Process, Process, Process

by David I. Leo

In The E-Myth Revisited Michael Gerber states:

“Because of (a) natural bias, most business owners focus on working in their business when they really should be working on their business. Instead of looking at the business as a one-off operation, the owner should consider the business to be a prototype for a large number of franchises that will be added at a later stage. By adopting that mindset, the business owner will not only participate in the business as a technician but will also act as a manager (putting systems in place and controls) and as an entrepreneur (having a vision of how the business can create sustainable added-value for all key stakeholders)…A business that is built and managed by someone who combines the approach of the technician, the manager and the entrepreneur will have a far greater chance of future success than one guided by someone thinking like a technician alone.”

To me, this is about having processes in place so that as many activities as possible can be preplanned.

How do you accomplish this as a financial advisor? Clients are different in some ways and have unique needs, but that doesn’t mean that every process to service them has to be unique. For example, the questions you ask clients should all be the same or close to the same, such as:

• What are your most important financial concerns?
• What are your most important non-financial concerns and objectives?

To determine a client’s risk tolerance you are generally required to ask the same questions. Whether those questions are valid or not is another question (Footnote 1). There are dozens of questions you need to ask to fully understand your client’s goals, needs, wants, dreams, and even fantasies. The forms Mitch Anthony has developed have hundreds of questions on them, all appropriate to all or most of your clients. You really don’t have to spend additional time developing questions to ask your clients. That’s one small example of how you can save time that can be devoted to business-building activities like meeting with clients and prospects.

Here are my “rules” for creating a process-based practice:

Rule 1:  Make a list of the 20% of tasks that result in 80% of your business and stick to doing those; delegate the rest.  Every day, make it a habit to do the most productive thing you can at every given moment. At the end of each day, write down the six most important things you have to do the next day in order of priority and then follow that list in order (Footnote 2). I also suggest noting what else you work on including non-work related items. In general, the most valuable things you do for your business are client retention/development and business development.  Delegate as much of the rest as possible and stick to what’s on your calendar.

Rule 2:  Simplify your business.  At least 80% of your clients must be serviced via a “cookie cutter” approach. Think about a “common process for uncommon delivery”™ so clients will still feel special (Footnote 3).

An alternative to this would be to have only A-book clients. For the Top 20% of your clients, at least 80% of their needs must also be serviced via a “cookie cutter” approach.  Here are examples of cookie cutters to get you started:

• A standard investment process that includes a set of solutions by asset level, based on managed accounts (so you are delegating security selection); a set of model asset allocations based on risk profiles; and a limited set of investment solutions (managers and funds you vet, offer, and monitor).

•  A standard client service matrix to service 80% of your book and 80% to 98% of the top 20% of your book. The remaining 2% of your top 20% may be one-off situations.

•  A standard basic client loyalty process, which includes a contact strategy by tier; service deliverables strategy by tier; detailed creative discovery to know more about the client than the client; client satisfaction process; and client summary process.

•  Use the 20% of the marketing approaches that provide 80% of the results: introductions from clients; introductions from COIs; networking (or a substitute that has worked better for you).

Rule 3:  You don’t have to accept everyone as clients.  If someone doesn’t fit your business model, you need to ask yourself if you can afford to service them.

Rule 4:  Have a written business plan that you read weekly and grade yourself against.  Be sure your plan includes a vision that lives in your heart; a mission that can live in your client’s heart; smart goals; actionable metrics for which you are held accountable; and a focus on the right actions. Execute your plan.

Rule 5:  Use available tools and technology.  Examples include client knowledge discovery forms like Mitch’s Financial Life Planning tools; contact management software like ACT!; and financial planning tools provided by the organization or standard industry tools.

Rule 6:  Have a “growth mindset”.  Accept that you may fail.  As Dr. Carol Dweck has said, “Lack of success can be considered failure only if we fail to learn something from the experience. Our most significant growth often emerges from disappointment. Do not be afraid of failure. Faced and conquered, it will enable you to become stronger, more focused and sure of yourself, more prepared for the future and protected from the doom of repeating the past…If you have the fixed mindset, you believe that your talents and abilities are set in stone–either you have them or you don’t. You must prove yourself over and over, trying to look smart and talented at all costs. This is the path of stagnation. If you have a growth mindset, however, you know that talents can be developed and that great abilities are built over time. This is the path of opportunity––and success.”(Footnote 4). Ms. Dweck also suggests we can change our mindset at any stage of life to achieve true success and fulfillment.

Rule 7:  Hire a coach and recommend your coach to others.  This is not really a rule, but it would be nice…and I wanted to see if you’ve read this far.

David Leo has been coaching financial advisors for ten years, and has multiple decades of experience working with the financial services industry. Prior to coaching, he was with PaineWebber’s Private Client Group as well as IBM where he held a variety of positions in sales, marketing, management, and business process reengineering consulting serving the financial services industry.

David founded Street Smart Research Group LLC and recently merged his coaching practice with Focus Partners, LLC, a leading practice management and coaching firm (www.focusvpm.com). As a productivity specialist, David brings extensive knowledge of business and sales processes and the application of productivity enhancement tools, techniques and technologies to his clients. In addition to coaching, David facilitates meetings, trains advisors and managers, and provides a variety of financial services consulting. David has an MBA in Management from New York University and an undergraduate degree from Drexel University. Contact David at david@focusvpm.com, or call 212-598-4229.

Footnotes:

1. See Mitch Anthony’s article entitled “Risky Business”

http://www.fa-mag.com/component/content/1899.html?task=view

2. Ron Carson and Steve Sanduski, “Tested in the Trenches”

3. “common process for uncommon delivery”™ is a trademarked term of Street Smart Research Group

4. Carol S. Dweck, Ph.D., Mindset.