Fundamental 4™ 101: Human Element
In Part One of this quarterly series, Andrea Lopez-Schlapia breaks down Ironstone’s practice management blueprint, the Fundamental 4™.
First Up: The Human Element.
To really determine the “pain points” in a firm, I don’t ask, “What’s working and not working at your practice?” That’s too open-ended a question. Instead, I evaluate the business through the lens of the Fundamental 4™, an approach I created using 32 line items of practice management (four key categories with eight additional subcategories). When I share the Fundamental 4™ graphic at conferences, it’s the slide that everyone takes a picture of. Why? They say, “That framework makes it so easy for me to look at my practice in a clinical way.”
The Human Element is frequently the number one issue that brings clients to Ironstone. This category is all about talent: Recruiting, maintaining, retaining, and growing your team. It covers questions like, “How are you getting the right people ‘on the bus’? What ‘seat’ are they in? What’s the outcome of your efforts to develop, improve, and help your talent thrive?” It’s also about defining individual and team expectations based on skill sets to create a more positive culture and ensure that everybody’s on the same page.
It sounds simple, but it’s not, especially if the owner of the firm hasn’t clearly communicated each team member’s roles and responsibilities. Or if they’ve hired somebody they like before figuring out what they’re going to do with them. This random staffing method can have a toxic impact on an office: Often, by the time I arrive, the practice is “broken” by low morale, high anxiety, employees who hate each other or don’t understand the job each person is supposed to perform.
In some firms, team roles are bifurcated. One person does the account opening, another does the marketing, but there’s really no back-up if somebody leaves. The employees work like an assembly line instead of a cross-trained team. Charged with getting to the root of the problems facing a practice, I’ve found that about 99% of the time, it comes down to a lack of clearly defined roles. That’s why I start by conducting confidential employee interviews and practice analysis to uncover gaps and patterns.
In other cases, a client may think their problem is that they don’t have a business plan, but actually, they have a Human Element problem caused by ambiguous direction or abdicated leadership. To help get the most out of employees, I assess each person’s capabilities, and ask owners hard questions, like “Are you in the correct business model? Because here are the fractures in it. Right now, you’re not a leader. You’re a taskmaster heading a team that’s reactive, not proactive. They wait for you to tell them what to do because they’re not sure what their role requires.”
Few financial advisors get into the business because they want to manage people or run a firm with a CEO mindset. But when their company evolves to a new level of success, I tell them, “Look, instead of just recognizing that practice growth demands new hires, you need to create an actual job profile and description. Then create task lists of what each person will be doing daily, weekly, monthly, quarterly, yearly, and as needed. Finally, hold quarterly performance feedback meetings with every employee to stay on top of issues that might arise.”
Yes, it’s a lot of work, but you can’t afford to skip this step. After all, isn’t your practice worth it?
UP NEXT: The Operational Effectiveness element of the Fundamental 4™