Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Readers,
I have the distinct pleasure of teaching five graduate courses this semester on various topics around leadership. In addition, while our firm mostly focuses on growth strategies, lately we have been asked to speak and run workshops on advisors stepping into leadership – moving from the role of successful advisor into leader and CEO.
Most educational and training tracks in our profession don’t teach advisors the core skills necessary to emerge as a leader. In my grad classes, students will often reflect they enjoy what they learn, but they don’t see it applied in the real world! In addition, being in DC last week for client work reminded me of the lack of leadership I see in our elected officials. The inability to collaborate and organize on behalf of constituents is truly shocking. Or maybe, sadly, not so shocking.
All these factors have led me to make this week’s column all about strong leadership. There are theories on conscious leadership, servant leadership, transactional versus transformational leadership and so on. Let’s look at what it means to be a leader and CEO in the advisory space, running an effective team within a larger organization or being the leader of your own RIA.
Here are my seven keys to emerging as a leader:
- Create clarity about where you are going. This includes having a vision for long-term success and short-team goals and outcomes. I often find advisors are comfortable saying where they want to be in five to 10 years with their firm, but what about one year? 18 months from now? Your team needs success “markers” along the way. Human beings are largely goal-oriented, and if your team doesn’t know what they are driving toward, it will make it much more difficult to get there. Important hint: Saying, “We want to double AUM or fees within two years” is not a motivating outcome. Why do you want to double? What will doubling do for the team and the firm other than make the leaders more money? Be sure all the goals you set have both a quantitative (AUM, fees, numbers of clients) and qualitative component. What could be qualitative? Cultural values, quality of life, the team’s willingness to work together. The factors that make people excited to be part of something are rarely related to AUM and fees.
- Align people to roles where they have strengths and can succeed. Instead of focusing just on “get the work done,” how can you find ways to help your team members leverage their strengths and become more confident in what they do? Rather than identifying what needs to be done and asking someone to do it, strong leaders know each team member – their strengths and areas of opportunity. Know what motivates those on your team. Every person is intrinsically motivated, but leaders create an environment where team members become motivated. What will that look like for your team? Create an environment for each person to be their best self.
- Recognize your own strengths and areas needing improvement. I talk about emotional intelligence (EQ) and know how important it is for advisors to leverage EQ in their work with prospects and clients. EQ is a critical area for leaders. The number of stories I have heard about advisors who are abrasive, short-tempered, disengaged entirely, uncommunicative and so on with their staff could fill a book. Advisors are human too. We all have our “triggers” (i.e., reactions to things we don’t like), but true leaders do a couple of important things – they stay self-aware, recognizing when they are stressed, pulled in too many directions, bothered by lack of progress or frustrated by team members. They notice their thoughts and feelings. They self-regulate. This doesn’t mean stuffing your emotional response (that never works) but rather being honest about it and being careful about how you display what you are thinking and feeling. No leader motivates team members by taking emotions out on them. Your team is trying hard to bring about success. If a team member is not doing what’s needed, then leaders move into coaching and feedback, and then, if necessary, performance management.
- Become an excellent coach. Think about the number of quotes from successful sports coaches. Why do we admire the success these leaders have had? They inspire a group of disparate individuals, often replete with huge egos and different skill sets, to work together in a collaborative and organized fashion to win a game and be the best they can be. This is no easy task. It requires understanding each person’s strengths and coaching to them. If someone is clearly an excellent cornerback, you don’t ask them to be a wide receiver unless in doing the job, you recognize they have this skill. A great coach puts people in the right roles and coaches them to be the best they can be – in that role. A great coach points out the things that are working well, and coaches and guides to where the person can improve. Great coaches inspire team members to be their best. They take the time to review “the plays” and show what went well and what could have gone better. They pull the team together to illustrate how all the roles are important and work together. They care about the team and everyone on the team, and they devote the time to raising everyone’s abilities. They bring about collaboration and recognize a team is only as good as the leadership it is operating under. Sound like a lot of work when you have a business to run and you want to grow your AUM and fees? It is. But great leaders take the time because they know the payoff will be there if they do.
- Moving from an advisory role to leadership means giving up the need to be involved in every prospect or client situation and to have your imprint on how the work gets done. It means working with the team to ensure there is a clear process for client experience, segmentation and aligned service standards, sales process and tracking and all the other activities that keep new business flowing and clients engaged and happy. As a leader, make sure these things are in place and put a value on them. But you don’t have to do it all. This is a distinct difference. I often tell senior advisors they need more “process.” Entrepreneurial advisors will chafe at this because they don’t want to be constrained by process. The leader doesn’t invent the process, but they do support the need for it and provide the budget necessary to implement what’s required. Your team can’t function well together without a clear playbook (every successful sports team has one) and leaders make sure the team moves from “everyone does what’s needed” to clarity in roles, responsibilities, tracking, measurement and team engagement.
- Communicate. Communicate. Communicate. Great leaders are great communicators. This doesn’t mean they are great orators. A great leader doesn’t even have to be a good public speaker or an obvious extrovert. There are many quiet leaders who communicate very effectively. For leaders, the best form of communication is to listen. Great leaders want to know what their team members are thinking. They want to know what obstacles they face. They care about what’s happening in the team among team members. Great leaders share insights and ideas, and they confirm their vision and what’s happening in the firm or team on a regular basis. They ensure team members have heard the messages they are giving and know what to do next. Communication is priority one.
- I will end with a quote which underlies the need to focus on enhancing leadership skills for advisors. It’s a fallacy to say someone is a “born leader.” No one is born a leader. Because someone takes charge at a young age, can influence others or has great social skills does not make a great leader. Leaders work on their skills all the time. They acknowledge areas where they need to improve and continually seek feedback and input to get better. To emerge as a great leader takes courage and personal risk. The payoff is well worth it but like most things in life, it isn’t an easy journey. “Leaders aren't born, they are made. They are made by hard effort, which is the price all of us must pay to achieve any goal which is worthwhile.” Vince Lombardi: an American football coach and executive in the National Football League.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022 and 2023. Beverly is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. 