Five years ago, Mark, a Canberra-based adviser, transformed his proposition and pricing.
He doubled his average client fees from $6,500 to $13,500.
He didn’t do this by engaging more of a high-net-worth market.
His niche is mums and dads running their own small businesses.
He has clients who own earth-moving firms, plumbers, a well-known food franchise chain, a welding firm, a group of farmers on the Monaro range, and a couple of dog breeders.
Thanks to a steady stream of new referrals from satisfied clients, he grew his revenue to just over $125,000 per month.
A significant achievement for a solo adviser practice.
THEN HE HIT THE WALL
Done well, delivering an impartial and comprehensive value proposition brings success. But also creates demands.
Mark needed a new priority: hire a senior adviser.
Hiring senior team members is more about maximising the investment from the role rather than minimising the costs of the role. Unfortunately, though, I’ve never met a growing small business that can ever afford the talent, particularly senior roles, needed for growth.
A recruiter helped Mark appoint a senior adviser with ten years of experience.
The guy was from a major advice institution, with strong technical skills, and keen to join a tight boutique advice team and for the opportunities of longer-term equity.
Mark and his team invested heavily in the guy over twelve months.
Then he left.
A combination of a gobsmacking remuneration package from an institutional group and the guy’s continued inability to blend into the agility of Mark’s small boutique was, I believe, the two main reasons.
THE SECOND HIRE
Mark tried again with a completely different profile: a senior adviser from a mid-tier accounting firm with accounting qualifications.
She was looking for a position closer to home, with less office politics, and more flexibility for her three kids in their final years of high school.
Having invested $150,000 plus in the last role with little to show for it, Mark was far more diligent and determined to make the decision and role work.
Being a single mum, Mark accommodated to her home demands.
After six months, Mark’s loyal long-serving team members were in revolt.
So many accommodations were being made for the new senior role that everyone felt her needs were being prioritised over the team’s business plan and everyone else’s.
She left.
MARK WAS DEVASTATED
The confidence Mark had gained from successfully transforming his proposition two years prior was replaced with frustration.
The hopes he had for where his firm would be by now and where it is could not be more different. Failing twice to transform his firm, Mark, unfortunately, believes he has done something wrong.
He’s spent considerable time, money, and effort developing two senior team members over eighteen months, with no returns, increased dependency, and no clear forward options.
WHAT WENT WRONG?
Mistake #1: Hiring for technical skills over team skills
Both hires focused on technical skills over team skills.
This is common for any role, particularly for seniors.
Lacking any formal regard for the emotional intelligence required in potential candidates to identify, manage and deliver a team-based proposition built upon a deep understanding and connection to what clients value was a mistake.
Both candidates had skills with superannuation, investment, tax, and insurance.
But they found it difficult to identify, manage, or engage with what Mark’s clients valued and how Mark’s agile team delivered their advice.
There was a bigger problem.
Mistake #2: Mark dominated every Discovery Meeting
Mark could not stop performing the expert role in his client meetings.
He dominated the first chair role.
Whenever the new hires tried to lead meetings, Mark would interrupt and take control.
Mark’s intent was to demonstrate how he expected seniors to lead meetings.
The unspoken expectation, however, was that the new hires would be ready to perform in a similar manner.
This is an impossible expectation for anyone new to meet.
Thus, it was easier to maintain the status quo with Mark dominating meetings.
Good discovery meetings come from experience.
But experience comes from poor discovery meetings.
The new seniors had little opportunity to either succeed or fail on their own.
But this wasn’t Mark’s biggest mistake.
Mistake #3: Mark’s biggest mistake – Believing he has failed.
Mark did adjust aspects of the team’s practices to accommodate the senior hires.
- 8:30 am team huddles, which were daily, became bi-weekly, often weekly.
- The agreed performance milestones, both during probation and afterwards, for the new roles, lacked urgency.
- Aspects of team communication and working conditions did compromise the trusted and respectful culture.
His loyal support team members viewed Mark’s accommodation as pandering to the new personalities they believed were not a good fit.
But this is normal.
This is what working ‘ON’ the business is all about.
Expecting ‘to get it right’ every time, even every second time, when growing a business with a complicated number of moving parts, is unrealistic.
THE PATTERN
Though Mark’s frustration is real, his experience path is the common, complex reality of growing advice teams.
No one, not even the founder, is bigger than the culture and values of a growing advice team.
Yes, letting go of control of crucial meetings is essential if team members are ever to learn new skills. So too is weeding out cultural misfits as soon as possible, preferably during probation, as is adopting hiring approaches that do not just emphasise technical skills.
But Mark and his team forgot how many knock-backs they had when he first implemented his new proposition and fees approach.
Building teams is no different.
In fact, it is harder.
You won’t get the first hire right.
Possibly not the second either.
That’s expected.
Change doesn’t turn up wrapped like a Christmas present.
It’s hard.
The difference:
Working ON your firm is less about getting the time to build the systems and procedures to grow it and more about enduring the unexpected challenges of change.
Working ON your firm means turning the frustrating, unexpected, but inevitable failures into learning opportunities to adjust the approach without compromising your values.
THE REAL PROBLEM
Mark had endured and prevailed through the challenges of changing his pricing and his proposition.
As his business approaches $1.5m in revenue, the perceived stakes are rising.
The perceived eighteen months of wasted efforts, of approximately $220,000 in hard costs spent on both senior roles, the hours of work by every team member to support the roles, the perception that clients will react badly to being introduced to yet another new senior, making acceptance of her or his role even harder than the last two failures.
Mark’s real danger is losing faith in his objective of growing a significant, profitable, and valuable firm.
If the next three attempts to hire for a senior role also fail, that is not normal, and something unidentified could be going on.
If he believes that his reality is not to have a senior role as his revenue grows to $1.5m, he is destined for not just his status quo, but worse, as he won’t have the capacity to juggle workloads, new juniors needing his time, existing team members and growing expectations from every new and existing client.
WHERE MARK IS NOW
Mark is still reflecting on his attempts at hiring a senior.
He has hired an associate adviser.
He still aims to build a valuable firm, and his immediate priorities are to improve his tech, explore AI, and potentially expand with more offshore resources.
He is still too busy.
Still responsible for all the client work.
Still repeating the same pattern.
Still with more opportunities than he can handle.
WHERE ARE YOU?
If you’ve successfully raised your fees but still can’t scale beyond your role, you’re possibly at a similar crossroad to Mark.
You’ve proven you can charge premium fees.
Now the question is: can you build a business model that delivers the value your clients pay you for, without you?
It requires skills beyond being a great adviser.
It requires:
- Hiring for culture and team ability, not just technical credentials
- Letting new team members fail and succeed on their own
- Holding firm on cultural standards even when the consequences are uncomfortable
- Accepting that as the stakes inevitably grow, working ON the business, failing often gets harder as business outcomes become more crucial
- Not losing sight of the ‘bigger picture’ where failure is normal, maintaining the status quo can be more dangerous than expected, and trusting your planning (not just your plan) is vital.
This is exactly what we help firms build in the Certainty Advice program – the frameworks for hiring, developing, and retaining team members who can deliver value without the founder in the room.
Comment below and tell me where you are on your journey.
Jim
PS – The firms getting this right aren’t avoiding failures. They’re failing faster, learning quicker, and sticking to what matters: culture, team skills, their ‘bigger picture’ and letting go of their expert dependency.
Photo Credit: Copyright (c) 2019 De Visu/Shutterstock.