Every advisor who decides to grow beyond a one-person practice thinks about setting goals; that's pretty straightforward. But once you've set a goal and reached it, then what?

Goal setting (and, of course, pursuing) can have a significant impact on your firm's future organization and success. Yet traditional, rational economic theory suggests goals should focus on relatively short-term strategies - specifically, those related to expanding your business in order to make more money. This concept is deeply ingrained in our capitalist system.

Business goals that are too narrowly focused, however, or have too short a time frame can create impediments to becoming a great company. How should companies change their decision-making process to propel them to enduring success?

Here's what the firm where I work, Savant Capial Management, is doing to move in that direction.



A new view of business success is emerging, based substantially on changing social values. The understanding that companies of all sizes are deeply embedded pillars of society has grown in recent decades - to the point where most business owners now realize that their choices can influence social behavior, the economy and even governments.

Research by Harvard Business School professor Rosabeth Moss Kanter, an expert on business organizations, suggests that in order to build enduring success, companies should employ a specific decision framework called social logic, which measures performance beyond short-term ROI. It's this kind of performance, she says, that sustains firms over the long term.

Here are a number of success criteria she has identified:

*Supplying goods and services that improve the lives of customers and clients without harming anyone in the process.

*Providing jobs with emotional fulfillment and enhancing employees' quality of life.

*Developing a strong network of vendors and suppliers as business partners.

*Ensuring financial viability by carefully managing profits while deploying resources for improvements, innovation and growth.

*Having managers who promote employee empowerment; support training, innovation and emotional engagement; and provide values-based leadership that includes an expected societal contribution by employees.

Kanter suggests that firms develop their own social logic frameworks to build an enduringly great firm. We've tried to use her principles to shape the firm where I work.



One of the most important components she cites is a common purpose, shared with outside stakeholders. Take investment powerhouse BlackRock. The firm says its mission is to provide "a better financial future for our clients"; to do so, one of its four guiding principles is to be a fiduciary to its clients. "Our clarity of purpose is crystal clear, has never changed, and never will," CEO Larry Fink recently told Harvard Business Review. "We are a fiduciary to our clients. We serve them. We never, ever compete with them." To focus the collective will of an organization, you need buy-in from everyone on the firm's core purposes, principles and mission.

At the firm where I work, we talk about building ideal futures. And we don't stop with our clients; we help our employees and communities as well. In the places we call home, we actively participate in local causes, while concurrently helping clients contribute to the well-being of their own communities. For our employees, an ideal future includes opportunities for career growth, meaningful work and financial reward. In this way, we see ourselves as a socially responsible engine for change involving all stakeholders.

Another important component is long-term focus. Most significant societal impact occurs over long periods of time - sometimes even decades or generations. Having a longer-term perspective mitigates short-term profitability and growth variances.

For example, my firm undertakes a significant amount of internal and external training and development for employees. Talent development takes time - years in most cases - and is negative on the bottom line in the short term. Even so, we recently created an internal education resource called Savant Academy, offering team members classes on both Savant-specific topics as well as personal development.

Take a moment and ask yourself: Am I investing in the people who will develop my organization's strategy in the future?



The third component Kanter cites involves generating positive emotion. Making employees do tasks simply because you say so borders on inappropriate management. Instead, motivate others and promote self- and peer-regulation through the dissemination of institutional values.

Great companies are clear about the purposes for which they exist, with rock-solid principles that can see them through good times and bad. At Savant, we promote values that are positive and actionable:

*Excellence: We strive to set the standard of excellence for all to follow. We innovate so we all may grow. Our firm exists so the lives of our clients and team are better.

*Faithfulness: We serve clients with the highest fiduciary standard.

*Trust: The foundation on which all relationships are based, trust is built on the ways we speak and behave.

*Lifelong learning: Eternal and cumulative, we encourage continued learning as a way to inspire our future.

*Respect: We treat our clients, colleagues and competitors with dignity. Our behavior is a testament to our respect.

*Growth: We embrace above-average growth and positive change to benefit our clients, team, shareholders and communities. We work as a team to reach ever-increasing opportunities through innovation and entrepreneurship.

Finally, Kanter cites two other components of success: innovation and what she calls self-organization.

Stop for a minute and think about your own firm's innovation strategy: Who comes up with ideas in your firm? Is it a select few or everyone? What rewards are there for those who innovate and outperform expectations? And conversely, how do you treat those who have flat-lined?

On the final point: Self-organization refers to the ability of individuals to develop and manager their own workloads. Good companies rely on relationships and principles rather than on rules and regulations. Great companies go a step further by trusting their people to be self-determining professionals. Rather than needing direction, team members are expected to coordinate activities, organize their own work processes and innovate as necessary.



In his book Good to Great, business consultant Jim Collins used quantitative criteria to establish greatness. One of his criteria: three times more return than the general market for a period of at least 15 years. In examining 40 years of data, he found 11 firms that qualified, and then identified their shared characteristics. Collins found these companies had core employees who were passionate about the firm's purpose and mission; were energetic, talented and innovative; and were disciplined about working every day through the ups and downs to move the company toward its goals.

Mapping Collins' findings against Kanter's social logic framework shows striking similarities. Think less about changing strategies or tactics in response to a singular event or short-term situation - playing musical chairs with staff, for instance, or implementing more rules and regulations. Rather, infuse the entire organization with enduring principles and core values; train people and getting out of their way; and pay team members handsomely for innovation and performance, we are well on our way to building a great firm.

The road to greatness isn't short or easy, but it's well-marked. Are you traveling in the right direction?



Glenn G. Kautt, CFP, EA, AIFA, is a Financial Planning columnist and vice chairman of Savant Capital Management, based in Rockford, Ill.


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