The Never Sell Mindset

I’m going to call this latent desire for continued independent ownership an emerging trend.

You might laugh at me and respond that “every single independently owned financial planning firm I know wants this outcome” and you might be right.

However, I feel comfortable calling it emerging and not yet fully formed because as I said, most firms “want” to do this, but very few are doing what it takes to achieve this as a legitimate outcome.

The desire is there across a high percentage of owners, but is only likely to be achieved by a select few (I’m guessing less than 1% of independently owned businesses).

Unless, we can change that of course. Which is my reason for writing this paper.

As more and more independently owned and managed financial planning firms choose to grow without selling to a consolidator, we are going to have to learn to scale without losing our souls and becoming just as bad as the firms we don’t want to sell to in the first place.

As I stated above: to build “organisations that are fundamentally more capable than the ones we have at present.” ¹

The imperative is achieving our full potential.

You can’t change the world by selling out to someone who is going to bureaucratise your business and destroy its soul, and that is what will happen in the vast majority of cases if you sell to a consolidator, make no mistake.

If you want to avoid that fate, you need to be considering and adopting some of the ideas I am going to outline here.

¹ Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary Hamel and Michele Zanini

What Makes Businesses Great?

When I think about what makes a financial planning business great, three things spring to mind:

☐ Human-centred thinking (team as well as clients)
☐ Courageous leadership
☐ Cultural innovation

I arrived in the UK in April 2004, after 14 years as the junior partner in a leading Sydney (Australia) based financial planning firm. At that time financial planning as a business
model in the UK was relatively new. In fact I’d go so far as to say that anyone actually doing financial planning at that time was considered a bit of a hippy love child. It was
certainly not a mainstream idea or business model. Let’s call that courageous leadership.

What are financial planning firms great at?

Connecting deeply and directly with the end client and delivering amazing lifestyle outcomes for them. Let’s call that human-centred thinking.

And the whole culture of great financial planning firms has always been to put the client at the centre of the business model, to do what’s in the client’s best interests, and as a result, they have recruited and trained staff that see the world in the same way. Let’s call that cultural innovation in what was previously a totally sales focused industry.

Clearly, we’ve got some form when it comes to these characteristics and we should be proud of that.

However, things don’t stand still. In a world moving to AI, all three of these characteristics will be tested and require another round of reinvention. It won’t be enough to rest on our laurels.

This is not a paper about AI. AI is a tool which will build efficiencies and level the playing field in the advice profession. This paper is about what has always differentiated one firm from another and enabled great firms to flourish; our people and our teams. The human side of financial advice.

Your Strategic Choices

Kaihan Krippendorf, author of Outthink The Competition: How a New Generation of Strategists Sees Options Others Ignore discusses a range of ways to generate better strategic options. One of those is called ‘Move Early To The Next Battleground’.

The key idea being:

☐ Don’t play for today, play for tomorrow
☐ Skate to where the puck is going to be

Where is the next battleground in financial planning?

Some places he suggests considering are:

☐ Customer needs
☐ Customer behaviours
☐ Technologies
☐ Regulation
☐ Business organisation and management

And it’s the last of these, ‘business organisation and management’, that I’ve chosen to focus on in this white paper. There is more and more emerging thought leadership challenging organisations across all industries to re-think how they are structured and managed.

Why should financial planning be spared?

It won’t be.

The high-performing businesses of the next decades will operate very differently to the way we’ve chosen to do so up until now.

We are moving into a world where AI is going to be employed in every financial planning business and will take away a big chunk of what people currently do day-to day. That provides all of us with an opportunity.

However AI will not make a business great. Technological leadership (even if you do achieve it) gets eroded and equalised incredibly quickly. Making a business great for the long term is still going to come from the people, the human, and how we manage cultural change at every level of the firm.

What's The Purpose Of This Paper?

I don’t claim to have all the answers to the issues I’m going to raise. This paper is intended to “open the can of worms” and start some tricky, difficult, and very interesting discussions among the business owners and leaders who want more and believe there is more for us to do.

And let me be clear, “more” doesn’t mean chasing more money or more sale value. It’s simply “to see how great we can be” as a profession. I’m thinking of it like a personal quest and I hope you do too.

The cool part?

If you get any of this even half right, I suspect you’ll do very nicely from a financial point of view. The results will take care of themselves.

THE CHALLENGE: A Broken Approach To Management

The number one issue I see in smaller independently owned firms is that most decision making comes from or back through the owner themselves.

This is a problem:

For the team

The team becomes frustrated, because a busy owner might not be able to make a decision very quickly.

Most owner-advisers are still trying to manage a full client load, see some new clients, and manage large parts of the business, even if they have an Operations Manager in place. They are time poor. So a team looking for an answer before they can move forward sometimes has to wait.

What do the team do while they wait?

They put down whatever it is they were working on and pick up something else. This chopping and changing has a significant cost in terms of the team’s job satisfaction and use of their energy each day. It’s far from the most efficient way to handle throughput of work.

Worse still, it teaches the team to not make much effort thinking about solutions to their own issues or the issues of the organisation, because, “What does it matter anyway? The owner is a law unto themselves and will do what they want.”

This dramatically reduces creativity, contribution, and buy-in.

For the owner

Now the owner becomes frustrated and eventually burnt out.

A pile of decisions sit on their desk every day at 5:00 pm when the team goes home. The owner stays late to get the stuff done that they couldn’t do in the daytime.

Then they start carrying some frustration and resentment against the team, wishing they would make more decisions. Yet, that remains a vain hope because the owner, being the control freak that they are, has trained everyone in the business to not do that.

If you are under £1M of annual revenue, then being the smartest person in the business who all decisions must go through might work well enough. But…

“What if the thing that got you to £1M – control, oversight, being the smartest person in the room – is exactly what will stop you getting to £3M (or £5M, or £10M)?”

You might say I don’t want to get to £3M, £5M or £10M. However, I’d argue that you’re on your way to that whether you like it or not.

As I outlined in my previous white paper, How To Solve The Scale Problem, if you are a good financial planner you bump up against the growth conundrum:

“At some point on your journey, you get busy. Really busy. ‘At-maximum-capacity’ style busy. You’re under pressure, your personal life is under pressure and your team is under pressure.

Now you face some difficult strategic choices:

☐ Say ‘no’ to new business
☐ Grow your team (thereby increasing capacity)
☐ Let go of some smaller clients

Saying ‘no’ to new business is a total fantasy. Sure, you can say no to smaller leads and increase your minimums, but when that next perfect, ideal client arrives, are you really going to say ‘no’?

Of course not.

You’ve worked for 10, 20 or 30 years in some cases to put yourself in the position to attract those sorts of leads. Saying ‘no’ is not an option.

But when you say ‘yes’ you just put yourself and your team under more pressure.

Growing your team is the next possible choice and if you’re trying that right now, I don’t need to explain that it’s not easy.

Letting go of smaller clients makes logical sense, but it’s fraught with moral and emotional challenges for most of us because we’re nice people.

Let me be clear, there are no easy options here.” ²

So, if you want to stop grinding your way to ever higher revenue numbers and switch your focus to “how we can help more people,” then addressing this broken small business approach to management is really important.

Management by ‘control freak’ or ‘fearless leader’ is absolutely not the way to get the best out of your people. In the age of emerging AI, how important is it to get the best out of your people?

I’d argue that it’s incredibly important. The future of financial planning is still human.

Hopefully, AI does deliver on helping us do the mundane faster, so that our amazing people can use their skills on doing things that dramatically impact the lives of our clients. However, I’m definitely not predicting the end of human advisers or the replacement of large numbers of back office staff.

Roles might change, and the skills required in different roles might change too, but we’ll still be a profession run by humans. And if the mundane has been reduced or eliminated, the people in your organisation will be smart, with high emotional intelligence (EQ).

Maximising each and every staff member’s contribution will be the focus of the high-performing businesses of the coming decades. If you want to separate yourself from the pack, then learning the skills necessary to bring the best out of people is the number one priority, because smart, high EQ team members have other options. Working for you and your business is only one of many.

Our current approach to managing is based on lessons learned in the industrial revolution with an unstated but clearly important assumption that ‘people’ need to be managed, guided and controlled. It must be true because that’s how most of us running a business act in our management approach.

Aaron Dignan sums it up beautifully in his book, Brave New Work:

“We cannot do the best work of our lives under the auspices of an Operating System that presumes our stupidity, our laziness, and our untrustworthiness.

You get what you design for. Evolutionary Organisations know that if you treat people like mercenaries, they will become mercenaries. Treat them like all-stars and they will become all-stars.

To be People Positive is to assume and expect the best of everyone.” ³

² How To Solve The Scale Problem (in financial planning businesses) by Brett Davidson
³ Brave New Work by Aaron Dignan

What Really Drives Performance?

Job satisfaction across many societies is at its lowest levels in decades. Very few people love their job. ⁴

Why?

We need to start with the performance literature.

There’s a huge body of research across psychology, business, and elite sport, and it overwhelmingly points in one direction. Sustained high performance comes from environments that combine:

☐ Challenge + support

Not…

☐ Fear + control

Self-Determination Theory by Deci and Ryan is probably the most important framework in this area and says that people perform at their best when three needs are met:

☐ Autonomy – I have control over my work
☐ Competence – I feel capable and improving
☐ Relatedness/Purpose – I feel valued and part of something

Other theories that bolster the challenge + support approach include:

Psychological Safety by Amy Edmondson, which was popularised in Google’s project Aristotle.

The #1 factor in high-performing teams at Google wasn’t talent, experience, or IQ, it was psychological safety.

To be psychologically safe doesn’t mean we never argue or disagree. On the contrary, teams with psychological safety experience high levels of intellectual friction, but low levels of social friction.

The Progress Principle by Theresa Amabile and Steven Kramer, is another framework that says the single biggest driver of motivation is making progress in meaningful work.⁵

And if all of these theories are too warm and fluffy for you, what about “tough love” type leadership?

The evidence here is pretty clear too:

There are environments like elite kitchens or military units where high pressure, direct feedback and emotional intensity can produce results, but with three important distinctions:

1. It’s often misunderstood
What looks like “bullying” is sometimes actually clear standards, immediate feedback and higher accountability. Although when that becomes humiliating or fear-driven, performance drops.

2. It works short-term, not long-term
Fear can drive compliance and urgency, but it reduces creativity, learning and initiative which I would argue are the things you really need in your business if you want to be high-performing in the future.

3. Survivorship bias
As we know from our investment knowledge (fund manager performance data excludes all the funds and managers that closed), in our “tough love” businesses, we only see the bullies that succeeded, not the burnt-out teams with high staff turnover and toxic cultures that failed.

To sum it up, people perform best when they feel safe, capable, trusted, and valued – and are stretched. You can get compliance through fear, but you only get commitment through trust.

⁴ Gallup’s State of the Global Workplace Reports (2025 & 2026)
⁵ The Progress Principle by Teresa Amabile and Steven Kramer

The Buck Stops With Us

What I hear most from owners about the way their team behaves/performs is:

☐ “They don’t contribute – even when I ask them straight out for input.”

☐ “A lot of decisions come back through me, when I feel like they could make a decision and run with it.”

What causes the team to behave this way?

Option 1: There is a power dynamic that we’re not recognising. I know you’re cuddly and nice, but you have the right to hire and fire anyone in your organisation, and your team knows it.

Additionally, as I outlined earlier in this paper, if the team knows you will effectively make all the decisions or have final sign-off, it makes no sense for them to be
contributing.

Option 2: Maybe some people on your team are not capable of contributing. However, who hired them in the first place? (And if you’re tempted to blame your Operations Manager, who hired them?)

Option 1 is far more likely to be the reason driving a lack of engagement.

The bottom line is, if things are not quite working as we’d like, it has to be our fault as leaders.

The go-to management tool when presented with an Option 1 situation is to believe that your team needs to be incentivised.

But, as I outlined in another white paper, If Incentives Worked We’d All Be Amazing By Now, I don’t believe that incentives will solve a problem that we ourselves
have created. They are far more likely to reduce motivation rather than enhance it.

You have to address the real issue.

That is, you as the business owner are the choke point in your own business and to change that means creating a completely different culture and approach to management.

Bureaucracy - The Hidden Killer

In Humanocracy: Creating Organizations as Amazing as the People Inside Them, Hamel and Zanini state that bureaucracy – “saps initiative, inhibits risk-taking, and crushes creativity. It’s a tax on human achievement.”

And while their book is aimed at much larger businesses than yours, even in firms with relatively small headcounts I see bureaucracy already doing its dirty work.

One example that springs to mind is financial planning processes and outputs that are over-engineered. That is, the firm spends hours and hours producing stuff that doesn’t benefit the client in any way shape or form (e.g. financial planning reports).

The push back is that “the regulator made me do it.”

I’m sorry but that’s a cop out. Decisions around how to address compliance issues are the responsibility of the owner and/or the senior management team. You get to decide where on the slider you choose to operate in terms of your compliance outputs.

We know that if we asked a law firm to build your compliance process you’d never be able to do any business. At the other extreme, we know that if we let out-and-out sales people design your compliance process, you’d probably end up in prison at some point.

However, there’s a lot of grey between both of those extremes. And as a business owner, you get to decide where you sit. Not your compliance firm. Not industry commentators. You.

And think about this for a minute. I’ve had half a dozen clients who have been through the full-fat desk audit from the Financial Conduct Authority (FCA) here in the UK – that is, the FCA inspectors arrive at the financial planning firms offices, and owners and senior managers are taken into separate rooms. Fairly intimidating stuff.

The result in all cases?

The FCA in and out within a couple of hours. Nothing to see here.

The minute they understood that these firms were being run in the clients’ best interests, they were out of there.

My point is this. If you’re a good quality, client-centric financial planning firm, you don’t have a compliance problem. So stop acting like you do.

I know you’re scared. I know the regulator carries a big stick, but I genuinely believe they are regulating against those in the marketplace who have built business models that don’t best serve the end client. That’s not you.

And if it is you, it’s fixable, if you want to fix it.

What Is The Real Cost Of Control-Heavy Leadership?

There’s a financial cost to control-heavy, over-engineered leadership in financial planning businesses, although it doesn’t show up anywhere in your P&L.

It’s the opportunity cost from things like:

☐ Clients who don’t buy because the process is too convoluted.

Most advisers are closing only 20%-30% of new enquiries in my experience. And although I realise many factors contribute to that figure, various points of friction in the new client engagement process are a primary cause.

☐ Clients who do buy but are still not 100% sure if they’ve done the right thing.

It can take years to earn people’s trust.

☐ No referrals, or only a handful per year.

☐ Because referral rates are too low, you have to go and pay marketing firms a fortune to re-brand you and help with your client communications.

Typically, this doesn’t solve your lead flow issue, but at least you feel like you tried.

☐ Higher staff headcount to get the massive amounts of useless reporting written.

☐ Spending time evaluating AI software that will supposedly solve the report writing production issue for you – when the real issue is that you shouldn’t be writing the report in the first place.

☐ Restricting the number of families you can help, because everything is a slow grind.

If you allow these opportunity costs to remain for year after year after year, the final sale value of your business (whether you want to sell it or not) is reduced by millions. It’s like reverse compounding interest.

And dare I say it, the emotional cost of all of this is what drives many business owners in the financial planning space to think “I just can’t take it any more. I’m selling.” They then sell to some consolidator and are devastated when they see what happens to their life’s work.

Surely we can do better.

Let’s take a look at how.

NEW THINKING

In their Harvard Business Review article, Become An Octopus Organisation, Jana Werner and Phil Le-Brun argue that the metaphor for business organisations has always been ‘the machine’, with the goal of minimising risk and reducing variation using tools like standardisation, specialisation and control. ⁶

Our Current Logic Hierarchy

Unbeknownst to many of us, we’re managing our businesses using the Scientific Management approach (also known as Taylorism) developed by Frederick Winslow
Taylor in the late 19th and early 20th century as a way to make industrial work radically more efficient.

At its core, it’s a system for designing companies where ‘thinking’ is separated from ‘doing’, and work is broken down into the most efficient possible steps.

Taylor looked at factories and thought:

☐ Work is inconsistent
☐ Workers decide how to do things
☐ Output varies too much

So he asked, “What is the one best way to do each task?” and built a system around that idea. Managers did the thinking work and workers just did as they were told.

Using a simple logic hierarchy, here’s the current business model that we might all be secretly carrying around in our heads: ⁷

This approach did lead to some incredible increases in productivity in the 20th century, but as we know, knowledge work differs from making widgets and productivity gains have slowed dramatically in the last 30 years as advanced economies have become more service based.

The bureaucratic model as outlined above produces
exactly what it’s supposed to:

☐ Compliance
☐ Discipline
☐ Predictability

⁶ HBR article – Become An Octopus Organisation by Jana Werner and Phil Le-Brun
⁷ Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary Hamel and Michele Zanini

Does Our Current Approach Make Sense?

When you read this logic hierarchy and think about the unspoken philosophy of business management that many of us have (unwittingly) adopted, it jars.

Do I really believe my team here at FP Advance are just “factors of production”? Hell no.

In Humanocracy Hamel and Zanini say:

“There’s something wrong with the “whole system” in just about every organization, but rather than opt for a “down to the studs” remodel, most leaders simply rearrange the furniture – contenting themselves with a strategy review, IT update, acquisition, cost-cutting scheme, or some other initiative du jour.”

What if this list of fixes just isn’t going to get the job done?

I see financial planning firms trying this same list, hoping that things will improve.

Maybe it’s time for a different approach, using a “down to the studs” reframe of how you create and deliver value in a business.

The world and the world of business are completely different to the challenges of industrial production of 100 years ago, and Werner and Le-Brun compare the typical modern business organisation to the Tin Man in The Wizard of Oz:

“He was a rigid and clumsy character, slow to move and react. He could take instructions but showed little initiative…These companies [are] optimised for an era of mass production, adherence to process, and top-down planning. They struggle to cope with a complex world in which success depends on adapting and discovering – on building genuine, trust based relationships with customers, employees, and their broader environment.” ⁸

You might read the quote above and think, “we have high trust relationships with our clients. Brett Davidson should get off his high-horse.”

It’s true. Good financial planning firms do have client relationships that many other industries and professions would envy and aspire to.

However, I’m not sure that the relationship with the employees in most financial planning firms reaches the same lofty standards. I know many owners think they do, but I can assure you, many of their teams quietly disagree.

⁸ HBR article – Become An Octopus Organisation by Jana Werner and Phil Le-Brun

An Alternative Analogy - The Octopus Organisation

Instead of thinking of a business as a machine (the old metaphor), the octopus is used as the modern metaphor for a new style of business organisation because of the animal’s intelligence and curiosity, but also because each arm of an octopus can think and act independently of the others and the main body, but they can also coordinate and work together. ⁹

Tin Man Orgs treat strategy and innovation as top down management issues. The smart people in large companies, or the business owners in small businesses, decide on ‘what’ will be done.

Octopus Orgs by contrast know that “innovation is a distributed capability.” ¹⁰ It comes directly from the people at the coalface who are solving customer problems.

Octopus Orgs trust decentralised teams who are closest to the customer to work out what is the best approach for delivering the required client outcomes.

“Work today is less transactional and more relational. Customers have more choice, and so do employees. People don’t want to be managed, they want to be inspired. They don’t want to be told; they want to be heard.” ¹¹

The question at the centre of all Octopus Orgs is:

“Does this create more value for our customers?”

Focusing on this relentlessly causes a chain reaction in the business, driving greater employee engagement as people notice the direct link between what they do and the impact they have on clients. And it’s this ‘feeling’ that fosters the innovation and resilience required to survive and thrive in the business operating environment of the future.

“Research shows that customer-obsessed companies… are more than three times as likely to lead their industries in revenue growth…[and] also achieve profitability premiums of around 23% over their Tin Man peers.” ¹²

^{9, 10, 11 & 12} HBR article – Become An Octopus Organisation by Jana Werner and Phil Le-Brun

Some Real World Examples

Case Study 1: Morning Star ¹³

As at October 2023, Morning Star was the global market leader in tomato processing, supplying approximately 10% of the world’s ingredient tomato products.

Paul Green Jr, who was responsible for the company’s training and development efforts and is now a professor at the University of Texas’ McCombs School of Business, explains, “We believe you should do what you’re good at, so we don’t try to fit people into a job. As a colleague, you have the right to get involved anywhere you think your skills can add value. As a result, our people tend to have broader and more complicated roles than is typical elsewhere.”

The company started in 1970 and Chris Rufer, Morning Star’s founder and president, has long operated on the following belief:

“An organisational philosophy has to start with people, and the conditions that allow them to be more creative and passionate about their work, and freedom unleashes this. Everyone does better if they are free to pursue their own path. If they are free, they will be drawn to what they really like, versus being pushed towards what they have been told to like. So they will do better; they’ll be more enthused and charged up to do things.”

Rufer goes on: “There are a lot of personal nuances in how people work together, and the freer individuals are to explore those nuances and to tailor their relationships around their own particular competencies, the better all those contributions fit together. This is spontaneous order, and it gives you more fluidity. Relationships can change form more easily than if we tried to fix them from above.”

Case Study 2: FAVI ¹⁴

FAVI is a family firm based in Hallencourt in Northern France specialising in the development and production of machined and assembled technical solutions made from pressure die-cast aluminium, brass and copper.

CEO Jean-Francois Zobrist, who took the reins in 1983, believed that if you trust people, they will do the right thing. So he tried something radical:

“I came in the day after I became CEO, and gathered the people. I told them, ‘Tomorrow when you come to work, you do not work for me or for a boss. You work for your customer. I don’t pay you. They do. Every customer has its own factory now. You do what is needed for the customer.’”

☐ There are no time clocks, no quotas and no management. Just a commitment to doing what is right for the customer and one another.

☐ A worker at FAVI can buy a whole new piece of equipment without a voucher.

☐ The results:

● They’ve reduced their prices by an average of 3% pa

● They haven’t shipped a late order in 25 years – Why? Because teams at FAVI have end-to-end control and responsibility for what happens on their watch. On-time delivery isn’t a goal; it’s a social expectation.

● There are no localised incentives that might pit workers against one another. They get a share of the firm’s profits. (In a good year they earn 16 months’ wages in 12).

● Their competitors have outsourced their factories to China – FAVI is the one European holdout in its space, with roughly 50 percent market share. FAVI exports to China.

Case Study 3: Buurtzorg ¹⁵

Buurtzorg is a neighbourhood nursing company based in the Netherlands, founded in 2006 by Jos de Blok. The word buurtzorg is Dutch for “neighbourhood care.”¹⁶

It has 14,000 healthcare workers managed by a headquarters of fewer than 50 people.

Historically, care providers paid visits to patients at home, particularly those in need of end-of-life care, but the services had become soulless and productised.

Personal care was out of the question. Some patients saw as many as 150 different nurses in a year. Nurses were treated as automatons and yet, ironically, costs were up and quality was down.

The nurses hated it and patients did too.

de Blok set out to build an organisation where nurses could pursue their calling to help others unencumbered.

At Buurtzorg, each community is served by a self managed team of 10 to 12 nurses who have the freedom to care for their patients as they see fit, with the goal of “helping home-based patients become healthy and autonomous.”

A nurse might administer medication one moment and then engage the patient’s neighbours about the patient’s progress and needs the next.

You might assume it’s more expensive, the luxury of a quasi-socialist economy. It’s just the opposite:

☐ Buurtzorg uses less than 40% of doctor-prescribed hours.

☐ The Dutch government outsources to them and saves hundreds of millions of Euros per year.

☐ Delivering care in this new way resulted in a 20% – 30% reduction in per-patient costs (Ernst & Young).

☐ Annual revenue is €350M with just 6 financial administrators and no CFO.

☐ Because delivery of care is owned by decentralised teams, there’s no bureaucratic leadership and functions.

What’s The Thread That Links Them All?

In all three of these examples leadership have minimised head office and the top down command-and-control approach and allowed frontline people to get on with doing what they are paid to do.

They are high-trust, believing that people are smart enough to work things out for themselves.

And they are all completely customer-focused. That’s the brief to the team members – do what’s best for the customer.

¹³ Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary Hamel and Michele Zanini
¹⁴ Brave New Work by Aaron Dignan
¹⁵ Brave New Work by Aaron Dignan
¹⁶ Wikipedia

What's The Real Issue?

What I’d love you to recognise from these case studies is that there are approaches we can take, skills we can learn, and new ways of dealing with old challenges that allow everyone in the team to flourish, if we can be open minded enough to try them.

However, most business owners are terrified of losing control.

I realise you may not want to acknowledge that, or use a word like ‘terrified’, but I believe it fits because of the actions of most business owners. They struggle to let go of even the most minor task.

Not sure that’s true?

Ask someone on your team to score you on a scale of 1 to 10 when it comes to delegation. (And take a couple of points off whatever they score you because you’re the boss and they are unlikely to give it to you straight).

If you’re self-aware enough to recognise this issue in yourself that’s a great first step, but we’re looking for more.

When you worry about giving up some control, what are you afraid might happen?

Here are a few responses that come up frequently:

a.) A compliance malfunction

☐ Loss of clients’ funds

☐ Fat finger error

☐ Action from the regulator

● Fines
● Closure

☐ Poor advice given by rogue adviser/s

And any of these could conceivably lead to bankruptcy or severe reputational damage so I understand the concern.

b.) Additionally, there is a feeling from business owners that they will no longer know what’s going on in the business if they relinquish control.

Although underneath that might be lurking something else, like a sense of not being as important or needed. (It feels good to be the King or Queen in your own organisation)

As I outlined earlier in this paper, owner-control wears your people out and teaches them not to make much effort trying to find solutions to issues because the owner will have the final say anyway.

Whether you like it or not, there is a power dynamic because you have the power to end someone’s employment, so it’s much harder than you think to get honest feedback from your team.

c.) There is also the issue of being the smartest person in the room.

Because of your experience as an adviser and business owner you might hold a belief that you know best in a lot of situations, and because you own the business you can make decisions quickly.

It’s always quicker to make a decision or do some task yourself, rather than mentoring and coaching people on how to resolve their own issues or teach them a new skill.

However, that’s only true in the short term. If you never let go of tasks and decisions, you become the handbrake in your own organisation. Decisions get stuck with you as you get busier.

Your identity as “the best adviser” or “the decision-maker” severely limits the business.

If you can take the long view and develop the people in your business, eventually, you free yourself up to truly lead, without having to get caught up in the day-to-day decision making or delivery.

If you want your organisation to grow and be sustainable for 100 years you need to move from player to coach.

Without that shift, really great people won’t want to come and work for you, or won’t stay, because it’s too frustrating and they don’t get to use all of their talents.

At what point does control stop being helpful and start becoming the bottleneck to growth?

FIRST STEPS

Translating Some Big Ideas Into Small Business Reality

My take away from everything we’ve covered so far is that we’re looking for a total overhaul of how our businesses are organised and managed. Effectively we’re trying to provide much greater autonomy to our amazing teams to allow them to “self-manage”.

But what does that actually look like in a 5, 10, 20 or 30 person financial planning firm, not in theory, but in meetings, decisions, and client work?

Let me do my best to outline some strategies and ideas that you can use in your business to effect change.

But let me be very clear, this is a completely different philosophy.

Using some of the tools I outline here won’t change much in your business if the core mindset that you hold remains rooted in fear of losing control and a ‘Taylorist’ approach to management.

An Alternative Model

What I’m proposing is a complete re-think of our logic hierarchy, based on some of the principles we’ve uncovered so far.

When communicating with your team, the central idea is this:

“In every situation, make the best decision you can for the client.”

Now clearly, this will involve debate between peers, and differences of opinion at times.

Maybe a younger planner comes up with a technically brilliant solution that is way over-cooked for the level of client they’re looking after. Situations like this (and there will be many) provide an opportunity for an exchange of ideas. There are always three possible outcomes:

1. They hear your point of view and learn something new – adding to their knowledge and experience.

2. You hear their point of view and learn something new – modifying your long standing received wisdom.

3. You co-create a new option that neither of you had previously considered.

Encourage people to take some risks and provide feedback/coaching along the journey.

To get you started with some actionable baby steps, in the following pages are five ideas.

¹⁷ Brave New Work by Aaron Dignan
¹⁸ Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary Hamel and Michele Zanini

1. Transparency of Data

I’m a firm believer that your team can’t make the same decisions as you without access to the same information as you.

In the real world examples we looked at earlier (Morning Star, FAVI and Buurtzorg), each company gives employees autonomy to make decisions, but also provides them with the same information as the management team. Let’s call it “radical transparency.”

What would “radical transparency” look like in practice for a financial planning business?

The team needs access to any and all data that lets them improve outcomes for clients and the business as a whole.

For example, let’s say you have more than one pod structure, consisting of a lead financial planner, an associate financial planner or paraplanner and an administration support person.

What will they need to know?

Here are a few metrics for each pod (and you could co-create this with your team):

☐ Total revenue

☐ Average case size (using fees generated or AUM)

☐ Turnaround times at each stage of the advice process,

That is, time between:

● Initial client contact and initial screening call with an adviser
● Screening call and first meeting
● First meeting and formal engagement (i.e. signed Terms of business)
● First meeting and presentation of initial advice
● Presentation of initial advice and agreement to proceed
● Agreement to proceed and completion of all implementation work

☐ Team satisfaction (for each pod member)

☐ Client satisfaction

Clearly, you’re not going to merely compare revenue generation between pods – the first metric. As we all know, focus on short term sales performance might be storing up longer-term consequences.

It’s also important to consider ‘how’ you might collect and evaluate some metrics. Client satisfaction is a good example.

I’m not going to rush you into sending client surveys. As a consumer I get asked for my feedback by all and sundry when I’ve made almost any kind of purchase. It’s annoying.

What would be one metric I could use instead that indicates high levels of client satisfaction?

Referrals.

So I’ll track that as a proxy for client satisfaction.

Importantly, I’m not going to let me or my team get overly fixated on one metric.

I read a story about a person who had purchased a new car in the US. He was really happy with the sales process and his purchase.

However, after purchase, he started getting nudges from both the salesperson and the customer support team to leave a review online. He was a busy person and although he intended to do it, he just never did leave that review.

The nudges continued relentlessly.

It got to the point where it felt like harassment and eventually he ended up hating the company he bought the car from.

Now, my guess is that the car company had rightly identified that online reviews make a difference to lead flow and trust. Then they incentivised the sales team and customer service team to get those reviews.

As I outlined in my white paper, If Incentives Worked We’d All Be Amazing By Now, incentives can create unexpected outcomes. In this example, by focusing on one important metric, they’ve forgotten that the real goal is to end up with a satisfied customer.

They successfully turned someone who was initially a raving fan into a total hater, which I’m certain was not the idea when they put the incentives in place.

(Seth Godin’s blog, Avoiding the false proxy trap, explains the danger of the metric replacing the actual goal).

What’s The Goal?

Once I’ve assembled what me and my team think is the right data, I’m then going to share it online with everyone in the business, including the other pods. That way, each pod can compare themselves and look for areas from which they might be able to improve or learn.

Transparency of information allows people to self-reflect and work out for themselves how things are going. Self-learning within and across pods is what I’m looking for.

I’m not going to incentivise or reward people for being the best performing pod.

Why?

Because that is likely to encourage silo’d thinking and behaviour as pods try to keep any advantage secret to maintain their overall advantage over other pods.

I want pods to share learning with each other, running experiments, innovating and improving together.

The business is not a bunch of individual teams. We’re all one team, with one goal (improving the lives of our clients).

What Data Do I Include Or Exclude?

As I create data to share across the whole team, I might start with sharing everything I can lay my hands on and then slowly eliminate data that doesn’t actually contribute to good feedback or decision making.

To do that I can ask the team and we can solve it and improve it together.

☐ If something is missing – let’s add it

☐ If there’s too much – let’s take stuff away until we get it right

Full Financial Performance Data

Overlaid on top of this pod specific data would be information about the overall businesses’ performance. Specifically, the profitability ratios, productivity ratios and client selection ratios. (See my PFS Power webinar, Know Your Numbers, for a full explanation of those).

What would need to change first?

There are a couple of key issues to get to grips with if you want to embrace “radical transparency.”

Issue One: Sharing Profitability

The first one is about you getting comfortable sharing profitability information with the team.

I hear constantly from business owners that they are concerned staff will hit them up for pay rises if they see the firm’s profitability.

Maybe they will, maybe they won’t.

Other owners who are not making much (or any) net profit, fear that staff might become nervous if they are told they are working in a low profit firm.

In either case I’d still be taking some time to explain profitability to my team.

Remember, they can’t make the same decisions as you without access to the same data as you, and additionally, having the same understanding of the data as you.

To address that I created what I call My Net Profit Speech and I’d deliver this to the team to help them understand how the business works:

“The net profit figure that we’re aiming for in the medium term is 25% of turnover. And that’s a net profit, AFTER everyone in the business gets paid a fair market salary for their day job – including me.

Does anyone know why we’re aiming for 25%?

Here’s our reasoning as responsible business owners.

We’ve done some industry research and found that globally, a 25% net profit seems to be what ‘good’ looks like for quality financial planning businesses. So we want to be performing at that level. (That’s 25% net profit BEFORE tax).

If we can get to that level and maintain it, we believe we provide stability for everyone on the team, for our clients, and for us as business owners.

As you know, periodically economies and markets go through downturns. It seems to happen about every 7 – 10 years. Whenever there’s a downturn two things happen in a financial planning business:

☐ Our revenue drops because new leads tend to dry up for a bit while everyone decides whether the world is going to end or not.

☐ Our ongoing revenue which is tied to our clients’ assets under management can fall, and we usually end up doing even more work than usual in that period, because that’s when clients need us the most.

If we’re making a 25% net profit margin and the stock market crashes by 50% our ongoing revenue falls by about 23% because our clients are not 100% exposed to the stock market are they? They’re in balanced and diversified portfolios.

So for a year or two, we make no profit at all, but everyone can be retained and paid properly during that time without worrying about their job security.

It makes us a more sound business. Does that make sense?

The final reason for us choosing a 25% net profit margin, is that to keep the business growing, we have to reinvest pretty heavily each year. This is what happens to our net profit at year end:

☐ A quarter of it gets paid to the government in corporation tax

☐ From what’s left we reckon that around half of the remainder gets reinvested into the business

☐ The other half of the remainder gets distributed as a dividend to shareholders or held back as a cash reserve war chest

Those splits can vary a bit year on year, but as a guide that’s how it goes.

This year we’re aiming for a xx% net profit margin, which is actually up (or down) from xx% that we did last year. We expect to be able to get to 25% in another x years time.”

If you’re still worried about getting hit up for unrealistic pay rises, the best way to overcome this is to create clear job specs and pay scales so that you can show people what they need to do to get to the next level. It stops the knocks on your door, which are typically happening because people don’t know what it takes to get to the next level.

(For some guidance on this issue, check out my white paper, If Incentives Worked We’d All Be Amazing By Now, and go to the section titled, Principle 2: Fairness Not Sameness.)

Issue Two: Improving Everyone’s Business Acumen

While many large companies spend a lot on “leadership development” they invest next to nothing supporting bottom up entrepreneurship.

As small business owners, most of us really believe in entrepreneurship. So why not educate your team on some of its key concepts?

Here’s what I’d recommend you teach your team:

☐ Generate ideas that benefit the client. This usually involves ‘simplification’ not ‘addition’.

☐ Focus on the ‘one thing’ you are best at as a firm. Then identify other best-in-class suppliers of other services your clients might want, but you don’t want to build yourself. This keeps you focused.

☐ Ignore compliance completely when you are designing new offerings or ways of delivering value. Focus only on what is best for the client experience. You can make it comply later.

☐ Care deeply about every client that you choose to serve. The work we do makes a difference, but only when delivered with genuine care for the client.

☐ Know which clients we are not set up to serve. We can’t save the world, but we can make a big difference to our target client. Leave something for the next person. Other. firms will choose to specialise in segments that we choose to ignore.

☐ Ask great questions of clients at every interaction. And then listen in silence so they can really explore what they think.

● Ask “Anything else?” a lot – and shut up again for longer than you might feel comfortable

☐ Respond quickly to requests. Speed shows that you care and that clients matter.

● Find ways for everyone in the firm to improve speed of response

☐ Anticipate client needs in advance. This is even better than speed of response.

☐ It’s never about the price, it’s always about the value. If you deliver on the issues above you can ethically charge a premium price,.

☐ Understand the value you add in cash to your clients every year.

☐ Know your numbers. Teach everyone in the business how to understand the three key ratios (profitability, productivity and client selection) every quarter.

☐ Focus on increasing the productivity metrics in the business. That may or may not involve new tech. It may come from dramatic simplification (e.g. eliminating reports).

☐ Just ‘delivering’ for clients increases referral rates, which lowers marketing costs and increases productivity and profitability.

☐ Treat all staff with respect. Coach and mentor them in a wide range of skills so they understand more than just their roles.

● Twice a year play ‘musical roles’ and do someone else’s job for a day. It’ll be bad for firm productivity on that day, but will dramatically increase the empathy team members have with each other.

● Lead by example. Walk your own talk. Invest in your own investment option. ‘Save’ like you tell your clients to. Little and often started early in life works best.

As Harvard Business Professor Marshall Ganz notes, people who change the world are focused “not [on] winning the game, but changing the rules.”

Change the rules in your business by educating everyone on the team in these important principles.

Remember, these three issues from our logic hierarchy:

As you educate your team and they know more, they can bring more value to your business and enjoy their work lives more too. Mastery is a very rewarding feeling.

Transparency of data is the very first thing I’d work on if I was trying to give my team maximum autonomy.

Crack this and you have a massive competitive advantage over firms that are not doing these things, because now you run a self-learning organisation. It doesn’t require brainwaves from ownership or senior leadership to make things better. Experiments can be created more quickly and learned from faster when everyone in the organisation is empowered to run them.

¹⁹ Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary
Hamel and Michele Zanini

2. The Raci Matrix

The RACI Matrix is a simple tool taken from project management that can be very helpful when you start trying to give more autonomy to your team.

RACI stands for:

Responsible – who is responsible for performing a task?
Accountable – who ultimately owns this project?
Consulted – which subject matter experts will be asked to add their thoughts
Informed – who will be updated on progress?

There can only be one person who is accountable.

There must be at least one person who is responsible.

As you might already be realising, if you have some sort of
project you’d like to move forward (e.g. a project to work
out how to stop writing financial planning reports that
clients don’t read or understand), the RACI matrix lets you
set up the team for success.

One person will be accountable for delivering something
meaningful from the project. Ideally, someone who is
passionate about eliminating written financial planning
reports.

In terms of who is consulted maybe it would include:

☐ One adviser in your firm
☐ One paraplanner in your firm
☐ The operations manager (if we have one)
☐ Your external compliance people
☐ An external consultant with some knowledge of how other firms do this
☐ A client representative or two

In terms of keeping people informed, we might choose to regularly update the following people on progress:

☐ The business owner
☐ The operations manager
☐ The rest of the team

And finally, from the project team constituents, tasks could be delegated or agreed and each individual is responsible for delivering their task in good shape and on time.

What’s great about this tool is that you are achieving two important outcomes:

1. You can form project teams and delegate the project (while still being kept informed and providing input as needed)

2. You are developing your team and future leaders within the business. By giving people autonomy and responsibility, they get to grow and learn.

3. Sprints

If you’re running a project within your firm, like our example above for the RACI Matrix, you might also want to incorporate the concept of sprints.

A sprint is a unit of time in which the project team must produce and share a unit of work.

Typically a sprint will be a 1 or 2 week period. It’s short by design so that project teams don’t disappear for 3 months and then come back to show you something that is miles off track.

As Aaron Dignan explains in Brave New Work – “While this might seem arbitrary, sprints enforce a lot of good habits that seldom emerge without a rapid cadence.

For starters, they force teams to get going. If you know you have to ship something, anything, at the end of the first week, you don’t waste time debating which #2 pencils to order.

Sprints also force teams to break down the work into smaller bites. If you’re building enterprise resource planning (ERP) software or an app that scans brain waves, you won’t be done in a week. So teams are left to figure out what can be done.

☐ A minimum viable product (MVP)
☐ A paper prototype
☐ A list of approved vendors

Because come Friday, something has to be shipped.”

Every Friday or second Friday in fact (depending on the frequency you choose).

The point being that as the team shows its next piece of work at the end of the sprint, you can provide guidance or a nudge to keep the project firmly focused on whatever it is you want it to deliver.

In conjunction with the RACI Matrix you can consider the ‘C’ & ‘I’ – that is, who needs to be consulted or informed.

4. Create Stronger Teams

Drawing on Self-Determination Theory by Deci and Ryan (highlighted earlier in this paper), people perform at their best when three needs are met:

☐ Autonomy – I have control over my work
☐ Competence – I feel capable and improving
☐ Relatedness/Purpose – I feel valued and part of something

In his Harvard Business Review (HBR) article, 5 Things High-Performing Teams Do Differently, Ron Friedman highlights what high-performing teams do that is different from regular teams:

☐ They pick up the phone – Friedman acknowledges that workplace phone calls are a lot less common, but not with high-performing teams. They call and speak to colleagues more often, reducing misunderstandings and strengthening relationships.

Author’s note: In a world of remote working, this is a great idea to discuss with your team.

☐ They run better meetings – by requiring participants to do more pre-work before turning up, having an agenda, and doing an initial check-in to keep team members up to speed with each other’s progress. These actions don’t just create more effective meetings, but also lay the groundwork for better relationships.

☐ They bond over non-work topics – spending some work time talking non-work stuff (like sports, films, books, etc) helps team members identify shared interests, “which fosters deeper liking and authentic connections.”²⁰ They might also go for a coffee or a drink occasionally after work.

☐ They give and receive appreciation more frequently – recognition is a powerful motivating force and high-performing teams said they received lots of appreciation from colleagues and managers, and importantly, also gave out lots of appreciation too.

☐ They are more authentic at work – that is, while they give more appreciation than other lesser performing teams, they also express more negative emotions at work. Why is this a good thing? Because the alternative to expressing negative emotions is suppressing them, which is cognitively expensive and leaves less mental firepower for actually doing the work.

“Fostering close connections among teammates need not be expensive or time consuming. By incorporating simple, evidence-based practices that yield better communication, more productive meetings, and deeper friendships, every workplace has the ability to fuel people’s basic psychological need for relatedness and lift team performance”²¹

In another article for HBR, How To Build A Superteam That Keeps Getting Better, Friedman adds some other ideas to the list above.

The three characteristics of superteams are:

1. They get more done by managing time, energy and attention more efficiently
2. Their members actively make one another better
3. They’re constantly building new skills and improving over time

It’s point 3 that he believes is the real differentiator and “at the centre of every learning culture is a leader who makes growth a daily priority.” ²²

So how do you make growth a priority leading your business?

Friedman suggests:

☐ Run more experiments – Superteams try new ways of working, even when things are going well. Average teams stall as soon as they find something that works and they stop asking questions and being curious.

And be sure to share the data or learning outcomes from your experiments transparently across the whole business.

☐ Make curiosity contagious – Sometimes we feel as leaders that we’re expected to have all the answers, but this is not true. “By pairing “I’m not sure” with a clear follow up, such as “but I know who to ask”, leaders make it safer for others to admit their knowledge gaps, fostering a culture of continuous learning.”²³

Leaders of superteams are “53% more likely to show a genuine interest in learning from their employees.”

☐ Ask the one question most leaders avoid – Meetings can often become ‘sharing progress fests’ which makes it difficult for the team to raise any tricky issues. Superteam leaders do it differently, by trying to actively identify the problems or challenges in the business. Asking “What are you stuck on?” is a simple way to provide that opening.

(An excellent book demonstrating the efficacy of this approach is American Icon: Alan Mulally and the Fight to Save Ford Motor Company)

☐ Roll up your sleeves, even when you don’t have to – This is an interesting one. We’re often taught to delegate and stay out of the minutiae. However, the best leaders often stay involved to model standards and keep an eye out for challenges arising. Although it’s important to note, there is a difference between being involved, working side by side with your team, versus micromanaging (hovering, correcting, taking over).

☐ Make feedback feel like support – “The faster a team learns what is working and what is not, the faster it improves.” Leaders of superteams deliver feedback more often and in a better way, and it’s a skill. The recipients of feedback report wanting it to feel motivational without coming across as critical, because criticism is flat out demotivational (I’ll cover more on this later). The key is framing any errors or mistakes simply as useful data to improve learning (i.e. we can do it better next time).

☐ Encourage growth, even when it doesn’t benefit you – On the best teams there is an encouragement of learning – any learning. So if an employee has another part of their life that they put time and energy into, rather than seeing it as a threat, superteam leaders support it. That might be a side-hustle business an employee is running, or volunteer work or extracurricular study in something unrelated to their job.

And if a good employee does leave, they still feel supported and are kept in touch with. “These connections often evolve into informal alumni networks that generate referrals, rehires and lasting goodwill.” ²⁴

☐ Lead with meaning, not just metrics – “When people grasp how their work contributes to something larger, commitment deepens, collaboration strengthens, and the whole team moves forward together.” ²⁵ Great financial planning firms ensure that everyone on the team gets exposure to the impact good advice creates, by having team members sitting in on important client meetings a few times a year, or hearing directly from clients about how the work changed something important for them.

I love both of these Friedman articles because they provide some practical, actionable ideas for you to work on as you reinvent and co-create your new approach to managing your team. My advice is to pick one or two of these characteristics and work on them as managerial development points for you (or you and your leadership group). As they become ingrained behaviours you can revisit this list and add something else to your skills arsenal.

^{20, 21} HBR article – 5 Things High-Performing Teams Do Differently, by Ron Friedman
^{22, 23, 24 & 25}HBR article – How To Build A Superteam That Keeps Getting Better, by Ron Friedman

5. Give Effective Feedback

There is lots of advice on how to give feedback effectively.

Rather than focusing on the latest technique, Marcus Buckingham in his HBR article, The Feedback Fallacy, argues that the sole reason for giving feedback “is to help
people do better. And when we examine that – asking, “How can we help each person thrive and excel?” – we find that the answers take us in a different direction” [to most
of the techniques one is taught].²⁶

The research is clear: simply telling people what we think of their performance doesn’t work and can actually slow down their learning.

Buckingham argues there are three pervasive theories lurking in the business world that many of us have accepted as true.

1. The theory of the source of truth – which believes that other people can spot your weaknesses better than you can and so it is beholden on them to share them with you.

2. The theory of learning – believes that “the process of learning is like filling up an empty vessel.”²⁷ You lack certain skills and abilities and it’s up to your managers or colleagues to teach you.

3. The theory of excellence – believes “that great performance is universal, analyzable and describable”²⁸ and therefore it can be taught by one person to another, regardless of the individual being taught.

These prevailing models are self-centred and assume our expertise and our colleagues’ inexpertise, “that my way is necessarily your way”²⁹, yet according to Buckingham, research reveals none of these theories are true. The article, which I highly recommend, goes on to explore in some detail why each theory just doesn’t hold up in the real world.

As they become ingrained behaviours you can revisit this list and add something else to your skills arsenal.

How To Help People Excel

Excellence is an outcome and so the way to get more from your team is to notice good outcomes.

For example:

☐ A first meeting led by a newer adviser where they asked great questions and left loads of space for the client to think and respond

☐ Some advice created by a paraplanner that is high-quality and error free on the first checking.

☐ An interaction where a team member handled a difficult client situation with grace and professionalism.

When you notice something has gone well “turn to the team member who created the outcome and say, “That! Yes, that!” ³⁰ What you are doing in that moment is pausing the work to help the person themselves notice something that really worked.

Your goal is not to merely give praise (not that it’s a bad thing), instead describe what you saw and use phrases like “This is how that came across for me,” or “This is what that made me think,” or even just, “Did you see what you did there?”³¹

By adopting this approach, you’re not telling people what to do, or assuming you are the font of all knowledge, you’re just reflecting what you’ve noticed. It’s much more powerful.

And if you are a team member who gets some praise from your boss or a colleague, ask them “Which bit? What did you see that seemed to work well?” ³²

The Present, Past And Future Approach

For leaders and managers, if a team member asks you for feedback, try the present, past and future approach:

The present:
When a person comes to you with a problem that is in the now, they are feeling challenged. So start with asking them to tell you three things that are working for them right now. They can be related or unrelated to the challenge they’ve brought to you.

The purpose of the question is to release some oxytocin (the “creativity drug”). This puts them into a place where they can be open to new ideas and solutions.

The past:
Now ask, “When you had a problem like this in the past, what did you do that worked?”³³ Most of us do have some life experiences we can draw on to solve current issues. Get them thinking about how they felt and what they did when something like this happened before.

The future:
Then ask, “What do you already know you need to do? What do you already know works in this situation?”³⁴ You can certainly offer up some of your own experience if this will help them clarify their own experience. However, your overriding assumption should be that they already know the solution, you’re just helping them dig it out.

Try to avoid “why” questions and focus on “what” questions. “What do you actually want to have happen? What are a couple of actions you could take right now?”³⁵

What I really like about this approach is that it gives business leaders a way to hold a mini-coaching conversation with their team members, rather than jumping straight in  with advice (which is so tempting).

Great organisations of the future are focused on giving team members much greater autonomy, supported by total access to relevant data, and the encouragement and support of the business leaders. Buckingham’s ideas on how to give effective feedback supports these moves.

This approach can also help in creating a psychologically safe work environment.

As I outlined earlier in this paper, the concept of Psychological Safety was first developed by Harvard Business School professor, Amy Edmondson, and is “a shared belief held by members of a team that the team is safe for interpersonal risk-taking.” That allows team members to speak up and raise concerns, or admit mistakes, or even put forward a new crazy idea without fearing embarrassment, punishment or rejection.

What It Is Not

However, psychological safety is often misunderstood.

It is not…

☐ Comfort or the absence of challenge:
A psychologically safe environment is not a “nice” environment free from hard conversations or high standards.

☐ Unconditional agreement:
It is not a licence to avoid difficult feedback or to always validate people’s ideas. On the contrary, it creates the conditions where honest disagreement can surface without becoming personal or destructive.

☐ The same as trust:
Trust is typically an individual-to-individual perception; psychological safety is a collective, team-level belief about the environment itself.

☐ A personality trait:
It doesn’t mean that some individuals are “safe” and others are not. It’s a team trait, which means it can be actively cultivated or eroded by leaders and colleagues through their behaviours.

☐ An excuse to lower standards:
Business owners sometimes worry that prioritising psychological safety will lower performance expectations. The evidence says otherwise: teams that feel safe to raise problems and learn from mistakes consistently outperform those that don’t.

(Once again American Icon: Alan Mulally and the Fight to Save Ford Motor Company demonstrates the efficacy of this approach)

One Word Of Warning

I almost didn’t include this section on giving feedback.

Why?

Because it immediately takes us back to the idea of hierarchy, with you and your leadership team being the smartest people in the organisation.

However, I hope it’s clear that although the article claims to be about giving feedback, it’s really about how you get the most out of people, which I felt was precisely in line with the goal of this paper.

Please read and action this section in that spirit.

^{26, 27, 28, 29, 30, 31, 32, 33, 34 & 35}HBR article – The Feedback Fallacy, by Marcus Buckingham

THE BIG SHIFT

The Octopus Org

If we go back to the idea of an Octopus Org it starts to raise some questions.

But How Do We Do This?

If you’re like me, you’ll find the ‘idea’ of a newer, more flexible organisation appealing. The aim being to unleash the talent and creativity of everyone who works in the business, rather than continuing the top-down, command-and-control approach that most businesses have unwittingly adopted. This has got to be great for teams if we can bring it about, and I believe it will be great for business owners too.

However, the question that runs through my mind is “How do we make this change? Give me the manual on how to make it a reality.”³⁶

Unfortunately, this is a Tin Man question. You don’t become an Octopus Org in a step by-step, neat and tidy way. The real change has to come from changing how you see the world, then acting differently and making different decisions and choices. Like building a great marriage or a family, it’s messy and emergent, there isn’t really a blueprint for success.

The key change is a mindset shift and Werner and Le-Brun suggest three principles to help you on the journey:

1. Make changes with people, not to them:
Use the collective intelligence, experience and motivation of the people on your team. If people aren’t pointing out what’s holding them back and making suggestions for improvement then you’re not evolving into an Octopus Org.

2. Entwine learning and impact:
Your goal isn’t to change for change’s sake, it’s to discover what truly works. So run experiments. Try new ideas out for size, but make sure you capture and evaluate the learning. Not every experiment will be a winner, but you can learn something from every single one.

3. Do less to achieve more:
Don’t just add (another program or process). Look to take things away and subtract – a process, a checking function, a dependency, or a crappy way of working. Start small.

³⁶HBR article – Become An Octopus Organisation by Jana Werner and Phil Le-Brun

Identify What’s Holding You Back

Identify What’s Holding You Back

The first steps to becoming more adaptable and octopus-like starts with identifying what is holding you back. Werner and Le-Brun argue that most businesses make the same predictable mistakes. The most damaging ones are:

a.) Behaviours that compromise clarity:
Business owners and leaders overestimate how well their people understand what the business is there to do and how it will get it done. The outcome is a lack of context for the team about what they are trying to solve for and how to make decisions.

As I stated earlier, what if we just took time to explain that the only goal of a financial planning business is to do what’s best for the client. Sure, for the first year or two there might be plenty of discussion around what constitutes “best for the client”, but out of that comes team learning and consensus on what good looks like and how we make it happen on a day to day basis.

b.) Behaviours that undermine ownership:
We’ve all said things like “Our people are our greatest asset” and then banned or discouraged people from doing anything without permission, driven by our fear of compliance.

We’ve instituted incentive programmes with the underlying belief that people need to be prodded or poked to be motivated. And when a failure does occur our response is often more checks and balances.

Eventually, people disengage. “But being cogs is not our inherent state.”³⁷

c.) Behaviours that stifle curiosity:
“Without curiosity, organisations calcify, optimising what they already know while becoming blind to emerging threats and opportunities.”³⁸

Curiosity is the key to adapting successfully, and while business leaders say they want curious and creative thinkers, their actions (i.e. the structure of their organisations) suggest otherwise.

One particular study found that while 73% of executives understood that curiosity and imagination were critical traits, only 9% of employees felt their leaders supported those traits.³⁹

Many owners of independently operated financial planning firms left organisations that were run this way, because their own curiosity to do things differently, for the benefit of the client, was being crushed. You know what this feels like. Where have you unwittingly created a business structure that is stifling your team’s creativity and curiosity?

In an AI driven world, creative problem solving and a human-centric approach is going to become even more valuable.

I love this question from Hamel and Zanini. Ask the people on your team:

What do you do in your job that…

☐ Blurs or reduces accountability
☐ Slows you down or wastes time
☐ Makes you less effective
☐ Doesn’t serve the interests of customers
☐ Frustrates bold thinking
☐ Feels disempowering
☐ Impedes collaboration
☐ Reduces flexibility
☐ Rewards politicking
☐ Erodes trust and transparency
☐ Makes you feel undervalued
☐ Seems unfair

This exercise might be a fabulous starting point on your path to organisational and cultural reinvention.

Once you’ve discovered some of the issues that are holding your business back, identify which one seems to take the most energy from you and your team. Then, using some of the tools I outlined earlier (RACI Matrix, Sprints), create a team to investigate the issue, led by someone who is naturally passionate about solving the issue, or alternatively, consider appointing your chief sceptic to tackle it.

If you do succeed in overcoming an issue through this type of learning, resist the urge to ask “How can we scale it?” This is a Tin Man approach. Scaling is often shorthand for another top-down mandated process. Don’t do it. Leave decision making to each pod, group or team and allow the best ideas to “spread” naturally. The key to that happening organically is fully transparent sharing of information and data as we discussed earlier in this paper as another tool for success.

^{37, 38 & 39}HBR article – Become An Octopus Organisation by Jana Werner and Phil Le-Brun

Changing Your Approach To Leadership

Embracing a new approach to leadership is not about learning new skills per se, it’s more about unlearning the habits of a lifetime, many of which we have adopted via osmosis, not conscious choice.

Like Aaron Dignan in Brave New Work, Werner and Le-Brun lean on Systems Theory to make the distinction between ‘complicated’ and ‘complex’.

A car engine is ‘complicated’.

Although to a layperson it may seem unfathomable, a car engine operates on cause and effect. Someone with the requisite knowledge could identify a reason why it isn’t working properly and fix it.

Traffic on the other hand is ‘complex’.

Because all of the individuals driving each car are thinking and acting autonomously, you can only try to guide and influence its behaviour. “A complex system is not causal, it’s dispositional. We can make informed guesses about what it is likely to do (its disposition), but we can’t be sure.

Complex systems are typically made up of a large number of interacting components – people, ants, brain cells, startups – that together exhibit adaptive or emergent behavior without requiring a leader or central control. As a result, complex systems are more about the relationships and interactions among their components than about the components themselves.” (Emphasis added)

Most organisations have been built for a complicated world, but the world we operate in today is complex.

The job of a leader moving forward is to obsess over improving the environment that allows your team to excel.

Rather than commanding, a modern leader trusts the team to work it out for themselves and helps the team remove “bureaucratic friction”, ensuring that everyone is crystal clear on the purpose of the organisation, whilst building the psychological safety necessary for robust experimentation and learning.

This approach requires humility from leaders, not ego, as they work to unlock the potential in others.

The big shift should occur in how you communicate; shifting from directing to questioning (just like you do with your client work). Your focus should be on learning from others, by listening without the need to respond, and fully understanding what the other person (your team member) is trying to say. (I recommend the work of Rebecca Timmins at When We Think if you need some help with this)

Leaders of the future will “understand that creating the conditions for success – and driving changes of mindset and behaviour patterns – is a far more effective and sustainable way to lead rather than trying to be the source of that success.” ⁴⁰

⁴⁰HBR article – Become An Octopus Organisation by Jana Werner and Phil Le-Brun

A final case study

Let me leave you with a final case study that embodies many of the ideas I’ve covered:

Nucor Steel:⁴¹

Nucor is the world’s most innovative and consistently profitable steel producer. As of 2023, it had 31,600 employees.

Radical autonomy
The culture at Nucor values contribution over rank, and innovation over compliance. They use a radical bottom up organisational model.

“We built Nucor under the assumption that most of the “genius” in our organisation would be found among the people doing the work.”
Former Chairman and CEO Ken Iverson

By contrast most other organisations assume the genius sits at the top of the business.

The company is a confederation of 68 divisions that operate independently but compete collectively. Individual divisions make their own decisions on procurement, products and staffing and are responsible for winning and retaining its own customers. Each division has its own P&L and they have access to realtime information from across the whole organisation.

This encourages internal relationships not just within teams in a location, but across different teams across the country, to share knowledge and constantly improve.

Bonuses are paid to teams not individuals and so team members have little patience for slackers. The bonus scheme operates almost like they own the business they run.

Instead of specialising in a specific task, team members are trained for a variety of roles. This gives them a view of the entire production process and helps them with solving cross boundary problems.

They also do commercial skills training for employees, as effectively they are running each location independently.

Nucor Steel’s model has been built to maximise creativity, competence, collaboration, commitment and courage. It’s these human attributes that produce extraordinary results.

Here’s a great example:
A team of steelworkers at their Blytheville, Arkansas plant conducted their own cost benefit analysis (not finance or engineering executives) and decided it was time to replace an ageing furnace shell (a huge bowl where scrap metal is turned into molten steel).

It was this same team of steelworkers (not the purchasing department) who solicited bids from potential suppliers. Unimpressed with the proposals they received the team decided to design the shell themselves and chose a fabricator to make it to their specifications. They provided continuous feedback at every step of the production process.

The result? A great new piece of equipment that cost USD$3M – one-tenth of the price of the external supplier bids.

Nucor does exactly the opposite of many modern business organisations.

They oppose the four foundations of bureaucracy:

Stratification: Nucor has few layers and there is no distinction between thinkers and do’ers.

Standardisation: Forced standardisation chokes off innovation and turns employees into automatons. Nucor lets every plant develop its own procedures and protocols. They don’t impose uniformity to make managing easier. Instead, they transparently share performance data across the company and have a shared passion for getting better. This leads to genuine innovation from the shop floor, not the R&D department or the executive suite.

Formalisation: Rather than using corporate staff groups like planning, marketing, sales, and R&D, Nucor relies on social networks. Coordination happens organically when teams identify a common interest. Coordination comes from collaboration not control.

Specialisation: Nucor team members are deeply skilled but also multi-skilled. Shared targets, cross-training, and malleable rules help them tackle boundary spanning problems that yield big productivity gains.

Whatever your business makes or sells its real business is growing human beings. At Nucor, they say, “We don’t build steel, we build people.”⁴²

^{41 & 42}Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary Hamel and Michele Zanini

CONCLUSION

The future of financial planning is still human.

“…technology alone doesn’t make organisations or jobs better. Cutting-edge tools can reduce errors and speed up workflows, but they do little to enhance job quality or worker empowerment. They may make organisations more efficient but seldom make them more courageous, adaptable, or inventive.”⁴³ (from Humanocracy)

I know that AI is in the zeitgeist. It’s the big new idea that everyone is obsessing over. My purpose in writing this paper was not to downplay AI’s significance, but to remind ourselves that while technology might change our lives dramatically (think: the printing press, personal computer, the internet, and iPhone) human creativity is still the most powerful force on the planet. And while tech will be tech, the only thing we can control in our businesses and our lives is how we adapt and respond to whatever emerges.

I’m hoping that my words have provided you with some inspiration and confidence to move forward, run experiments, and proactively tap into the creativity of the fabulous people in your organisation.

The case studies I’ve used throughout this paper are powerful because they are exceptions, not the norm. All of them are large companies with far more complexity than the business you run.

This should be a huge positive for your mindset. If they can build this type of business structure with 10s of thousands of employees, surely we can make these changes too.

☐ Can you become an exception in the profession of financial planning?

☐ Can you lead on this new way of structuring a business?

My guess is that only the very best will be brave enough to even try.

One push back I anticipate from those nearing the end of their career is that “I love the idea Brett, but I’m looking to exit in 3, 5 or 7 years.”

I’d love to challenge that thinking.

In boxing and other martial arts they teach participants to punch through the target for maximum effect. The same idea applies to your business goals. Even if you are leaving in the next 3, 5 or 7 years, your business needs a goal that punches through the target. That is, you can set a 10 or 15 year Big Hairy Audacious Goal (BHAG) for your organisation, even if you don’t intend to be there at the very end of it.

⁴³Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary Hamel and Michele Zanini

What’s In It For You?

Why would you even bother and what’s the payback if you focus on these difficult issues, attempting to radically change the way you manage your business, creating greater autonomy and transparency?

I think there are 3 biggies:

1. A new sense of wonder, excitement and challenge, in your career:

If the idea of playing it safe and treading water for the next few years until sale time makes you feel bored out of your brain, then why not try something new?

2. A business that builds its next layer of leaders:

You are going to need more depth in your leadership ranks, regardless of whether you are young and hungry and still chasing growth, or further along in your career and creating internal succession, or preparing to sell in the future.

3. A much higher sale value multiple should you wish to sell:

Additionally, you might also get your pick of roles in the new entity you sell into, because you will have done what they are aspiring to do.

I’ll leave you with the words of Gary Hamel and Michelle Zanini:

“Being a pioneer isn’t easy. There is no road map. The only thing that can guide you is your worldview about people, organisations and success.”

RECOMMENDED READING

If you are an adventurer and you want to pick up the gauntlet I’ve laid down in this paper, here is some source material to go and feast on:

☐ Humanocracy: Creating Organizations as Amazing as the People Inside Them by Gary Hamel and Michele Zanini

☐ Brave New Work: Are You Ready To Reinvent Your Organisation? by Aaron Dignan

☐ Reinventing Organisations (Illustrated Edition) by Frederic Laloux

☐ Outrageous Empowerment: The Incredible Story of Giving Employees Their Brains Back by Ron Lovett

☐ The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work by Teresa Amabile and Steven Kramer

☐ The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, Growth by Amy Edmondson

☐ Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great by Eric Ries

☐ American Icon: Alan Mulally and the Fight to Save Ford Motor Company by Bryce G. Hoffman

☐ HBR Article: The Workplace Psychological Contract Is Broken (Here’s How To Fix It) by Anne-Laure Fayard and John Weeks

☐ HBR article – Accountability Must Be Chosen, Not Mandated by Kendra Okposo

☐ HBR article – Become An Octopus Organization by Jana Werner and Phil Le-Brun

☐ HBR article, 5 Things High-Performing Teams Do Differently by Ron Friedman

☐ HBR article, How To Build A Superteam That Keeps Getting Better by Ron Friedman

☐ HBR article – The Feedback Fallacy by Marcus Buckingham