The great news for anybody actually reading this post is that the headline already turned a bunch of your competitors off.
That word “process” is just deadly for so many advisers today that too many won’t have bothered reading beyond the word.
It has become associated simply with compliance, or Best Practice advice.
But smart professionals they know that there is profit in good business processes.
Processes become the IP that underpins the real value of the firm.
The difference between high growth advisory firms and the average ones is made up of many facets, including investment in marketing and management systems, the use of data and analytics, the investment in people in the form of quality of adviser and the ongoing development of them. The differences also includes softer values & beliefs concepts too, such as expectations and performance targets.
When it comes to expectations, high growth advisory firms aim for more, and then put resources into chasing the lofty ambitions than average industry participants. They don’t go for “achievable”. They go for “gee, that’ll be a stretch“.
Once the course for the stars has been set, it is a matter of execution and refinement of the plan. Of course the difference between good plans which flounder, and good plans which fire up, is momentum.
High growth firms maintain momentum: they are continually progressing and moving forward, and largely because when they have found a method that produces consistent or desirable results they then capture it and turn it into “a process”. It becomes “the way we do things here”…
Average advice firms have a tendency to adopt a more ad hoc approach: chasing what seems to be jolly good ideas at the time, with varying levels of enthusiasm, participation and execution from the team. The principles of the firm spend their time herding cats in other words.
Instead of herding cats the high growth advisory firms create and continually refine processes. To stretch the analogy a little further: they capture the cats and then build cat cages. Those cat cages are built out of processes.
BUT…before anyone concludes that a cage – or a process – must be an incredibly constricting and limiting thing, take the analogy to it’s logical conclusion: A wildlife reserve covering millions of acres might be a “cat cage”.
There is scope to build processes that allow fairly high levels of autonomy and self-sufficiency within a firm within particular areas if that is what the firm desires. Regardless of the magnitude, or latitude, of the boundaries which are established by the processes they do introduce a number of benefits to the firm that are directly linked to improved performance and profitability.
The particular merit of processes in terms of building a highly profitable firm are that they:
Create certainty and predictability in key areas within the business. They establish boundaries of behaviour or standards which eliminate indecision and inefficiency, and introduce greater focus on core functions and roles.
Eliminate or vastly reduce service variability. An ongoing weakness of service firms as a rule is the struggle to become homogenous without losing the personal touch that individual clients and advisers alike expect to be a feature of their workplace.
Allow the “wins” to be captured and stored, creating genuine Intellectual property for the firm and its stakeholders. When we find a method which delivers the outcomes that we want to replicate, the “process” becomes our way of ensuring that knowledge is not lost, and that it can actually be successfully replicated. This is especially valuable in sales, marketing, technology and customer care areas for a service business as they are the typical areas of greatest variability in standards and application, yet they are more closely linked to bottom line profitability than (say) best practice advice processes.
To build a high growth firm which enjoys higher than average profitability there is no doubt that one has ton build strong and replicable processes.
There will be some cat-herding in getting there for sure, as someone at some point has to make sure all the wildlife is actually in the wildlife reserve. Once they are however, the wildlife reserve can then get on with it’s core business of protecting an ecosystem.
Similarly, once we have built our processes for running a growing and profitable practice, we can focus more effectively on our core business of helping more clients achieve better financial outcomes.
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