Creating a high-performing wealth management team requires a significant amount of good old subjective judgment, but that doesn't mean objective measures are of no use.
In fact, through our ongoing research into what makes for successful advisory teams, we identified 15 criteria that are statistically significant indicators of high performance — that is, factors consistently present in high performance teams, but not in others.
We separated these into two categories: One containing 14 elements and another containing just one — the big kahuna of high performance teams, Effective Team Leadership.
Let's start with the big group. The first 14 elements common to high performance advisory teams are these:
A well-defined business plan fully supported by team members.
Personal objectives subordinated in order to achieve common goals.
A well-defined team compensation agreement that provides each team member with his desired growth potential.
Satisfaction with asset total and annual production growth.
Common values for work effort, work quality and ethics.
High trust level among team members.
Making certain the right person is doing the right things.
Determining the team member(s) responsible for new client development.
Ensuring each team member always knows what is expected of him.
Having qualified people providing the financial planning, advisory and wealth management services.
Having a well-defined approach to providing financial plans.
Taking a positive approach to problem solving and mistakes.
Creating an environment where everyone feels like he is growing as a team member.
Have fun working together.
The most common framework for team development originated with Dr. Bruce Tuckman of Ohio State University in the 60's. He established four stages of advisory development — Forming, Storming, Norming and Performing — and by examining these four stages, we can demonstrate where each of the above 14 criteria fits in the development process. As these pieces fall into place, the role of the team leader comes into clearer focus.
The Forming Stage
Team members are usually excited about becoming a team. At the same time, they have questions about the team's purpose. At this point, the team needs to be leader-directed. Everyone needs clear assignments and accountability for day-to-day results. Several of the 14 key criteria should be addressed in this early stage:
The business plan: The team leader provides vision and defines the structure, but team members need to express their opinions and consensus about goals.
Compensation agreement: Make certain the agreement incorporates acceptable growth potential for all team members.
Team values: Effort, quality and ethical standards need to be clearly established, and the team leader needs to lead by both example and words.
Responsibilities: This is the time to begin an inventory of team members' experience and abilities and to determine who will take the lead in new client development.
Many problems encountered later can be traced back to failures in the forming stage, which usually lasts between 14 and 60 days. Unbridled enthusiasm for the team's future can cause everyone, including the team leader, to gloss over important areas.
The Storming Stage
Subordinating personal goals to group goals is easy to talk about, but hard to execute. As such, enthusiasm can quickly fade as resistance, negativity, ambiguity and interpersonal conflict emerge in the formation process. Remember, however, that this stormy stuff is predictable and natural.
At this stage, the team leader must shift to a hybrid mode: Team members need direction and accountability, but they also need a leader who listens, referees interpersonal conflicts and bestows recognition and appreciation for a job well done.
Team values: The team leader must help team members solidify their commitment to group norms, especially those having to do with work effort, work quality and ethics.
Right person doing the right things: By recognizing and reinforcing individual abilities, the team leader can help distribute responsibilities more effectively.
Win-win approaches: The team leader must model and motivate, replacing blame-throwing with problem solving.
Embracing team goals: Ongoing discussions of team goals help keep team members looking forward and also help them work past any conflicts they might be encountering.
I've seen the storming stage last anywhere from a several weeks to several years. Team leader effectiveness makes the difference.
The Norming Stage
Daily activity is increasingly integrated and characterized by cooperation. Team members are discovering they can accomplish more working in concert than pursuing individual goals.
The team leader continues to coach individuals who need it, but as the team moves through this stage, he shifts from directing to facilitating daily activity. That shift occurs as the following criteria are addressed:
Doing the right things: Having become familiar with each member's abilities, the team leader can make certain the right person is doing the right things. This is especially important with new client development.
Clear expectations: Some of this comes from the systems and procedures the team develops; much of it is intuitive.
Wealth management services: Help the team make certain it has the right expertise to meet all the financial needs of the clients is has targeted.
Financial plans: Good financial planning leads to more assets. Simple as that.
Personal growth: In part, growth is a natural outcome of the above. In addition, you should help each member establish a personal growth plan.
The norming stage typically takes four-to-six months. A team cannot initiate these criteria while in the forming or storming stages. Yet, an inexperienced team leader might easily assume they have reached norming simply because problems have been temporarily swept under the rug.
The Performing Stage
When I ask team members to describe their team experience at this point, they tend to talk about things described in the 14 criteria listed above. But most important, they recognize they've become a high performance team. They are collectively satisfied with the asset and production growth of the team.
They share the same values for work effort, work quality, ethics and other matters — and they can tell you what those values are.
They truly trust each other.
They have created an environment in which each team member feels he is growing as a team member.
They have fun working together.
The team leader's style has also changed, but not dramatically. He continues to facilitate daily activity, leaving the direction to team members. However, the coaching dimension has shifted more to a mentoring role for individuals who want that type of relationship.
The challenge, then, to all you would-be team leaders is to determine your team's stage of development, adjust your leadership accordingly and skillfully lead your team to higher levels of performance.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients.