Changing the Culture of a Firm for Improved Performance

Wednesday, June 6th, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

The fol­low­ing is a white paper I wrote recently that includes ideas to help firms to improve both advi­sor and firm per­for­mance.  The ideas are based on “out-of-box” think­ing to help gen­er­ate changes that are vital to the long-term suc­cess of finan­cial ser­vices firms:

The finan­cial ser­vices indus­try is a rel­a­tively new indus­try and as such, it is an indus­try of con­stant change and improve­ment. Advi­sors, by nature, are not a patient group and would like to see the rate of change accelerated.

This white paper is writ­ten to inspire change and improve the cul­ture of firms. I have con­sid­ered the risks involved and am com­fort­able that the ini­tia­tives below can help firms to not only change but also pros­per from these changes.

Firms, that have the abil­ity to change quickly, can gain a com­pet­i­tive advan­tage over the com­pe­ti­tion. Cul­tural changes improve advi­sor hap­pi­ness, which will result in advi­sors being more pro­duc­tive, more effec­tive at man­ag­ing client rela­tion­ships and bet­ter at sales.

By cre­at­ing a pos­i­tive envi­ron­ment, you cre­ate an atmos­phere in which every­body in the orga­ni­za­tion can thrive. Do you want to dou­ble the num­ber of advi­sors in your firm? Get your advi­sors telling your story to other advi­sors. Get your branch man­agers so enthused about the firm and their abil­ity to build some­thing unique and fun in their com­mu­nity that they are inspired to tell the firm’s story to other advi­sors, com­mu­nity lead­ers and other cen­ters of influence.

Inspire your advi­sors to start build­ing their busi­nesses again. Most firms are heavy in mature advi­sors who have found a com­fort zone and stopped grow­ing. This has huge impli­ca­tions on asset and rev­enue growth and share­holder value. Mature busi­nesses have devel­oped strong client, busi­ness and per­sonal net­works that fuel growth. As an advisor’s busi­ness grows, the rate of growth should increase, not decrease.

Happy advi­sors drive brand aware­ness. Develop strong brand loy­alty within your advi­sor com­mu­nity and you can lever­age your mar­ket­ing dol­lars. A national or regional net­work of advi­sors will spend well in excess of your cor­po­rate mar­ket­ing budget.

Here are some ideas to cre­ate a pos­i­tive envi­ron­ment in your firm:

Let’s start with senior man­age­ment. The role of senior man­age­ment is to develop and man­age a vision, advi­sor loy­alty plan and develop a pos­i­tive envi­ron­ment. Firms must con­sis­tently keep all employ­ees updated on progress of all ini­tia­tives and demon­strate the abil­ity to keep promises. Advi­sors must be com­pletely engaged in the vision.

This can be achieved by hav­ing an indi­vid­ual or team respon­si­ble for the corporation’s Advi­sor Expe­ri­ence. This can be achieved by repo­si­tion­ing a national man­age­ment team. National or Regional Man­agers need to be more involved in help­ing advi­sors to achieve improved per­for­mance, rather than focused almost entirely on com­pet­i­tive recruit­ing and rev­enue. They need to have per­sonal rela­tion­ships with all peo­ple, includ­ing man­agers, advi­sors and admin­is­tra­tive staff in branches in their regions. By focus­ing on improv­ing the processes, rev­enue will take care of itself.

Advi­sor Expe­ri­ence, regional or national man­agers need to focus on all aspects of national, regional, branch and advi­sor per­for­mance. They under­stand the cur­rent sta­tus of all advi­sors’ busi­nesses, plans and tar­get dates and team devel­op­ment plans. They are respon­si­ble for man­ag­ing or col­lab­o­rat­ing with other national man­age­ment team mem­bers and insur­ing that lines of com­mu­ni­ca­tion are clear, improve­ment is con­stant and promises are kept.

Man­age­ment cur­rently views advi­sors as highly inde­pen­dent and entre­pre­neur­ial and dif­fi­cult to chan­nel. This leads advi­sors to seek solu­tions from sources out­side the firm to improve their busi­nesses. This leads to a high degree of inefficiency.

Sim­i­larly, advi­sors are all over the map when man­ag­ing invest­ments. This approach has a neg­a­tive impact on invest­ment returns, which impacts client reten­tion and achiev­ing greater share of wallet.

By estab­lish­ing a cul­ture of col­lab­o­ra­tion, advi­sors can both improve prac­tice and invest­ment per­for­mance. This can be achieved by estab­lish­ing quar­terly meet­ings that are deliv­ered across a branch net­work or through tech­nol­ogy. Each meet­ing focuses on invest­ment for half a day and prac­tice man­age­ment for half a day.

The pur­pose of the invest­ment meet­ings is to dis­cuss invest­ment and port­fo­lio strate­gies, invest­ment man­ager selec­tion and related issues. Advi­sors should be able to leave these meet­ings with client meet­ing pack­ages to help them improve the qual­ity and effi­ciency of client pre­sen­ta­tions and lever­age their time.

This allows an Advi­sor Expe­ri­ence Man­ager to man­age his advi­sor rela­tion­ships in an effi­cient man­ner and free time to ful­fill other respon­si­bil­i­ties, such as recruit­ing and proac­tive man­age­ment of his ter­ri­tory. It also cre­ates unique­ness and dif­fer­en­ti­a­tion to improve recruit­ing performance.

This col­lab­o­ra­tive approach also lends itself to improved client acqui­si­tion. Advi­sors, as a group, are not effec­tive at busi­ness devel­op­ment. They are not skilled at mar­ket­ing, such as devel­op­ment of mar­ket­ing mes­sages, mar­ket­ing mate­r­ial and web­sites. They are start­ing to play around with LinkedIn, Face­book and Twitter.

Sim­i­larly, it will help in devel­op­ing new advi­sors and improv­ing prob­a­bil­ity of suc­cess by pro­vid­ing them with turnkey solu­tions instead of allow­ing them to develop their own solu­tions. New advi­sor devel­op­ment is impor­tant to the suc­cess of orga­ni­za­tions heavy in mature advisors.

Indus­try stud­ies have shown that advi­sors who spend in excess of 60% of their time in client-facing activ­ity earn three to five times the income of those who do not. Time spent on busi­ness devel­op­ment is part of the 60% but time spent on devel­op­ment of web­sites, etc. is a poor use of time, espe­cially when the qual­ity of the out­put is con­sid­ered. This becomes an even big­ger prob­lem when the col­lec­tive result is mea­sured in web­site rank­ings. Few advi­sors achieve good search engine rank­ings so their web­sites have few viewers.

If you look at web­sites devel­oped by the major firms, it is often dif­fi­cult to find advi­sors on those sites. Other than hav­ing some brand expo­sure on the Inter­net, there is lit­tle value.

By build­ing a cor­po­rate web­site that allows poten­tial clients to find and research advi­sors, you can improve the client acqui­si­tion capa­bil­i­ties of these web­sites. By allow­ing advi­sors to par­tic­i­pate by con­tribut­ing arti­cles as blogs, you not only pro­vide the advi­sor with excel­lent expo­sure but you develop con­tent that improves the rank­ing of the site and improved traffic.

Mar­ket­ing and com­pli­ance can more eas­ily mon­i­tor con­trib­u­tors and con­tent and insure that posi­tion­ing is in line with cor­po­rate ini­tia­tives. Quar­terly meet­ings, men­tioned above can be a dri­ver for devel­op­ment of content.

This ini­tia­tive alone can sig­nif­i­cantly redi­rect advi­sor resources, such as time and money, into more pro­duc­tive initiatives.

Another major com­plaint I hear from advi­sors is the dif­fi­culty to have mar­ket­ing mate­r­ial approved by com­pli­ance. The 80/20 rule sug­gests that 80% of advi­sors may uti­lized a cen­tral­ized mar­ket­ing plat­form but 20% will be out­liers and want to do their own. Suc­cess of the above ini­tia­tives will reduce the vol­ume of work to be processed by com­pli­ance. Com­pli­ance needs to be less con­fronta­tional and more sup­port­ive to improve the cul­ture of an orga­ni­za­tion and reduced vol­ume may allow them to improve.

To develop a more stan­dard­ized plat­form, such as CRM, that will gain advi­sor accep­tance, firms need to work closely with advi­sors to iden­tify solu­tions that pro­duce the best results. There are a broad range of prod­ucts and ser­vices avail­able which are sim­ply pieces to the puz­zle. Efforts need to be made to inte­grate solu­tions that cur­rently exist rather than cre­at­ing pro­pri­etary sys­tems. Cloud solu­tions are grow­ing in num­bers and make this task much sim­pler to accomplish.

I have been study­ing advi­sors for the past four­teen years and the above is based on this research and expe­ri­ence. These ideas pro­vide a plat­form on which addi­tional ini­tia­tives may be based.

Bob Simp­son is Pres­i­dent of Syn­chronic­ity Per­for­mance Con­sul­tants of Mis­sis­sauga, Ontario. He has pro­vided coach­ing and con­sult­ing ser­vices to advi­sors since 1998. Prior to found­ing Syn­chronic­ity, he was Senior Vice Pres­i­dent National Sales Devel­op­ment at Mid­land Wal­wyn Cap­i­tal Inc. and a top pro­ducer at Nes­bitt Thom­son, where he was a top 12 advi­sor with a book of $120 mil­lion in client assets.

Bob Simp­son

Direct Line:  905−502−0100

Toll Free:      866−646−6002

E-mail:  bob.simpson@synchronicity.ca

Text Mes­sage:  905−502−0100

Web­site:  www​.syn​chronic​ity​.ca

Join our Advi­sor Col­lab­o­ra­tion Dis­cus­sion Group on LinkedIn:  Join Advi­sor Collaboration

Bio:            www​.syn​chronic​ity​.ca/​a​b​out

About Bob Simpson

Syn­chronic­ity Per­for­mance Con­sult­ing has been coach­ing finan­cial advi­sors since 1998.

Bob Simp­son, pres­i­dent and founder of Syn­chronic­ity has been involved, directly or indi­rectly in the finan­cial ser­vices indus­try since 1981. He has been a very suc­cess­ful finan­cial advi­sor with Nes­bitt Thom­son Inc., a major Cana­dian finan­cial insti­tu­tion. Between 1981 and 1989, he built a busi­ness with more than $120 mil­lion in assets under man­age­ment, was branch man­ager and SVP National Sales for Mid­land Wal­wyn and has been coach­ing finan­cial advi­sors since 1998.

You can fol­low Bob Simp­son via:

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Tags: Branch Managers, Brand Awareness, Brand Loyalty, Centers Of Influence, Client Business, Client Relationships, Comfort Zone, Community Leaders, Competitive Advantage, Financial Services Firms, Financial Services Industry, Firm Performance, Fuel Growth, Happiness, Mature Businesses, Patient Group, Personal Networks, Shareholder Value, Telling Your Story, Term Success
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5 Questions to Answer in Developing your Strategy

Tuesday, May 22nd, 2012

by Norm Trainor, The Covenant Group

1. What is your Busi­ness Model?

Great com­pa­nies describe the essence of what makes them unique in a sim­ple and com­pelling man­ner. For Wal­mart, it is low­est price. Wal­mart rev­o­lu­tion­ized retail­ing by focus­ing upon oper­a­tional excel­lence. The firm does a bet­ter job of sup­ply chain man­age­ment than any com­pany in its space. As a con­se­quence, they are able to ruth­lessly drive down costs and offer lower prices. Four Sea­sons dif­fer­en­ti­ates itself through the qual­ity of ser­vice. Isadore Sharp explained how Four Sea­sons can charge twice the room rate of Hilton or Westin by say­ing: “It is because we do com­mon things uncom­monly well.”

The level of response of great lead­ers in defin­ing the Busi­ness Model is trans­for­ma­tional. The intent is not to com­pete with the exist­ing play­ers, but to make them irrelevant.

Your per­for­mance mea­sures in devel­op­ing your Busi­ness Model are busi­ness via­bil­ity, share­holder wealth and return on cap­i­tal. The time­frame is 10 years or more.

Tra­di­tion­ally, finan­cial advi­sory firms mea­sure suc­cess based upon com­mis­sion earned and assets under man­age­ment {AUM}. The real mea­sure is prof­itabil­ity or earn­ings before inter­est, taxes, depre­ci­a­tion and amor­ti­za­tion {EBITDA}.

Keep in mind that Strat­egy is the align­ment of the out­puts or objec­tives you want to achieve, the sys­tems and capa­bil­i­ties you have to real­ize your objec­tives and the oppor­tu­ni­ties and chal­lenges the envi­ron­ment pro­vides. Your chal­lenge as a leader is to fig­ure out the strat­egy required to max­i­mize share­holder value and return on your cap­i­tal and time invested.

2. What are your prod­ucts, ser­vices, mar­kets and ideas?

One of the ways in which you can pos­i­tively impact EBITDA is through prod­uct and ser­vice mix. As we have dis­cussed, there is sig­nif­i­cant poten­tial for increased prof­itabil­ity of the client rela­tion­ship through the sale of insur­ance prod­ucts, the offer­ing of fee based plan­ning in the areas of finan­cial, estate, tax and busi­ness suc­ces­sion plan­ning and a focus on the whole fam­ily wealth continuum.

This requires a bal­anc­ing of inte­gra­tion and return on cap­i­tal. Rather than mea­sure suc­cess based upon com­mis­sions or asset man­age­ment fees, the key is to mea­sure the over­all prof­itabil­ity of each client rela­tion­ship life­time. The oppor­tu­nity and chal­lenge is to build clients for life.

3. What are your sys­tems and processes?

Great busi­nesses are built upon replic­a­ble processes. A process is a pat­tern or method­ol­ogy that is repeat­able, dis­tin­guish­able and transferable.

A typ­i­cal Star­bucks loca­tion gen­er­ates ten times more rev­enue than an owner oper­ated cafe across the street. The dif­fer­ence in rev­enue is a bi-product of the effec­tive­ness and effi­ciency of the sys­tems and processes Star­bucks instills in each of its oper­a­tions. It is not about the peo­ple who work in Star­bucks ver­sus the employ­ees of the owner oper­ated busi­ness; it is about the sys­tems and processes.

One of your chal­lenges is to imple­ment sys­tems and processes that are repeat­able, dis­tin­guish­able and trans­fer­able. Finan­cial ser­vices train­ing can help you develop, expand and enhance the sys­tem capa­bil­i­ties of your firm.

4. How do you assure qual­ity and con­tin­u­ous improvement?

Great lead­ers instill in those around them the belief that every­one has a stake in the busi­ness get­ting bet­ter. Apple is a clas­sic exam­ple of the relent­less focus upon improv­ing every aspect of the prod­uct and the user expe­ri­ence. Effec­tive­ness is doing the right things. Effi­ciency is doing things right. Your sys­tems and processes ensure that peo­ple are doing the right things. Super­vi­sion and man­age­ment ensures that peo­ple do things right.

5. What is Ser­vice Excellence?

The para­dox of Ser­vice Excel­lence is that the answer begins with your answers to each of the first four ques­tions. Sat­is­fac­tion is the ratio of expe­ri­ence to expec­ta­tion. Doing com­mon things uncom­monly well requires a com­mit­ment to excel­lence on the part of every employee. It also involves the recog­ni­tion that what is value added today will be expected tomorrow.

Con­tin­u­ous improve­ment is a fun­da­men­tal under­pin­ning of excel­lence. The prin­ci­ple of cre­ative destruc­tion does apply. As a leader, you are con­stantly con­fronting the sense of enti­tle­ment that comes with suc­cess. Enti­tle­ment is an illu­sion. Yet, it is a nat­ural bi-product of success.

We believe that we have earned the right to client loy­alty and to high fees. Peo­ple are grate­ful, but only for a short time. Then, they want to know what we are going to do for them going forward.

Great lead­ers con­tin­u­ously chal­lenge peo­ple to be bet­ter at what they do, to con­tin­u­ously learn and grow. As a result, they bring out the best in peo­ple who are com­mit­ted to grow and make it uncom­fort­able for peo­ple who do not share the val­ues of excellence.

Great lead­ers also ele­vate the level of the con­ver­sa­tion. They edu­cate those around them with regard to the firm’s busi­ness model, prod­ucts, ser­vices, mar­kets and ideas, the sys­tems and processes that dif­fer­en­ti­ate the way in which they do busi­ness and the relent­less focus upon qual­ity and con­tin­u­ous improve­ment. These are the ele­ments that lead to Ser­vice Excel­lence. Lead­er­ship train­ing facil­i­tates a cul­ture of ongo­ing feed­back that informs every­one with regard to the stan­dards of ser­vice excel­lence and their contribution.

Sum­mary:

In answer­ing the above ques­tions, start by describ­ing your Busi­ness Model i.e. how you will assure the via­bil­ity of your busi­ness, the return on your time and cap­i­tal invested and the cre­ation of share­holder wealth. This will nat­u­rally lead to an explo­ration of the prod­ucts and ser­vices you offer, the mar­kets you serve and the ideas that dif­fer­en­ti­ate your busi­ness. It will require you to think about the sys­tems and processes required to serve your clients and attract new clients. Ulti­mately, you will evolve a pic­ture of Ser­vice Excel­lence and what is required to be effec­tive and effi­cient in deliv­er­ing this level of ser­vice to your clients. The Covenant Group is here to help in estab­lish­ing effec­tive sys­tems and processes.

Fol­low The Covenant Group

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Tags: Assets Under Management, Business Model, Business Viability, Client Relationship, Covenant Group, Depreciation, Financial Advisory Firms, Great Leaders, Insurance Products, Isadore Sharp, Measure Success, Norm Trainor, Operational Excellence, Performance Measures, Quality Of Service, Return On Capital, Shareholder Value, Shareholder Wealth, Supply Chain Management, Walmart
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