Four Ways to Build Sustainable Growth
September 23, 2012 11:14 PM
Four Ways to Build Sustainable Growth
Growth is essential to the advisory industry, but not all growth is good. Rather than letting growth take advantage of you in the form of diminishing shareholder value, firms should strive for sustainability. According to FA Insight, firms can reach sustainable growth by ways of a deliberate approach. This kind of growth ultimately translates into superior financial performance and an improved quality of client service delivery.
1. Define Your Target Markets
It is important for firms to maintain a sharp focus on the client. That means understanding the type of client the firm that it is best suited to serve. By honing in on a specific target client, firms will be able to develop a client value proposition that can help lead to higher operational efficiency, productivity, and profitability.
2. Create a Distinct Client Value Proposition
To create a distinct client value proposition, firms have to create a better quality workforce. This can be achieved by focusing on the management of people and process. Well documented and continually reviewed major business-to-client processes allow staff members to be more aware of and understand this documentation.
3. Maintain a Disciplined Approach Toward Technology
It is not how much firms devote to technology spending, but how they apply and manage it that will determine whether or not growth will work in their favor. Technology needs to be integrated and supportive of company processes. There needs to be adequate technology training for staff. And firms need to have a consistent approach towards technology evaluation to stay ahead of the curve.
4. Understand and Track the Correlation Between Productivity and Sustainable Growth
Firms need to devote attention to outcome per effort expended. This means continually tracking productivity metrics such as revenue per FTE and AUM per FTE. The more efficient and focused a professional is, the quicker the client turnaround.
Remember: It's Design, Not Chance
Firms that achieve sustainable growth do not get there by mere chance - they take the necessary steps to get there. Sustainable growth requires that a firm is able to define a specific client target and best deliver value to them. Combining this understanding with disciplined management practices will allow firms to reap the greatest benefits.
