The 4 Styles of Advisor Leadership

The Operator

These are people who are "action-oriented." They are focused on getting things done, and are comfortable improvising or using unconventional solutions to solve the problem at hand. When they have solved it, they move on to the next problem. These folks often work prodigious hours and expect the same from those around them. They lead by example, tending to push themselves as hard as they do everyone else. They are often comfortable working alone and abhor being micromanaged. They are the kind of people who would rather ask for forgiveness if things don't work out, than first seek permission to act in the way they see fit.

Operators' strength as leaders is that they tend to give their employees the same latitude that they prefer. They don't micromanage and are more forgiving of employees who try and fail than they are of those who don't try at all.

Operators tend to do well in smaller firms that require their constant energy. As firms grow, and they transition into management roles and eventually to CEO, operators can become bored without hands-on involvement. Consequently, they are often happier to promote another partner into the CEO position, while retaining a more hands-on job for themselves such as rainmaker, new business development or even acquisition of other firms.

The Processor

These folks are classic managers. They value routine, trust data, are wary of intuition and hunches, prefer not be to rushed, tend toward the status quo and dislike risk. Their strength is their consistency: Their employees know exactly what to expect and what is expected of them. Because they are risk-averse, they recognize potential problems and take steps to avoid or manage risks.

Processors excel in mid-sized firms that have found a successful formula and can grow by continuing to apply it consistently. When the firm's business model finally reaches a plateau, most processors are happy to keep on doing what they have always done. Those owners who do want more growth usually step aside into one of the service roles — portfolio management or working with key clients — and turn over the CEO role to a more visionary partner.

The Synergist

These are "people" people. They like the company of others, tend to be comfortable in group environments, have a high degree of emotional intelligence, read people well, build strong relationships and understand group dynamics. These advisors tend to succeed through strength of personality — people like them and like working for them. They build consensus for their own ideas, listen to their employees and are quick to recognize their good ideas as well. Consequently, they create a strong sense of teamwork, and keep everyone working together toward the same goals.

Of these four leadership types — visionary, operator, processor and synergist — only the people-oriented skill set of synergists is generally considered to be "learned"; the other three styles appear to be natural inclinations. Consequently, we find that owner-advisors who fall into those types are much more successful when they recognize their type, so they can take advantage of their strengths and surround themselves with professionals who complement their weaknesses.

Doing this requires a very different mindset from what it took to launch one's firm, and to grow it to the point at which firm employees become more than a supporting cast for the owner. Of course, many advisors (the majority, as far as we can tell) don't want to grow their firms beyond this point: They are both comfortable and happy in their role as primary revenue source, and with its implications for their income and the eventual selling value of their firm.

But owner-advisors who find the benefits of a larger firm attractive — financially, professionally, culturally — need to decide what role they want to play in a larger firm, and create their new firm accordingly. We've found that one of the universal truths in the independent advisory business is that the larger the firm, the greater the need for good leadership. To fill that role, owners need to go with their strengths and the strengths of everyone around them.

— Read "You're the Owner, So Own Up" on ThinkAdvisor.