and eliminate miscommunications. That begins with organizational strategy, not compensation and not marketing.