If you’re running a financial planning business that wants to be around for the next decade and more, it’s vital that your leadership team is structured for success. The world is changing and successful businesses will need to adapt.
A Harvard Business Review (HBR) article that I read recently, Reinventing Your Leadership Team, provides some advice on how to do that.
Unfortunately, the need for change often gets simplified into “you need to digitise” and while doing so might well be essential for your future survival, it doesn’t always address the real issue – the need to differentiate what you do from your competitors.
Leaders of the future will need to balance characteristics that can appear paradoxical. A recent survey by Strategy&, PwC’s global consulting arm highlighted 6 of them:
“We used to accept…that leaders could be either great visionaries or great operators. No longer. Companies now need their top people to perform both roles—to be strategic executors, in other words. They’re also expected to be tech-savvy humanists, high-integrity politicians, humble heroes, globally-minded localists, and traditioned innovators.” *
So how do you and your leadership group become effective in this broad range of seemingly paradoxical skills?
The authors recommend an approach with four key components:
1. Identifying the leadership roles needed to transform your company for the future
When you think about where your business needs to head in the coming decade, what knowledge and skills are going to be essential for your success?
Can you shape the makeup of your leadership group to assist in the transition you’re looking to make?
It might mean assembling a board that you can stack with 3 or 4 experts in areas where you feel you will need new expertise.
“Apple’s creation of the chief design officer position in 2015,… signalled to the organization (and, in fact, the world) that design has huge importance for the company. [It helped Apple] attract the world’s best designers, from the fashion industry and elsewhere…” *
The more alignment you can create between the roles and skills in your leadership group and the business outcomes you’re looking to achieve the better.
2. Assembling the right people
Once you’re clear on the roles and expertise you are after, then it’s about finding the right people.
Do you have some clients that work in areas you’d like to know more about? Would they join your board, or come in and lead a specific project for you part-time?
Does your accountant know other business owners with unique expertise who might be willing to contribute their knowledge and expertise in some way?
The goal is to “generate new ideas, challenge traditional thinking, and collaborate on meaningful change…” *
I recommend Matthew Syed’s book Rebel Ideas if you’re looking to understand genuine diversity of thinking, rather than tick-box diversity.
3. Focusing your leadership team on driving the company’s transformation
One of the biggest challenges for any leader is actually spending time and energy on the big priorities. What are the big dominoes you’ll need to knock over if you’re going to achieve the business transformation that you envisage?
Most business owners I speak to are too busy reacting to the demands of their business, they’re not being proactive in driving the change and transformation agenda.
The truth is that you’ll never get everything done once your business is of a certain size (basically, anything bigger than a one-person business). Business is a game of priorities and it’s critical to be working on the issues that will move the needle forward.
The best way to do that is to let your diary reflect your priorities.
Schedule the ‘think’ time, the meetings, and the execution time you’ll need for your most important priorities. Once that’s in your diary you’ll realise how little time is left for everything else. This makes saying ‘no’ to the inessential much easier and helps force you to delegate and/or get more efficient at the run-of-the-mill tasks.
Are all senior leaders within your business trained in this skill and capable of prioritising what really matters?
4. Taking ownership of your leadership team’s behaviour
Modern businesses require a high degree of collaboration among everyone on the team, and this needs to start with the senior leaders.
You don’t want ego and competition among individuals or the different silos in your organisation.
My recommendation is to start by looking at your compensation plan. A great reference for this is a short book by Verne Harnish and Sebastian Ross called, Scaling Up Compensation: 5 Design Principles for Turning Your Largest Expense Into a Strategic Advantage.
I believe you should be trying to avoid almost all forms of variable remuneration. So-called “incentive plans” often just create dickhead behaviour. Don’t do it to yourself.
Pay people what they’re worth and then let them get on with the job. The penalty for not performing isn’t no bonus, it’s no job. And I state that for all of you business owners who get nervous about paying people what they’re worth.
Anyone good that you hire doesn’t need an incentive, they just want to earn enough to look after their family and feel appreciated for their skills, effort and experience. You can achieve that with fixed remuneration.
Once you fix any silliness created by so-called incentive schemes you are in a great place to get everyone talking to each other and solving problems across the business, not just in their silo.
A great practical tip in the HBR article is to “get pairs of leaders to work jointly on solving company-wide issues. enables them to merge their strengths, get to know each other better, and gain a clearer understanding of the drivers of success and the constraints that exist in areas outside their own spheres of influence. When they come up with solutions, they can share the praise and see the power of bringing different perspectives to bear on big, complicated problems.” *
There is change afoot in the financial planning marketplace. A new kind of leadership is required to succeed in a rapidly changing world.
Get your diary sorted to reflect your top priorities and don’t be pulled around by the urgent, but not important. Be bold in redefining who you serve and what you stand for. Failing to do so is likely to be an expensive mistake. (Other resources for new thinking include my white paper, What Next For Financial Planning In The UK and my blog Are you the only voice for change in your business?)
New ways of thinking need to work their way down through the whole organisation, but clearly, it needs to start with you at the top. So getting your leadership team structured in a way that lets you deal with the 6 paradoxes of modern leadership is essential.
“Surround yourself with talented people who can balance seemingly paradoxical leadership behaviours and challenge one another to collectively accomplish big things.” *
Let me know how you go.
* Reinventing Your Leadership Team, by Paul Leinwand, Mahadeva Matt Mani,and Blair Sheppard, HBR, Jan-Feb 2022)
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In the coming decade, what knowledge and skills are going to be essential for your business success?
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