Financial services firms frequently struggle to grow because managers don’t understand how to create a culture that identifies, supports and rewards growth in employees, especially younger team members.
Culture is driven from the top, and it is management’s responsibility to put in place a company environment that allows employees to thrive. This is an obvious statement, but in reality, many firms come up short in terms of execution.
This isn’t from a lack of desire, but advisors are trained to put clients’ needs first, and of course, being client-centric is essential to any firm’s success. But the smartest advisors also treat their own business as a client.
We are in an industry where the greatest assets are clients and staff members. So executing comes down to not only being client-centric but also employee-centric.
Better people should equal better advice. Better advice should equal a better client experience.
A better client experience should equal more clients spreading the word. Thus, the equation is simple: better people + better advice + better client satisfaction = growth.
This laser focus on people can cause firm to feel as if, at times, it is taking a step backwards. Investing in people in the right way takes time.
It may mean being less productive in the short term to build increased capabilities for the future. It is a multiplier effect.
Having this type of focus is important in attracting and keeping motivated employees, especially when it comes to the next generation of high performers.
According to a 2013 PWC study on workplace habits, “Millennials place a high priority on workplace culture and desire a work environment that emphasizes teamwork and a sense of community. They also value transparency (especially as it relates to decisions about their careers).”
It is easy to become busy and forget to bring younger staff along for the ride. This doesn’t require a formal shadowing program or one more thing to manage.
Slow down, and think about learning opportunities for staff members. Look at the meetings on the calendar, and be intentional about including them.
Letting employees tag along takes no additional time, and their knowledge and energy level will grow.
ATTRACTING WITH ACCOUNTABILITY
Maximizing return on human capital requires firms to keep raising expectations for their employees. Most advisors are wired to please and serve, which is why their clients love them.
However, many advisors can have a deficit in handling conflict and holding people accountable. Advisors have to be careful that they aren’t rewarding average performance.
Get clear about what is expected. Be consistent in those expectations, and hold employees accountable to meeting them.
Although recruiting and retaining top talent is difficult, top performers will be attracted to and stay at an organization where expectations are high and where accountability for low performance and rewards for a job well done are consistent.
Company culture isn’t defined by whether people can wear jeans on Friday or bring their dogs to work. Culture is largely driven by how clearly managers identify and express areas of strength not only to clients but also to employees.
How does the practice offer unique benefits to clients? Does the firm focus on planning, asset management or both?
Does the firm serve a niche market? How does it deliver on its specific strengths?
There are two approaches to building a firm.
One road to growth is to simply lay out financial incentives for employees and to stay focused only on client acquisition. This is likely to have some effect, but it does little to encourage commitment and engagement.
Those who choose the less-traveled road understand that optimal incentives can only be built after a firm knows what it stands for, is clear about the skills needed to build for the future and creates a culture of true accountability.
Jay Hummel is senior vice president of advisory services at Envestnet in Cincinnati.
This story is part of a 30-day series on smart ways to grow your practice. It was originally published on Sept. 25, 2015.