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Creating an Operational Playbook

Rather than viewing this effort as required drudgery, envision it as a prelude to transformational innovation.

How well-documented are your firm’s systems, policies and procedures?

Putting in the work in this area is indispensable ... and also a big pain in the tush. But does it have to be?

What if, rather than conceiving of this effort as required drudgery, we envision it as the prelude to transformational innovation? After all, it’s hard to make effective change if it’s unclear where you’re starting from. Yet, successfully- and well-mapped, a firm’s operational playbook can be the key to a much brighter future.

One way to think of this is in the terms that small business guru Michael E Gerber uses in his book The E-Myth Revisited: our firms’ operational playbooks are essentially the written form of “how we do it here,” and will be as unique as each of our organizations is.

Essentially, then, fully documenting how we run our business is an exercise in what I like to call ‘mapping the known world.’ Implicit in this framing is that there are potentially fertile territories beyond those with which we’re currently familiar that offer boundless opportunity if we position ourselves and our firms to take full advantage of it.

Do you want to grow your organization? In what ways and by what methods?

These questions are far easier to effectively answer if you know where you’re starting from. Just as with the financial planning clients you serve, after a reasonable (though not necessarily complete) discussion of their vision, the very next step is to figure out where they’re starting from so that you can help them map the path from where they are to where they want to be. So, too, with your own business.

Another benefit of documenting your firm’s systems, policies and procedures well is that, in the process thereof, you’ll be able to assess the strength of each of these elements of your business. In fact, it’s likely that in the course of this documentation process, you’ll identify one or more areas that need immediate attention. Thereafter, equipped with a thorough understanding of your firm’s unique business model and process, you’ll be well-positioned to answer another important question: How do we change it here?

Among the most profound of what I believe to be the myriad incisive Best Practices that Gerber’s E-Myth Revisited offers is this question and a suggested approach to answering it. The reason that I came to value this insight so greatly is that, as I reflected on it, it occurred to me that while we’re likely to be more intuitively clear about the need to document our firms’ systems, policies and procedures, we’re less likely to have as much clarity about how we should go about changing them.

By committing ourselves to a disciplined, thoughtful process for how we evolve our organizations, we greatly increase the likelihood of more successful outcomes … just as we do when we guide our clients through the financial planning process.

So, what is, or should be, the innovation process for your firm?

If you don’t yet have one or want to enhance yours, I highly recommend that you review Gerber’s suggested approach. Along the way, you’re virtually guaranteed to be exposed to many other powerful insights and opportunities in the book.

One last suggestion about this discipline of documentation and innovation: remember that it’s just that, a discipline. Accordingly, in order to enable your firm to leverage this practice fully and maximize its impact, as a firm leader, you have to invest time in it consistently. I can’t say whether that’s a few hours a week or one day a month or a couple of days at a semiannual, off-site retreat, but I do know that you need to have this answer. The good news is that any and all of these different approaches will work if you pursue them in a consistent, disciplined way.

Now comes the hard part: actually doing what you know you need to do.

This effort, too, will require an allocation of your time, preferably as soon as possible. Figure out how long it’ll take you to assess the state of your organization’s operational playbook as well as to map out a process to optimize it in preparation for the commitment to a disciplined, perpetual effort to evolve it. Then schedule this time, which means not just to add it to your To Do list but actually block it out on your calendar. And, of course, when this time comes, be sure to evidence the discipline to do this critical work.

So, let’s end where we began: how well- and thoughtfully documented are your organization’s systems, policies and procedures? Add to this clarity about the process you’ll follow to evolve them and you’ll have a powerful strategy and plan to realize your firm’s potential fully in the near term as well as the long run. Then, just as with the financial planning clients you serve, it’s up to you to execute your plan in a disciplined, thoughtful way and to adapt it as circumstances warrant.

Having a roadmap to your firm’s brighter future will enable you to enjoy walking this path that much more.

Walter K. Booker is the chief operating officer of MarketCounsel, a business and regulatory compliance consultancy for investment advisors.

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