As a kid, I always wanted to be bigger.
Grownups could stay up late, didn’t have to go to school, could do what they wanted and had money to buy whatever they wanted.
Little did I know my life as a kid was privileged, safe, happy and secure.
I also didn’t appreciate that bigger isn’t always better.
SETBACK
During a recent consulting job, Lisa, the founder, was floating the idea of creating a mortgage brokering business within her advice firm.
The firm had just scrapped through a difficult two years demerging from a painful union with a small accounting firm.
That merger also began as an ‘obvious opportunity’.
Similar to this new one.
Her firm has referred to an external mortgage broker who has provided excellent service for years.
Lisa, however, saw the growing flow of mortgage brokering revenue as her ‘lost’ revenue.
She also believes that as Sydney housing prices continue to rise, the size of loans will increase, making commissions even more lucrative.
There was an obvious ‘low-hanging fruit’ opportunity to grow revenues that would more than compensate for the failed accounting union.
What could go wrong?
EASY GROWTH?
Making plans is exciting and easy. But growth is the opposite.
Setbacks are to be expected.
Implementing the changes required to achieve growth is a grind as it constantly demands more attention from those with already overloaded schedules.
During significant growth, commitment to change will be tested to breaking points, usually well beyond perceived points of no return for many involved.
If the reasons for change are weak on commitment and driven by impatience or boredom with tried-and-true growth, the consequences of change efforts can be more dangerous than those of the status quo.
Lisa had good reason to be confident of her mortgage brokering idea.
She has consistent success with solid referrals from several quality alliances.
One thing was clear—the failure of her accounting merger, the time wasted, and the stress caused were experiences she never wanted again.
After an uplifting off-shore conference with similar firms implementing mortgage brokering, she had the catalyst, plan and confidence for her next venture.
She had found her ‘easier’ growth path.
Or had she?
WHY?
Growth has many reasons.
Some good.
Some bad.
However, growth without strong enduring reasons may be enough to transform a performing business into a basket case.
Growth efforts ignited by reasons such as “I’m getting bored”, “I need a change”, or “I want to play bigger” are as prudent as driving a race car without a seat belt – i.e. few survive the inevitable crashes.
Delving into Lisa’s reasons highlighted that much of her growth was driven by what others perceived of her.
She placed a lot of credence on status, a strong theme at her recent conference, where awards were the highlight of gala night proceedings.
Unfortunately, it is a common trait in financial services.
This has plagued the industry for years, evidenced by the distracting homage paid to the most significant fund, biggest dealer group, fastest-growing aggregator, or latest IPO rock star.
For growth’s sake, the financial services industry tends to inculcate a ‘beauty parade’ paradigm that success is primarily based upon size and external recognition, i.e. prestige and status.
Whenever one’s success is judged by third parties, with awards or recognitions built more for retention than recognition, success will, at best, be fleeting.
Ironically, most advisers become advisers to help others achieve more.
They start their professional lives to enhance the success in the financial lives of their clients.
However, for some, like Lisa, as they increasingly demonstrate how valuable they are for their clients, the allure of future growth is too often skewed by a status lens reflecting a ‘bigger is better’ path.
Don’t get me wrong, credentials, recognising and celebrating progress and rewards are crucial.
I’m all for growth.
I’ve made my career based on advising firms on growth issues.
However, growth is a consequence of focus and commitment.
The focus is the profitable serving of the best interests of clients and teams consistently and methodically.
Growth is tough, as Lisa’s last two years show.
But judging success based on what others perceive about your growth is even tougher.
Bigger isn’t always better.
Better is better.
What do you reckon?
Photo credit: Shutterstock_1478178614
ABOUT JIM STACKPOOL
Since 1989, Jim has influenced, coached, and consulted financial advice and accounting firms across Australia. His training firm, Certainty Advice Group, skills comprehensive advisory teams to price and deliver valuable, methodical, non-person-dependent advice relationships with their clients. He has built a collaborative community of firms aligned to his firm’s comprehensive advice model – Certainty Advice – Australia’s only Certification Mark accredited by ACCC and IP Australia for impartial financial advice. He presents at conferences, has judged professional advice awards, written industry white papers, chaired practice management curriculum for tertiary institutions, and authored four books on financial advice – his latest being What Price Value.