Читать книгу G2: Building the Next Generation - Palaveev Philip - Страница 12
CHAPTER 1
Who Are G2s?
G2s Need to Take Over Client Relationships
ОглавлениеEverything in professional services, and particularly in personal financial advice, begins with being able to impress clients and earn their trust. That trusted relationship is the building block of a professional career. Trust translates into growth through referrals. Trust allows a professional to build and maintain a team. Trust facilitates the ability of a professional to establish himself as a manager and leader internally. If G2 professionals can't earn the trust of their clients, they can't progress past the second‐tier position in their firms.
As obvious as this sequence may be, many professional careers stop at the second chair because firms are not giving young advisors enough opportunities to step forward and earn the trust and respect of clients. Firms heavily prioritize client retention and are unwilling to risk changing the lead advisor on a relationship. This stunts the development of younger advisors, who seem to always be supporting but never leading.
At some point, a firm must realize that the career of a talented professional is much more important to the future of the firm than the relationship with any single client. A good professional will typically manage $1 million or more in revenue, lead a team, and contribute to growth. Very few clients can have the same impact. This is not to suggest that firms should sacrifice client service or experiment on clients. It simply means that firms should systematically give their best G2 people the chance to shine in front of clients. It also means that firms should prepare clients for these coming changes so that they are supportive and encouraging of the process.
G2s Need to Become Better Business Developers
Business development (i.e., sales) is the Achilles' heel of independent advisory firms. Built on a foundation of client service and retention, firms are often concerned that a sales focus will undermine the culture of the firm and focus professionals on the wrong agenda. Giving in to these fears results in a firm that is overdependent on the founders or a few select rainmakers. Younger professionals in these firms never receive training in business development and are often quickly labeled as “not entrepreneurial.” In the 2016 Financial Performance Study, only 25 percent of firms report that they provide any business development training to their professionals.
As with most of the challenges faced by G2s, often all that is needed to overcome the obstacle is some training, some encouragement, and some patience. Behind the success story of every good business developer is usually a patient mentor who helped frame sales in the right way: meeting needs and creating solutions rather than pushing unnecessary and unwanted products. Mentors serve as an example and explicitly or implicitly provide young professionals with a process for identifying needs and communicating solutions.
G2 professionals are usually the victims of this cultural dysfunction: They are trained to focus only on service and stay away from sales, and then they are blamed for not contributing to growth. Every professional can learn to be a competent business developer. Firms simply need to incorporate growth into their values, provide the training, and coach patiently.
G2s Need to Learn to Manage People
There was a dark saying in my first firm that “for every new manager we promote, we lose one analyst” (i.e., an entry‐level employee supervised by the new manager). Unfortunately, there was a lot of truth to that. The same phenomenon occurs in advisory firms. As young professionals advance in the early stages of their careers, they usually do so on the strength of their knowledge and professional experience. Then, suddenly, the moment arrives when they begin to manage other people and become responsible for the performance of others. This first experience can be uncomfortable and shocking. For many, it ends in disappointment and the determination to never manage again. Some professionals also get labeled as difficult to work with, when all they needed was more experience and guidance on how to manage.
Lee Iacocca, the former CEO of Chrysler, put it best: “A major reason capable people fail to advance is that they don't work well with their colleagues.”6 Managing people effectively requires a change of mentality and a skillset that is rarely included in professional programs. Even if someone has the theoretical knowledge of management, the practical reality is something else entirely. Behavior is often unpredictable, and theory can be limited in its application to the many situations that occur in real life. Managers need training and experience on how to handle the people on their teams. This experience can only come with time and exposure to situations and people.
Given opportunity and time, most G2 professionals can become competent managers. However, one of the biggest mistakes firms make is to panic at the first sign of trouble and pull their professionals away from management. In fact, while most professional service firms manage service teams from within (i.e., professionals manage other professionals), advisory firms continue to search for some kind of elusive HR department that will deal with management and shelter advisors from having to train and supervise their junior colleagues. This notion is not only naïve (it does not work), but it also damages the careers of all involved. Early management struggles are normal, and G2 professionals need training, guidance, and mentoring on how to be good managers of people.
G2s Need an Ownership and Governance Structure
Advisory firms have very high expectations of their professionals. They expect them to achieve the highest levels of professional expertise, excel at building client relationships, and dedicate the rest of their professional careers to their firms. For this commitment to be mutual, professionals traditionally receive the opportunity to become owners. This financial investment is material but also symbolic. It signifies that the firm highly values the professional, and that the professional agrees that her career and capital will rise and fall with the firm.
Ownership is a necessary part of the strong mutual commitment between a professional and the firm, and firms should not seek to replace it with compensation mechanisms and synthetic technicalities. For ownership in the firm to have meaning and significance, however, firms need to create an ownership structure and governance process that allows G2 professionals to thrive.
The key to a thriving firm is stability. Stability allows the next generation to form expectations and to invest in the long‐term future of their careers and the firm. Governance should be built around a careful balance between executive function in the hands of dedicated managers and the broad representation of the partner group. Clear criteria for professional advancement, including criteria for who becomes an owner, will bring the values of the firm to bear. There is no better way to put values into action than to tie them to the criteria for who is successful in a firm and who benefits financially and career‐wise from the success of the firm.
A firm that combines the training of future managers and business developers with a balanced governance and ownership model will always have a bright future. No matter how much the industry consolidates or how the business models change, the experience of every other professional services industry clearly shows that there is always room for the success and growth of a firm with a dedicated, motivated, and talented team of professionals. That rule especially applies to a firm with a depth of next‐generation talent.
6
Lee Iacocca, An Autobiography (New York: Bantam Books, 1984).