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 leadership’s responsibility to put in place a company environment that enables employees to thrive. This is an obvious statement, but in reality, many firms I visit come up short in execution. This isn’t from a lack of desire, but advisors are trained to put the client’s needs at the head of everything they do, and of course, being client centric is essential to any firm’s success. I believe the smartest advisors also treat their own business as a client.
We are in an industry where our greatest assets ride elevators -- our people and our clients. Due to this fact, I’ve always believed executing in our industry comes down to not only being client-centric, but 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 a firm to feel like, at times, they are taking a step backwards. Investing in people in the right way takes time. You may be less productive in the short term to build increased capabilities for the future. It’s 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).”
I was lucky to start my career working for extremely smart people who let me sit in important meetings, take notes, say nothing, but learn a lot. I remember thinking how great it was they let me tag along. I became smarter and gained much needed context to the work I was completing. My tasks went from seeming meaningless to very important for the way we served our clients. It’s easy to get 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 the learning opportunities you can give to your staff. Look at the meetings on your calendar and be intentional about including them. Letting them tag along takes no additional time from your day. Their knowledge and energy level will grow.
ATTRACTING WITH ACCOUNTABILITY
Maximizing return on human capital requires firms to keep raising expectations of their employees. As I travel around the country, I find most advisors are wired to please and serve. It’s why their clients love them. However, many advisors can have a deficit in handling conflict and holding people accountable. Advisors have to be careful they aren’t rewarding average performance. Get clear about what you expect. Be consistent in those expectations and hold employees accountable to meeting them. I know how hard it is in many market places to recruit and retain top talent. 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.
I don’t define company culture by whether or not people can wear jeans on Friday or bring their dogs to work. Culture is largely driven by how clearly you can identify and express your areas of strength not only to clients but also to employees. Where does your practice offer unique benefits to clients? Do you focus on planning, or asset management, or both? Do you service a niche market? How do you deliver on their specific strengths?
There are two approaches to growing your 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 choosing 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. Which road will you choose?
Jay Hummel is senior vice president of advisory services at Envestnet.