Many firm owners do not have an effective human capital strategy that enables them to become a high-growth company. Hiring the right people means understanding that you may occasionally hire the wrong person or have the wrong people in place. To grow a company, owners need to make purposeful decisions to move on from the wrong hires and create a growth mindset with your employees.
A financial advisory firm is a professional services business that relies on its ability to attract and train human beings to become trusted financial advisors to individuals and corporations making serious financial decisions. Owners sometimes lack awareness that to grow their business, the capabilities of their employees also need to grow.
It starts with what you expect from your people and how you communicate it. High-growth firms push their people to better themselves and ask them to consistently outperform their past performance. These individuals are given tools for improvement, and opportunities for growth that are appropriate for their abilities, which give them excitement about their future. By providing these opportunities, especially to junior employees, senior-level advisors are freed up to focus more on business development and client relationships. Ultimately, this creates better sales training and development for your people, and improves employee retention. A high-growth firm has a culture where hard work, risk-taking, creativity and learning are encouraged and rewarded in a strategic and intentional way.
In contrast, low-growth firms allow their people to become stagnant. These individuals are not growing their skillsets at a competitive pace and as a result, their personal compensation often is, in real terms, flat. This is true of advisors, service personnel, support personnel and most glaringly, the executives and owners. Low-growth firms may create a culture of “rent seeking” where employees and owners are concerned primarily with protecting what they have and are fearful of upsetting the apple cart.
7 Steps To Develop a Growth Culture With Your Employees
What are the best high-growth firms doing with their employees that is different? How does an owner transition from running a stagnant firm to a high-growth firm? Here are some recommended steps based on what many of the fastest growing firms in the wealth management industry are doing.
- It starts at the top. Cultivating a growth culture means creating an environment that offers opportunities to employees and rewards success – continuously. This doesn’t happen unless leadership purposely drives this mindset.
- Employees need clearly communicated career paths with milestones to mark progress and feedback to keep them on track.
- Long tenure, stagnant employees, are not an asset. Set new hire targets each year based on revenue growth goals.
- Don’t just look for experienced hires. Put effort into growing people by hiring entry level employees and providing a career path that will allow them to move into high-level service or sales roles as they grow.
- Put in place development plans with goals that have a meaningful impact on the business and each individual’s compensation.
- Create structure that allows the top performers to purchase equity in the firm. The shift from employee to owner can be transformative to both the employee and to the firm.
- Employees at your firm should be considered “best-in-class” by competitors. A high-growth firm is comfortable with losing some employees to competitors because they have the ability to retain many of the best ones and grow new ones. It will also create tentacles throughout the marketplace by maintaining professional relationships with former employees.
The growth mindset toward employees requires owners to be open to new strategies and to taking risks. Owners who stress endlessly about every failed hire, rather than focusing on building a system of consistently hiring and growing people, may find themselves hoarding their acorns rather than harvesting a new crop.
If you think you are ready to start the conversation about exploring strategic partnerships or would like to learn more about how MarshBerry can help you drive value for your business, please email or call John Orsini, Director, at 440.220.4116.
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MarshBerry is a leading sell side advisor in the financial services industry with specialty practices in insurance and wealth management. Our advisory and consulting practices support advisors throughout their business lifecycles and include sell-side advisory, perpetuation planning, equity and debt capital raises, business and strategic planning, valuations, and industry benchmarking. Learn more about MarshBerry’s Wealth Advisory services.