Have you ever seen a football coach go into the media room after his team has taken a big-time beating and make a statement that goes something like: "This one's on me — the other coach just out-coached me"? It doesn't happen a lot, but it does happen, usually by good coaches.
Why would they say that? The coach wasn't on the field, he didn't play the game. And he's certainly not helping himself with the team owner (or college athletic director). But good coaches know that their players undoubtedly are already going to feel bad enough about being trounced, and they don't need him or the media piling on. What's more, he's sending a message: We're all in this together — we win as a team, and we lose as a team.
As the independent advisory business transitions from small business to the next level, firm owners need to transition, too. We've written a lot over the years, about how, as firms grow, owners need to become good people managers. They also need to become good leaders; and one of the most critical times for owner-advisors to step up and be a leader is when they or their employees make a mistake or when some new initiative doesn't do as well as expected. The biggest challenge we face in working with advisory firms is when firm owners won't take responsibility for their decisions and constantly blame their employees for their failures and mistakes.
As we've written about many times, one of the hardest ideas for owner-advisors to get their minds around is that as their firms grow, their success depends less and less on what they do, and more and more on what their employees do. Consequently, their relationship with their employees becomes increasingly important. Here are a few of the ways we've seen those relationships deteriorate when firm owners fail to take responsibility:
- Loss of motivation. Put yourself in an employee's position: they do as they were directed to do (often, without being asked if they think it was a good idea), things turn out badly, and their firm owner blames them. How excited would you be about your job? Your firm? How hard would you try the next time around?
- Erosion of trust. The above scenario leads what we've come to understand as a betrayal of trust. As in any relationships, employees need to believe that the person or people that they work for has their best interests at heart: that they want their employees to do good jobs, and that are all working together toward the success of their business. But when things go badly, and managers don't own up to their part in it, that bond is broken. And employees start to feel more like adversaries than team members.
- Loss of an owners' mentality. In our work with advisory firms, we emphasize creating an "owner's mentality" in every employee. That is, creating the feeling of having a stake in the success of the business, a knowledge that each employee's contribution has a positive effect on that success. When employees start of feel that "we're not really all in this together," their connection to the business's success evaporates, as does their impact on its success.
- High turnover. It's not hard to see how this would result in a firm having a hard time keeping their employees. And, as the history of the independent advisory business taught us: high employee turnover is a big-time drag on firm growth.
Rather than blaming employees, we work with owner-advisors and other managers to act more constructively. Here's what we recommend:
