The United States is increasingly coming out of lockdown as more of us get the COVID-19 vaccine. Your clients are starting to shop, travel and live a little, and hopefully so are you. Optimism is in the air.
But as we begin to put the pandemic behind us, we should bear in mind that it’s normal for transitions, even positive ones, to be bumpy. For financial advisory firms, part of moving into a post-pandemic world will be revisiting business practices, strategy and vision in light of all that we’ve learned in the past year and a half. Don’t be surprised if the bumpy topics include retention of, and compensation of, your people.
The pandemic has sparked a wave of soul searching, and for many it has awakened a desire to do more, to do better for themselves and their families, to make a push for success as they define it. For some, that might mean breaking away from their current advisor firm to form their own business. With advisor-firm valuations at all-time highs, the siren song of entrepreneurship is loud and clear.
So as you prepare your organization to move forward into the post-pandemic future, the question you may end up asking yourself is “what’s the best way to hold on to talent?” As you consider this question, understand that you may be looking at a fork in the road for your organization. And the direction you choose could determine how successful your firm will become post-pandemic.
So let’s take a step back and look at what makes people stay with, or leave, an organization. Let’s start with what they want. We humans usually define success based on one or more of the following three things:
- Money. Financial reward is a way to quantify importance within an organization and how successful they are compared with others in our social circles. It’s the most commonly sought reward.
- Achievement. Some crave titles, big goals, the corner office or plaques. They want clear recognition of their accomplishments in whatever form that takes.
- Service. Some define success as helping other people. That’s an admirable idea, but too often this manifests as taking on more tasks in the service of others. And often it’s not the kind of busy-ness that helps an organization truly move forward.
As business leaders, we must know and understand our people well. Part of that is understanding which of the three common motivators drive them. But while it’s important to recognize these motivators, you must not let that information get in the way of your mission: to lead your organization toward its most important long-term goals.
And this brings us back to revisiting your vision for your firm. Especially during the day-in and day-out grind of work from home over the past year and a half, many leaders have rewarded and motivated their people by feeding their need for money, achievement and service. Extra duties have been assigned, raises have been handed out, titles have been bestowed.
And now, with advisor turnover being the highest it has been in recent years, the issue of retention moves to the forefront. As a result, you might be tempted to use more of those same rewards to keep your people from leaving. Be careful here -- and think of your firm’s future first and foremost.
Giving team members what they desire, whether it’s related to achievement, money or service, must be aligned with the strategic vision for your organization. To hand someone a job title to keep them happy, as opposed to them earning the title or truly fulfilling a meaningful role, is to let the tail wag the dog.
Giving your people more responsibilities in order to make them feel fulfilled can feed a culture of busy-ness, where you’re adding unnecessary complexity without moving the organization forward. Paying your people more just to keep them content likely won’t make them achieve more, and the truth is it won’t make them content either: After a while, they will get the itch to ask for another raise, and then another.
In short, placating your people with money, achievement or responsibilities won’t help your organization achieve its potential. It will make management much harder and it will only move the business sideways. The best way to keep your people engaged and satisfied over the long term is to stay focused on achieving your vision for the organization.
The good news is that doing so can inspire and bring the best out of our teams. As leaders, we need to recognize that people respond to deeper sources of motivation. Most of us yearn to be a part of something that is larger than ourselves. And that something can be an organization that is growing into its full potential.
The best leaders are clear on their organization’s strategic vision and its purpose in the world. They explain it to their people in a way that inspires them and causes them to buy in. True satisfaction comes when members of a team, through a group effort, achieve clear progress toward the organization’s vision. And those more tangible, short-term rewards—money, achievement, service—will flow naturally from the firm’s success.
As the country starts to reopen, now is a good time to revisit your firm’s vision and update your strategic plan, even if you’ve traditionally done so at the end or beginning of the year. Big changes have occurred in the way we do business: Some cultures have gone virtual, and some have implemented a hybrid approach. Some organizations have added services and reinvented themselves more deeply. Some organizations have built deeper, more robust technology. We’re at the start of a post-pandemic world, and it’s time for leaders to decide which changes will go and which will become permanent.
As you do your visioning and strategic planning work, think about advisor retention in a long-term framework that aligns with where you ultimately want to take the business. Make a clear-eyed evaluation of your team members. Are they still willing to support and work to achieve the firm’s long-term vision? Or are they preoccupied with short-term rewards?
Resisting the impulse to use money, responsibility and titles or other perks to retain your people can be hard, especially during times of crisis or times of transition. But in the long run, clinging to team members is unhealthy. My observation over many years consulting the business of financial advice is that no culture truly thrives if it’s fighting a short-term battle to win or retain talent. The best organizations let those who want to leave go without resentment or regret. If we focus on appeasement, we only create complexities that will ultimately confuse the culture and distract our people from the vision we’re working toward.
So rather than focusing on the immediate risk of turnover, design and create a culture that will attract and retain good people for the long term. You will find that people who are in the industry for the right reasons will self-select themselves into an organization with a clear, positive vision. Motivated by a desire to be part of something larger and more important than themselves, they will make stronger decisions for the business.
As your organization thrives, money, achievement and responsibility will flow naturally as consequences.
Angela Herbers is the founder and CEO of Herbers & Co, a consultancy firm for financial advisors.