Fifteen years ago, I realized that the next step in the evolution of the emerging independent advisory business was for senior advisors to leverage themselves first, with both clerical and skilled staff, and then, with additional professionals. And I built my consulting business around helping owner-advisors better integrate and manage their growing "human capital."
Four years ago, my (now) partner, Kristen Luke (founder of Wealth Management Marketing) and I both realized that to go to the next level, advisory firms needed to integrate their marketing efforts with their overall business management: last year, we merged our firms and rebranded as Kaleido Inc., so that we could offer integrated business consulting, as well.
Today, in our client firms (and throughout the industry), we're seeing what we believe is the next phase in advisory firm growth: supporting employee innovation. That is, evolving firms that can respond to changing client needs and new markets, by enabling innovation from the ground up—rather than from the top down.
In our work, we've seen that as many advisory firms have grown dramatically, their owner-advisors have morphed from "hands-on" managers into essentially "corporate" executives, who are largely detached from day-to-day operations of their firms. And yet they continue to make decisions as if they were still in the trenches: they assume they know what's going on, when they really don't.
This disconnect results in many "bad" decisions, which reduce operational efficiency and ignore significant business opportunities. It also stifles innovation within a firm that would have led to even more efficient operations and identified new ways to grow the business. This is a particularly big problem with firms that have opened (or acquired) new offices, in new locations: where cultural, client, and business climate differences may require different client services, target clients and/or marketing strategies.
Consequently, we believe that the challenge for growing advisory firms today is to transfer the source of innovation from the owner-advisor(s) to the employees themselves. Here's how we help owner-advisors to make this transition within their businesses:
1) Hire for talent, train for skill.
The key to building a firm that can innovate is to hire people who can innovate. I know, this sounds pretty obvious, but believe me, it's not easy to do. Firm owners tend to hire people to "solve" a specific problem: people with "experience" in the back office, or asset management or client service. But often this experience doesn't translate well into an advisory firm. We find that firms do better to hire bright, personable, motivated people—and training them to do a specific job. (Think football coaches who draft/recruit the best athletes.) It may take a little longer to "bring them up to speed." But when you do, you'll not only have an employee who will do a good job: they'll make your firm better, too.
2) Give employees the tools they need to excel at their jobs.
As I've written many times before, nothing communicates a lack of seriousness about an employee's job than failing to give them the tools to do it well. Great employees take their jobs seriously. If the firm owner doesn't, they won't either.
