Practice Growth Requires Leadership More Than Management
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Practice Growth Requires Leadership More Than Management

March 26, 2024

by Tony Vidler  CFP logo   CLU logo  ChFC logo

The most frequent thing I see that prevents great practice growth and holds advisers back from developing their dream business is a lack of vision.

I don’t mean “vision” in the namby-pamby buzz-word sense of having a beautiful set of words on a plaque on a wall that nobody really cares about.  A clear vision in practical terms means a clear picture in the owners mind of what they want to achieve…what they want their business to look like ….and then to be able to describe it meaningfully to their stakeholders.  Clear vision is an essential ingredient of strong leadership – and it is the lack of clear vision which inhibits the leadership of good practitioners more often than not, because you can’t tell your people what you are aiming for if you haven’t figured out in your own mind to begin with.

Here is an example of the namby-pamby sort of vision that I don’t encourage:

“Our primary purpose as an organization is to deliver high quality financial products both in appearance and content. We will continue to be known as the firm where personal attention will never become obsolete. We want to employ people who are extremely satisfied and who go the extra mile for clients. We want a culture of growth, profitability and enthusiasm throughout the firm.”

We want enthusiasm?  I guess putting it on a plaque will help generate it…

…that is the sort of nonsense that institutions come up with. The reason institutions come up with that nonsense is because it is decision by committee, and the committee is usually made up of people who are risk averse and who wish to keep their roles intact within the institution.  As a result, they come up with nonsense statements which inspire no-one, because they mean nothing, and are designed to do no wrong.

Compare that to this:

“Our vision is simple, but ambitious. We will be the first choice provider of financial advice in XYZ-town, and we will keep doing everything we can to continue earning that right. We will have more local customers choosing us for their financial advice than anyone else.”

This is the sort of thing that comes from an owner who is a leader.

Clear and reasonably concise. The essential vision does not get lost at any point.  There is an indicator of success tied to the vision….so people will know if genuine progress is being achieved.  Finally, there is a framework for decision-making contained within it: “will more customers choose us than anyone else around here if we do XXXX?”

Management on the other hand tells people how they want them to behave, and what values they should demonstrate, and what actions are required with which resources.  There is a need for that, especially in a hierarchal organisation.  Management is fundamentally about the efficient use of resources.  But that isn’t the same thing as  Leadership.

Leadership provides direction….it points the way forward. It should inspire the right behaviours and actions, not dictate specific requirements.

There is no doubt that the growth of a practice requires management at some point. There comes a time when there must be some internal focus on efficiency, and the introduction of leverage in the form of staff freeing up the leaders time in order for the leader to get out and keep leading. The Leadership however needs to be in place first in order for management to excel….

To grow a professional practice beyond a job for the partner, or partners, a clear vision must be established.  The leader’s role is then to keep telling and selling the vision to all the stakeholders, and support the attainment of the vision with sound strategy.

This is the most defining difference between those professional services practices that remain jobs for their owners, and those that grow to become something of substance in their community.

You may also find this post useful:
R.I.P. To The Accepted Wisdom For Growing A Practice
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