Page 36 - Investment Advisor - November 2023

These leaders may have lots of ideas
on how midsize firms can renew their
growth. But they often don’t have
enough time to deploy, implement and
manage impactful strategies.
Also, they usually don’t have a man-
agement team at this stage that is able
to share the heavy lift, because fund-
ing these human resources may not be
economically logical or feasible. Thus,
midsize firms often fail to achieve the
valuation alpha that seems tantalizingly
within their reach.
To break the growth logjam, firm
founders may want to consider hiring
more executives. However, this doesn’t
solve the need to clearly identify and
compartmentalize what needs to be
done to get the firm growing again. “Carpenters like to say that they measure
Many firm founders became suc-
cessful by trusting their gut in making twice and cut once, to avoid wasting wood as
decisions. But to move on from the mid-
lifecycle growth plateau, they also need well as time. The same principle applies to
to move on from this intuition-based advisory firms. Unless owners have the capital
approach. As their bandwidth becomes
narrower, embracing clarity, focus and a to invest in extra talent, they must prepare
disciplined approach becomes not only well and then handle the heavy lifting of
advantageous but also essential.
implementation. There’s no doubt that it’s the
CHALLenGes & IMPLeMentAtIon
Midsize firms tend to struggle with hardest stage of the process.”
three key business planning areas. The
first is building a growth strategy built increase that ratio? There are lots of sure twice and cut once, to avoid wasting
on identifying the key performance indi- options, such as retraining advisors so wood as well as time. The same principle
cator that your firm wants to move. This they can close prospects in one meeting, applies to advisory firms. Unless own-
underlines the importance of data. rather than doing lots of uncompen- ers have the capital to invest in extra
While an organization’s initiatives sated legwork and then trying to close. talent, they must prepare well and then
and decisions may have been guided by In addition to this step, how does a firm handle the heavy lifting of implementa-
intuition at an earlier stage, it’s critical pick what’s best? tion. There’s no doubt that it’s the hardest
to rely on high-quality information and Finally, once a management strat- stage of the process.
data to build strategies going forward. egy is decided upon, implementation Firm owners often hope that the
Identifying the exact trend line you becomes another tricky area. Who’s playbook that got them to the middle
want to move will dictate the strategy responsible for mobilizing and marshal- tier of the industry takes them to the
you’ll need to deploy. ing the people and resources needed to next level. But what they really need is
The second tricky area is manage- make the change? to ask for more help and to embrace a
ment of the strategy — in other words, All these challenges lead us back to data-driven, more tightly focused lead-
deciding precisely what steps your firm intellectual capital. Who on your team ership style. In other words, substantial-
will take. Let’s say you target your firm’s can make sure the right implementation ly expanding their leadership abilities is
close ratio as the KPI to move, seeking happens? We have to keep in mind that often the answer.
to increase the percentage of prospects the firm owner or owners already have
that it converts to clients from 33% to, plenty on their plate handling day-to- Angie Herbers is an independent consultant to
say, 50%. day operations. the advisory industry. She can be reached at Adobe Stock
What strategy should it deploy to Carpenters like to say that they mea- [email protected].

34 Investment AdvIsor November 2023 | ThinkAdvisor.com