Cul­ti­vat­ing Cul­ture

Why do some firms be­come toxic places to work, while oth­ers nur­ture em­ploy­ees who then per­form at their best?

Financial Planning - - CONTENTS - BY DAVE GRANT

Why do some firms be­come toxic places to work, while oth­ers nur­ture em­ploy­ees who then per­form at their best?

Com­pany cul­tures fas­ci­nate me. Two RIA firms can of­fer the same ser­vices and pro­duce the same rev­enue, but one can be a toxic place to work and the other can nur­ture em­ploy­ees to per­form at their best.

How do th­ese firms dif­fer in es­tab­lish­ing and main­tain­ing their cul­tures?

It starts at the top. All em­ploy­ees look to the lead­ers of the com­pany to es­tab­lish a vi­sion, mis­sion and pat­terns of be­hav­ior. On a more gran­u­lar scale, staffers are con­tin­u­ally eval­u­at­ing how man­agers treat their fel­low col­leagues.

If staff mem­bers see man­agers fre­quently rais­ing their voices, then that same be­hav­ior will be deemed ac­cept­able for meet­ings not in­volv­ing man­age­ment. If man­agers make im­por­tant de­ci­sions with­out en­cour­ag­ing em­ployee in­volve­ment, then em­ployee buy-in might not be as high, ei­ther.

In a pos­i­tive en­vi­ron­ment, sup­port­ive man­agers can pro­pel their teams to achieve sur­pris­ing re­sults.

A Sense of Con­fi­dence

One young ad­vi­sor told me how he was tak­ing over a por­tion of a book that a vet­eran ad­vi­sor was pass­ing down upon his re­tire­ment. This newer ad­vi­sor was in his 20s, but his su­pe­ri­ors en­cour­aged him to work with C-suite ex­ec­u­tives and start man­ag­ing a book of more than $40 mil­lion.

When he re­flected on the tran­si­tion 12 months later, he could not speak highly enough of his se­nior ad­vi­sors and com­pany lead­ers. Be­cause they had in­stilled in him a sense of con­fi­dence, he felt ready for the tran­si­tion and had the skills he needed.

The new ad­vi­sor’s col­leagues had also en­cour­aged him to ask ques­tions when­ever he felt un­sure of any­thing — tech­ni­cal or oth­er­wise.

He worked closely with the com­pany’s founder to main­tain strong client re­la­tion­ships through­out the tran­si­tion and no­ticed how his su­pe­rior had the ut­most care for the client as this change oc­curred. He spoke about how that be­hav­ior now drives him to be a bet­ter ad­vi­sor.

With beam­ing pride, he also shared with me how he was able to keep bring­ing in held-away as­sets and con­vert re­fer­rals from cur­rent clients, en­sur­ing that he wasn’t just a ser­vic­ing ad­vi­sor but could add to the com­pany’s growth.

With­out the sup­port of the com­pany lead­ers, I fear it could have been a dif­fer­ent story.

In con­trast, neg­a­tive cul­tures can leave scars.

Early in my ca­reer, I saw how poor com­mu­ni­ca­tion can ad­versely af­fect cul­ture.

In the early weeks of join­ing an RIA, team mem­bers dis­agreed about how prospects should be on­boarded.

One ad­vi­sor who brought in the ma­jor­ity of the firm’s busi­ness didn’t feel like his views were be­ing taken into con­sid­er­a­tion. So he stood up in front of the en­tire plan­ning team and yelled that he was shut­ting down

Cul­ture needs to be nour­ished through­out its in­fancy, fed to en­sure its growth and main­tained con­stantly to en­sure any weeds don’t take root.

his book and leav­ing.

As a new mem­ber of that team, I was shocked to see this com­pany crum­ple be­fore my eyes.

If an ad­vi­sor doesn’t take care to main­tain or weed client re­la­tion­ships, then ser­vices can be­come su­per­fi­cial.

The next day, how­ever, ev­ery­thing went back to busi­ness as usual. The out­spo­ken team mem­ber was at the of­fice when I ar­rived, as were the rest of the team.

Col­leagues tol­er­ated his out­burst, which, un­for­tu­nately, was not a one-off oc­cur­rence. Not sur­pris­ingly, this ad­vi­sor’s be­hav­ior left col­leagues on edge about what else might oc­cur.

This toxic en­vi­ron­ment spawned other un­pro­duc­tive be­hav­iors: Team mem­bers of­ten had closed-door meet­ings to talk about other staff mem­bers. Cer­tain staff mem­bers would pur­pose­fully not show up for com­pany meet­ings be­cause they didn’t get along with one an­other. Oth­ers would send hot­headed emails that should never have been writ­ten. All of this bad be­hav­ior hap­pened in clear view.

Need­less to say, the toxic cul­ture at this firm re­sulted in bad morale, high staff turnover and an in­con­sis­tent client ex­pe­ri­ence.

Com­mu­ni­ca­tion makes or breaks cul­ture: A for­mer col­league de­scribed re­cently how the cul­ture of his com­pany sud­denly changed when the com­pany ex­e­cuted a suc­ces­sion plan.

A new owner came in to suc­ceed the re­tir­ing owner and the com­mu­ni­ca­tion rules changed overnight. The fam­ily at­mos­phere, in which ev­ery­thing was di­is­cussed as a staff, evap­o­rated,, and it now be­came a top-down “herre’s what we’re doi­ing”” regime.

Staff mem­bers no longer took time to get to know one an­other overr llunch orr ear­rlly-mor­rni­ing cu­bi­icall vi­isi­itts,, afft­terr tthe new owner com­ment­ted how peo­plle werre spendi­ing ttoo much tti­ime away ffr­rom tthei­irr desks..

The new own­err tthoughtt he was maki­ing tthe ffi­irrm morre efff­fi­ici­ientt,, butt iin rre­al­li­itty,, he was er­rodi­ing tthe cullt­turre tthatt had made tthe ffi­irrm suc­cessf­full..

Twellve mont­ths llat­terr,, ttwo key mem­berrs off tthe sup­por­rtt tteam ll­efftt,, ci­it­ti­ing tthe change iin own­errshiip and cullt­turre as tthei­irr maiin rrea­son fforr lleav­i­ing..

Cullt­turre has tto be nour­ri­ished and mai­int­tai­ined:: Cullt­turre iis lli­ike a gar­rden.. Fi­irrstt,, iitt has tto be pllanned mi­indf­ful­lly bef­forre anyt­thi­ing mat­ter­ri­iall can hap­pen..

Then,, iitt needs tto be nour­ri­ished tthrrough­outt iitts iinf­fancy,, ffed tto en­surre iitts gr­rowtth and mai­int­tai­ined con­st­tant­tlly tto en­surre any weeds don’’tt ttake rroott..

Whi­ille ttop man­agerrs arre tthe maiin gr­roundskeep­errs off cor­rpor­ratte cullt­turre,, ev­erry sttaffff mem­berr has a rrolle iin ffeedi­ing wi­illt­ti­ing pllantts..

A good cullt­turre prrai­ises pub­lli­iclly tthose pllantts tthatt arre showi­ing tthei­irr ffr­rui­itt,, en­sur­res new pllantts gett ev­er­ryt­thi­ing tthey need tto gr­row att tthei­irr own pace,, and ei­it­therr rre­moves weeds when tthey ap­pearr orr br­ri­ings iin tthe gr­roundskeep­err when tthe weeds be­come ttoo much tto han­dlle..

Iiff tthe sttaffff iig­nor­res any par­rtt off tthe gar­rden,, iitts gr­rowtth iis sttunt­ted,, weeds ttake overr and,, iin tthe worrstt case,, much of it has to be ripped out and be re­planted.

Cul­ture for solo ad­vi­sors? Pro­mot­ing a pos­i­tive cul­ture is es­sen­tial for com­pa­nies with staff, but what about solo ad­vi­sors? Does cor­po­rate cul­ture even ex­ist when there is just one worker? I think it does, but it is tightly linked to the per­son­al­ity and vi­sion of the ad­vi­sor.

In or­der to un­der­stand the cul­ture of a solo-ad­vi­sor firm, look to his or her clients. They are in the same place as staff mem­bers in a large firm.

The clients com­mu­ni­cate di­rectly with the ad­vi­sor and try to un­der­stand the nu­ances of his or her com­mu­ni­ca­tion style. If the per­son­al­ity and cul­ture of a solo ad­vi­sor res­onates with many clients, and the ad­vi­sor nur­tures those re­la­tion­ships just as man­agers do with larger staffs, the ad­vi­sor will find him­self with many healthy, fruit­ful plan­ning re­la­tion­ships.

But in­stead, if the ad­vi­sor doesn’t main­tain client re­la­tion­ships, ser­vices be­come su­per­fi­cial — or, at worst, trans­ac­tional. A solo ad­vi­sor’s cul­ture then de­pends on how well they cul­ti­vate their client re­la­tion­ships into long-last­ing bonds. Cul­ture is a liv­ing en­tity in­side ev­ery prac­tice, re­gard­less of whether staff is present. When lead­ers tend to their cul­ture with care, it can be­come the lifeblood of a com­pany and en­sure its long-last­ing suc­cess.

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