“Measure what can be measured and make measurable what cannot be measured.”
Galileo Galilei, father of the scientific method
“What gets measured gets managed.”
Peter Drucker, professor of strategy, consultant and author
Galileo is best known as the 17th century astronomer who first used the telescope to explore the stars and proved that the Earth revolves around the Sun. He’s also recognized as the father of the scientific method, using systematic observation, measurement and experimentation to advance knowledge.
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Dan Richards
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Fifty years ago, the principles of scientific thought weren’t broadly applied to business. That’s why if you ask top academics in business strategy who did the most to shape the way businesses are run, the landslide winner would be Austrian-born Peter Drucker, who taught and consulted to Fortune 500 CEOs into his 90s before passing away in 2005. In his 39 books and hundreds of articles, Drucker laid the foundation for modern management thinking. Among his many insights is one that is particularly useful to anyone running a business: “What gets measured gets managed.”
Drucker’s observation was that the goals that you set and the activities and outcomes that you and your team track determine the things that actually happen in your business. That notion of monitoring progress against measurable goals applies to almost everything you do:
- Meeting with clients and prospects
- Providing feedback to team members
- Evaluating progress in the past day, week, month and quarter
Meeting with clients
How do you know that a client meeting has gone well? Is it the “thank you” that clients give you and the smiles on their faces when they leave? Is it their agreement to introduce you to a friend or family member? Or is it the enthusiastic agreement to schedule another client review in six months?
Given the importance of portfolio reviews in driving client satisfaction, you should quantify how well a meeting has gone. Here are three ways to do this:
- Debrief after each meeting
After each meeting, go to a file in your laptop labelled ”meeting assessment,” and write down a score out of 10 on how you think the meeting went. Then answer three questions: What went well in the meeting? What could have gone better? How will you improve your next client meeting?
- Track your success against going-in goals
In a previous article, Track Daily Progress to Move Your Business Forward, I described an advisor who began writing down two key goals before each client meeting – one that, if achieved, would make the client better off and the second that would advance the advisor’s agenda. After each meeting, this advisor briefly reviewed his success in achieving those goals, whether the goal was achieved entirely, in part or not at all. Even if you never look at them afterwards, writing down two or three key goals for each client conversation increases the chances of that meeting being productive. But if you create a spreadsheet to monitor your success in achieving meeting goals, the return from client meetings will improve.
- Get feedback from clients
In the past five years, some of today’s most respected marketers have begun using a simple question to measure customer satisfaction:
“From 1 to 10, how likely would the customer be to recommend NAME OF FIRM to a friend or family member?” The answers are used to create something called a net promoter score; among the firms using this question are Amazon, Apple, Charles Schwab, Costco and Intuit.
A growing number of fund companies use this question to measure satisfaction with the advisors with whom they work. Recently, an advisor told me how she’s begun using this question to follow up with clients after meetings. Immediately after meetings, clients get a follow-up email from a marketing consultant who coaches this advisor, asking them to respond with answers to four simple questions:
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- How good a use of time was the meeting for you?
- What one thing could the advisor have done to make the meeting more useful?
- What would you like to talk about at future meetings?
- The net promoter question: “From 1 to 10, how likely would you be to recommend this advisor to a friend or family member?”
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This doesn’t happen after every meeting, but rather takes place after every four meetings or every two years, whichever comes first. You can read more about the net promoter score in my article, How to Measure Customer Loyalty.
The dynamics of prospects meetings makes it difficult to ask people you aren’t working with yet for feedback afterwards. But the first two approaches can be used to track your effectiveness after prospect meetings. By doing a mental debrief and assigning yourself a score after meetings and by tracking progress against pre-determined objectives, the results from meetings with prospects will improve over time.
Giving team members feedback
Just as you should have quantifiably measure your performance, you should have similar measures so that your team knows if they are on track. Some of the metrics that could be used to monitor team performance:
- Number of administrative errors that are within the team’s control
- Number of instances where it took longer than 48 hours to correct an admin mistake
- Client feedback score on events that your team helps organize
- Number of cases where one of your team identifies an opportunity for action in a client portfolio
- Percent of top-50 clients for whom there is complete data in the CRM system
This doesn’t replace qualitative feedback on performance, but will help focus conversations about job performance. For more on giving your team direction, read my article, Feedback That Motivates Your Team.
Assessing the past day and week
My article from last, year, The Hour of Your Day that Matters Most, pointed to new research on the sharp boost in productivity from taking five minutes at the beginning of each day to write down key goals and five minutes at the end of each day to write down what you achieved against those goals and what you learned.
One advisor I spoke to went one step further; at the end of each day, he gave himself a score from 1 to 10 on how effectively he’d achieved the tasks that he’d set out when the day began. Keeping track of this score gave him ongoing feedback on how effective his day had been, leading to steady improvement over time. The same approach could be used as part of Monday morning meetings to evaluate just how productive the past week was and to look for ways to improve in the coming week.
Planning for the period ahead
When setting business goals, it’s understandable to focus on desired outcomes. For existing clients, outcomes could be minimizing client defection, bringing over additional assets currently held with other advisors or accounts opened with heirs for key clients. For new clients, goals could include the quantity of referrals or the number of new clients brought on board with assets above a target threshold.
While outcomes are clearly important in advancing your business, they’re not typically a good measure of daily, weekly, monthly or even quarterly progress. Instead your goals should relate to the activities that will drive success. Typical activity goals could include:
- Number of reviews with clients and meetings with prospects
- Number of conversations with key clients about scheduling a meeting with adult children on inheritance plans and the number of those meetings that take place
- Number of client referrals and the number of meetings with potential referral sources
- Number of articles published in industry magazines that will reach your target community
- Frequency of blog posts, letters, newsletters, articles and other client communication
- Number of workshops and other client events
- Number of prospects who agree to sign on to receive your regular client communication
Once you have quantified your goals, you have a frame of reference against which to monitor your progress. Your activity goals should include tasks that are urgent in the short term as well as activity that is important for the long term; in the words of the late Stephen Covey, we need to take care that the urgent not push out the important.
The big downside to this approach is the effort entailed – it is easier to stick to your current routine. But as Thomas Edison said: “Opportunity is missed by most people because it is dressed in overalls and looks like work.” If you are truly serious about accelerating the growth of your business, the advice from Galileo and Peter Drucker will propel your business forward.
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto, where he teaches a top rated course on Innovation in Financial Services. To see more of his written commentaries, go to www.danrichards.com.
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