Who's going to sit in your chair and meet with your clients when you're no longer doing it? That question leaves many advisors speechless. Here's what one planner told me earlier this year about her succession concerns: "I'm thinking about my next phase in life and I am not sure I want to leave the practice. I would like to scale back, but that means I need to have someone in place who can also be a decision-maker."

She told me she wasn't sure if there was anyone in her office who demonstrated good leadership skills. "I have someone who can manage the office and I have good planners, but I'm not sure if any of these people could really lead the office if I weren't around," she said. "In fact, I'm not even sure how to assess leadership skills."



Picking the next boss is not an easy task, especially for many advisors who don't always feel competent in leading their own practices. Most of us started out as a one-person shop, doing every job that needed to be done to serve our clients well. When those tasks became too overwhelming, we hired someone to handle some of the jobs we could delegate comfortably. That's the day we each became an employer and that's the day we needed to treat our practice like a business.

Before you can decide who should lead your practice after you've moved on, you need to be able to describe what you believe is a good leader. Years ago, I came up with a list of 10 attributes that I felt defined good leadership skills. For me, a good leader:

* Engenders trust.

* Makes prompt decisions and manages time effectively.

* Is accountable and holds others accountable.

* Is sensitive and responsive to the needs of others.

* Inspires people to find their own level of success.

* Creates an environment of problem-solving, creativity and learning.

* Is optimistic and confident in his abilities and in those of others.

* Is capable of turning his vision into a realistic action plan.

* Communicates openly and easily.

* Motivates himself and others.

Next, I turned these attributes into a leadership peer review survey. Each person in my office was asked to complete the survey for all the other employees of the firm. My initial survey had 79 questions that I've refined and made more specific over time. For example, instead of asking, "Does this person engender trust?" I ask, "Does a person promote an ethical business culture, demonstrate honesty in the workplace and promote inclusiveness within the organization?"

To assess the ability to inspire others, I may ask whether an employee encourages staff to stretch into challenging roles, or whether that person works with colleagues to create opportunities for personal development. Does he or she allow people to learn from their mistakes, or appreciate the value others bring to problem solving? Does this employee empower people to make decisions?

Some of the questions you design can assess more than one attribute. For example, the following questions may help assess communication, accountability and realistic action plans. Does he or she:

* Spend time to listen to other viewpoints?

* Put appropriate measures in place to understand clearly how teams are performing?

* Help others understand the impact of both short-term and long-term decisions?

* Express clear expectations of the task at hand?

* Prioritize tasks and projects with a sense of urgency and clarity?

While you are designing your survey, you might consider some questions with regard to client relationships or business development. For example, does he or she:

* Develop strong relationships with key decision-makers?

* Demonstrate curiosity about client needs and how the firm can add value?

* Focus on being client-centric?



Once you've written all your questions, mix them up so they are not grouped in any order. This way, your questions are not so obviously devised around a certain concept or attribute. You can also place several closely related questions throughout the survey. I find that sometimes when you rephrase a question, people may understand it better and give a more detailed answer.

I recommend you use software to design and distribute your survey. Even if you are a three-person firm, using software helps to make the survey more professional and assures your staff their answers will not be seen by anyone else. You can use simple survey software like Survey Monkey to type your questions into a survey format. I use Qualtrics because it happens to be available to me at Texas Tech, where I teach.

Both these software packages allow you to develop your questions and responses in any format you wish. I designed my questions as statements so that people can respond by degrees such as always, often, sometimes, rarely and never. This helps accommodate gray area responses to get more accurate results.

Once you've written your questions, set up one survey for each of the people in your office. The software allows you to invite people to visit the surveys for all the other staffers in the office, responding anonymously to each question. Anonymity is important because you want people to be as candid as possible. You also want to assure them that their answers cannot be shared so it will be impossible for anyone to identify them.

When I gave this leadership survey to my office mates, I included everyone, including our receptionist, because I wanted her to know that I did not discount anyone's ability or opportunity to be a leader. You may decide you want to limit your survey to those you have identified as possible candidates for succession. Whatever your choice, encourage everyone to complete the surveys you've requested.



I also recrafted the original questions into a self-assessment survey so that each staff member and partner could have the opportunity to evaluate his or her own leadership skills. This additional information becomes very useful as you compare what you and an employee's peers think of that employee's potential for leadership.

I suggest you structure your leadership skills assessment as a peer review, where all the people in your office evaluate one another. Using the assessments from others in your office will help you see how your candidates are viewed and accepted by their peers. Of course, you should complete a survey on each of your candidates before you read the results from their peers.

Bear in mind, especially if you are looking at younger staff members, that someone whose results suggest he or she does not motivate others well could still have the potential for leadership. That person may just need the mentoring and experience to develop that skill.

After I finished my own survey and decided which of my staff had the most potential, I outlined with them their annual goals and benchmarks for assuming new leadership roles. Together, we selected opportunities that would best give them the experiences they needed to achieve their goals. For example, one of my candidates was given the day-to-day responsibilities for our professionals and their development. As he began to meet his own professional goals, he started working with a personal coach and is now our managing partner.

Finally, it's vital to remember that you don't need to have a big organization to develop a process for assessing your staff's leadership potential. You just need to have a firm handle on what attributes you think are most important.


Deena Katz, CFP, is a Financial Planning columnist and an associate professor of personal financial planning at Texas Tech University. She is also chairwoman of Evensky & Katz, an advisory firm in Coral Gables, Fla.

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