Page 35 - Investment Advisor - December 2023

THe FAST TrAcK

By Angie Herbers

leadership Means taking an Honest look

at real Problems

The best managers put aside quick-fix tasks and do the hard work of

identifying deeper challenges.

’m often asked, “What’s the biggest answer was surprising and instructive:
practice management mistake that He didn’t say that the firm’s executive
Ifirms make?” compensation plan needed reconfigur-
My two-plus decades of consulting ing and updating, as he’d told us earlier.
for financial advisor businesses has Instead, he said, “I see partners who’ve
shown me that the biggest error isn’t been in conflict for years.”
really a practice management mistake. For changes to compensation or for
It’s a leadership misstep. other practice management shifts to be
Many firm leaders seek to apply effective, the firm had to first address
quick-fix solutions to their businesses the long-term tensions among the part-
instead of looking inward to identify the ners — since this was the cause of the
real problem they need to address. inertia around a new compensation plan
Plus, when advisory business leaders and other issues.
take action to address problems, their
fixes are usually tied to practice man- oUt oF FoCUs
Behind every great agement — such as implementing a new What’s most important to note is that the
business is great compensation plan, marketing strategy firm’s leader indeed made a flawed leap
by deciding to focus on compensation
or sales process.
leadership, the Here’s an example. A client firm lead- rather than on partnership disagree-
essential quality that er recently came to Herbers & Co. with ments and communication problems. In
a desire to update his firm’s partnership
essence, he made a leadership misstep.
makes firms stand compensation plan after the business alone; there are countless people, inside
No leader can accomplish great things
hadn’t reviewed its arrangement in a
out and succeed. few years. and outside of their firms, who help
We went through our normal infor- along the way. But making decisions and
mation-gathering process and devel- taking responsibility for those decisions
oped a plan. But months later, the plan is what leaders must do alone. And they
had not been executed. ultimately earn credit or blame for the
The leader of the organization hesi- results of these decisions.
tated when we asked him about this. If leaders are uncertain about their
He didn’t request us to tweak the plan, decision-making ability, they tend to
and he wasn’t giving us any feedback throw solutions into the air to see if it
(or pushback) about issues tied to its might solve problems, solicit the advice
implementation. of friends in leadership roles, join study
Naturally, we needed to find out what groups or follow the decisions of other
was going on, and so we changed our managers in their firm.
tack. In a meeting, I asked the leader to In other words, they distract them-
pretend he was standing on a balcony, selves from admitting, finding and
looking down at his business. facing their firm’s deepest problems by
Next, I asked him what he saw. His focusing instead on quick solutions or

December 2023 Investment AdvIsor 33