Best practice suggests the face-to-face time of advisers, including those who are working owners, should be up near the 60 per cent mark. How do you fair? Is there ever enough time in your working day? Are you spending enough time on building relationships with potential clients and strategic alliance partners? If you answered these questions negatively then chances are you need to think differently not only about how you prioritise your day, but how your team is structured.
Strategic Consulting and Training’s recent Dashboard research shows more profitable firms are more likely to have a practice manager. On average only 38 per cent of businesses have a practice manager, compared to 57 per cent of high-profit businesses. Why is this so? It is because practice managers manage the day-to-day running of not just the office, but the business and its teams, delivering improvements in business processes and efficiency. This leaves the working owners and other advisers free to develop and maintain client relationships.
But while a practice manager has traditionally developed the business’ operations and processes across teams, ensuring that the business can efficiently and profitably deliver the client proposition and achieve targets, we believe the effectiveness of the practice manager’s role is even more greatly enhanced where the structure under which they are employed brings about good corporate governance. According to the Bosch Committee report “Corporate Practices and Conduct”: “The essence of good corporate governance is to allow the board and management the freedom to drive their organisation forward but to exercise that freedom within a framework of effective accountability.” That freedom to drive the organisation is vital and for that reason there’s a need to take the role of the practice manager to another level, that of a chief operating officer (COO).
In the following organisational structure, both the operations and revenue generating teams (including a working owner with their adviser hat on) report to the COO. The COO then reports to the board/owners, including you with your owner hat on, and potentially your board of advice, on the implementation of its strategic initiatives across the entire business. There’s a separation between the strategic/supervisory role of the board/owners and the operational/managerial role of the COO. While business owners provide leadership and set the strategy and vision, a COO is responsible for driving the achievement of that strategy and vision.
One business that has been very deliberate about this delineation of roles is Woodbury Financial Services. Errol Woodbury, who is a participant in our Cultivating Advice Roundtable, has recently employed a COO with broad management experience gained from a range of industries, including financial services and retail. Previous practice managers in the business were very good operationally in terms of staff management, office tasks and administration, but Woodbury recognised the need for another layer of responsibility with a broader scope. According to Woodbury, “a COO places greater emphasis on business execution and is not only responsible for input into strategic planning (above the line), but is wholly responsible for strategic execution (below the line)”.
“Great businesses stand or fall on execution and the COO’s role is to facilitate this,” he says. Pivotal to the COO’s ability to drive strategy and execute it is that they have a mandate to ‘take control’, holding the teams (which can include a working owner) accountable to the achievement of the business objectives. For a working owner this can initially be a challenge, for though they will ultimately remain in charge, they are relinquishing the responsibility. It hasn’t been hard for Woodbury to delineate roles because “I don’t enjoy it and so it’s not a challenge”. “For us it’s a matter of what is the best pay-off for the business and what we do best as advisers,” he says. Woodbury sees this all as part of “the new evolution in the industry from the cottage-based practice to a corporatised model which attracts good people from all industries to bring in fresh ideas”.
So assuming the organisational structure and the board’s mandate supports and facilitates this relinquishment of that responsibility, and there is: an alignment in expectations re the COO’s role (instinctive profiling can help here); and a link between the COO’s performance and personal reward (the setting of key performance Indicators is vital); then the COO will have every motivation to achieve, driving any change that is necessary and empowering the team. So, think like a business owner. Optimise the structure of your team so they can spend time doing what they’re good at, empowering them to achieve the vision for the business.
