The adviser business gap
The gap between the good firms and the great firms will start widening this year, says Brett Davidson. Here’s what’s driving it.
2015 is off to a flying start for many of the great firms in the profession. This is the year I expect to see an ever widening gap between the businesses that have got it right and the rest.
Because they’ve been working on the right issues, namely:
• Developing strong business management skills
• Gaining business enhancing insights from their financial information
• Building strong teams and managing their talent
• Spreading the good news (and generating loads of new work) via strong marketing and communications programmes
How do these areas get your business performing at a higher rate than the rest?
Strong business management consists of a clear business plan so everyone knows the firm’s direction. Regular leadership meetings ensure that execution occurs every single week and regular communication with the rest of the team reinforces the vision.
It takes nine exposures to a new idea for it to start to stick. If you hold a quarterly vision day with your team (and let’s be honest, most firms don’t even do that), it will take two years for them to start to get the vision for where you are headed. Good business management involves regular communication of the vision to your team.
The great businesses also know their values, write them down and live them as an example to the whole team. They know that culture matters. This is what drives team behaviour when no one is around to supervise.
Great business leaders review their financial information regularly and look to find the insights that it’s providing. They don’t just collect a load of data every month.
Finding the insights is hard work and often they enlist an external expert to help them in the analysis. However, they invest in this part of their business because running a profitable enterprise and being rewarded for their hard work matters to them.
Funnily enough, a focus on profits also delivers a focus on ever greater client service and a fantastic client experience. Long-term sustainable profits and increasing enterprise value go hand in hand with a strong customer focus; they are not mutually exclusive.
Team building and talent management
Getting the right people on board is one of the real keys to success. If you can’t hand off work to someone who can do it better than you can, you stay stuck in a cycle of checking everything and doing half the work yourself.
It’s frustrating, unproductive and eventually grinds you into submission. The great firms have worked hard on good recruitment processes and good staff management and development. Often this is with the help of an external HR expert. This type of support is not expensive and can add loads of value.
The top firms also recognise that gaining some media profile is actually a great recruitment tool. By raising their profile in the industry press they are becoming magnets to attract the talent. There are other great firms out there that would be perfect homes for talented staff, but no one knows they exist and so they are forced to fight to secure good people.
Marketing and communications
All the successful and rapidly growing firms that I know either have a rainmaker who brings in the new work, or they have created an enterprise driven marketing process that generates lead flow for them. This will usually consist of referral work from clients and professional connections, online leads via Unbiased and Vouched For type services, client seminars or other marketing events, and regular client contact using e-newsletters and social media.
The social media stuff gives them reach and leverage and helps facilitate extra client referrals by making it easy for their existing clients to share the firms communications whenever they read something they like. The client just hits ‘forward’ or ‘share’ and next thing you know the message is out to people just like them; the perfect referrals.
It’s all pretty straightforward, but there is work in putting it together. That’s why the business management piece matters so much. As the old saying goes, business is 10% strategy and 90% execution. If you are not moving forward in baby steps every single week, your execution is flawed and might well be the reason you are not achieving your business potential.
Are you going to be great this year? It all depends on how well you are addressing these key issues.
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