The Curse Of The High-Producing Owner
In most advice businesses the Owner/Adviser is the best producer in the organisation. This can be both a blessing and a curse, and creates a degree of owner dependency.
It’s a blessing because all businesses that work have a rainmaker, who is great at finding and developing new client relationships (“selling” in the old parlance). If a business doesn’t have at least one genuine rainmaker, life can be tough.
The curse of the High-Producing Owner comes from a mindset problem; the Owner lamenting the fact that the other salespeople in the organisation can’t do it as well as s/he can. This is not merely egotism either. An owner dependent business with a High Producing Owner often carries the rest of the business financially. Without them the business would probably fail and everyone would be out of a job, which can be quite a load to carry year after year after year. This can sometimes result in the Owner/Adviser putting more and more pressure on the rest of the team to find new clients and generate more new business, but it rarely works and can cause a lot of resentment all round.
So how do you remove owner dependency?
There are two options: acceptance or training & development.
Option 1: Acceptance
You accept your role will always be that of rainmaker and you build a business around you that supports and protects that. The support part is relatively straightforward. Surround yourself with people that do the other stuff while letting you make rain. The protection part is more challenging, but not impossible. If you are going to find all this new business and simply hand it off to other minders within your organisation, you will need to create a well thought out and corporatised relationship management process. That is, the relationship will have to reside with the organisation and several people within it, otherwise you might see some of your minders walking off with all your new clients three years later. It’s wrong, but in time your minders somehow think they are the magic and head off to start their own new business. So create multi-pronged contact points for clients in your servicing process with touches from the:
- client administration team (primarily),
- other advisers (the minders) and
- yourself periodically (even if it is just poking your head into a meeting to say hi).
The touchpoints will need to be clearly structured and actually delivered otherwise this approach won’t work.
Option 2: Training & Development
If you decide that remaining as the rainmaker is not the role you want to play, or that it’s just too high risk for your business, then the alternative is to recruit and train a team of skilled finders. While you might partner up with another rainmaker who is out there doing it on their own, be careful that you both have the same vision for the future. Any split on that vision, no matter how small can be a show-stopper later on. Typically you will have to invest a lot of time, money and effort in developing your own team.
There will need to be two focuses here:
- Training: which most small businesses can talk a good game but rarely deliver due to lack of time, money and effort.
- Equity lock-in: which should be enough to make sure it isn’t worth a minder leaving to set up down the road. An equity lock-in on its own may not be enough, as many staff nowadays also want to be involved, feel appreciated and do meaningful work. You will have to address that in your plans.
What to do?
The point here is that neither option is particularly easy or risk free, but you will have to have a credible strategy and be able to execute it if you want to continue to grow, and reduce or remove the owner dependency.
Any shortcuts here, in time or money, will cost you ten times that in three to five years time, so don’t risk it!
Take some time deciding which path fits your goals and beliefs best and then commit to investing in the people and training that will be required to make sure you execute effectively.