Page 37 - Investment Advisor June 2022

THE FAST TRACK

By Angie Herbers

How to Expand Capacity Without

Adding Employees

Smart firms push decision-making and creative problem-solving

to employees, making them more engaged and motivated.

or most advisor firms, the prin- amount of time spent on employee man-
cipal way to sustain organic agement skyrockets.
Fgrowth is to add more clients. In other words, those at the top of the
To do that, firms need to expand their leadership structure end up spending a
capacity, either through hiring more huge amount of bandwidth — typically
advisors or building a more effi- 30% to 50% of their time — managing
cient business. employees. This top-down management is
Many advisory firm leaders will hire the core reason that firms run into capac-
first. There is nothing wrong with doing ity constraints as they grow. If key leaders
so, but a great many independent firms must spend a great deal of time managing
already have the capacity they need to every employee, it steals time away from
grow — it’s just a matter of unlocking it. achieving business growth goals.
How to do that? Before I tell you, let’s How do you unlock time for more
take a step back. business management without increas-
Advisors typically become successful ing employee management? There’s
To achieve sustainable by spending years helping their clients no shortcut to fixing this problem. To
growth, leaders must solve many problems, from buying cars achieve sustainable growth, leaders
must change the ethos of the organiza-
to funding their retirement. When those
change the ethos of advisors find themselves running a busi- tion to a decentralized one — one in
the organization to a ness that they’ve built, bought or inher- which an owner or core group of lead-
decentralized one — one ited, they automatically begin to treat ers will guide employees at all levels of
their employees like they treat their
the organization to solve problems and
in which an owner or clients. It just comes naturally. make decisions on their own. Doing
The problem is, talking to employees
core group of leaders like clients centralizes a firm’s communi- this requires real commitment, but the
payoff is that it decreases the employ-
will guide employees cation and problem-solving. It becomes ee management function and instantly
at all levels of the the responsibility of one professional or frees capacity to grow.

organization to solve a small group of professionals to give the Here are some tips on getting started:
solutions. In such cases, we find entire
Choose empathy over giving
problems and make organizations relying heavily on a few advice. Herbers & Co. conducted a
decisions on their own. people to solve all the problems they 2022 Leadership Study, and the No.
encounter, usually in consensus with 1 trait employees were looking for in
other leaders, much like they work in their leader, among both women and
consensus with their clients. men, was empathy. One shortcoming of
See the connection? How you com- many advisory firm leaders is that they
municate with your clients is not the truly don’t know how to lead people
same as how to communicate with your when they are not giving advice. They’re
employees. When decision-making and extremely comfortable guiding clients
problem-solving ability in a business is who seek their advice. But applying an
centralized to key decision-makers, the advice-giving approach to employees is

JUNE 2022 INVESTMENT ADVISOR 35