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Your Practice's Critical Path

Orlando: "I really work with a good group," said John during a break at a recent rainmaker weekend. "But we always seem to be playing catch-up, and it's interfering with my rainmaking."

Orlando: "I really work with a good group," said John during a break at a recent rainmaker weekend. "But we always seem to be playing catch-up, and it's interfering with my rainmaking."

Sound familiar? John is not the only one facing this challenge, nor is it unique to financial advisors. When your group is not at the top of its game, you need to prioritize activities, realign roles and responsibilities—creating time-lines for completion of every project—and make certain that all workflow is linked to the completion of the specified project. In business school parlance, this is often referred to as "work breakdown structure."

In the late 1950s, in a joint venture between DuPont and Remington Rand for managing plant maintenance projects, a team of engineers developed a mathematically based algorithm for scheduling a set of project activities. It quickly became known as the Critical Path Method.

Although this methodology is very complex, we have borrowed the concept, simplified it by eliminating the complicated math, and used it to "frame" goals and workflow. If you want to simplify it a step further, consider it a fancy way of prioritizing—linking activities to goals.

However, it has been our experience that when this concept is over-simplified, not all activities—whether performed by support personnel, yourself, a junior advisor or an intern—are linked to your goals. Hence John's dilemma. So let's take a serious look at how we frame this methodology in our coaching, both for teams and individual practices. I break it into five steps…

Your Critical Path

Step 1: Clear Identification of Goals - Consider this a project assignment that must be completed over a specific timeline. For example, you might think of annual goals in terms of:

  • Revenue
  • Total Assets
  • Net New Assets
  • Number of New Ideal Clients
  • Affluent Loyalty (client retention)
  • Bandwidth (total number of current clients)
  • Service Standards (two models; platinum and gold)
  • Percent of Business that is Fee-Based

Step 2: Working Metrics Scorecard - Here you want to break step one (your annual goals) into quarterly projects. The idea is to create a system than enables you to carefully monitor your progress. You will use this scorecard in step five.

Step 3: Clear Roles and Responsibilities - This step is critical, dependent entirely upon the first two steps being taken very seriously. In this step you directly link the activities of every individual in your practice or team to the Working Metrics Scorecard (which in turn is linked to your annual goals).

Step 4: Individual Accountability - At this stage, you have created a framework for the workflow within your practice, your critical path. But you need to examine your expectations. It has been my experience that when first introduced to the Critical Path Method, most financial advisors and support personnel tend to embrace it with good intentions. Nevertheless, the inclination is to fall back on their old ways. This is especially true when it comes to delegation, and serving smaller clients.

Step 5: Critical Path Method Update - Now you are ready for your Working Metrics Scorecard review. We recommend applying this step quarterly. It is usually obvious how well you're tracking towards your goals: Either you're on target, or you're behind (unless you are, miraculously, ahead). At this stage it is important to revisit every aspect of the inner-workings of your practice. The objective is to make certain every task, every activity of every team member, is linked to the successful accomplishment of your project: meeting your annual goals.

For example, your update might include:

  • Project Status - determining where you are relative to each of the goals established in step one (Working Metrics Scorecard review).

  • General Distractions - regardless of your project status, you want to identify any general activities or events that might have pulled your practice or team off track. For instance, you want to recall any industry meeting that wasn't relevant, wholesaler activities, recognition trips, client events, etc. Once recognized, measures must be taken to prevent any recurrence.

  • Individual Accountability - you are not getting the best effort from a dedicated support person if he or she continues to stray off your Critical Path. Each individual role, corresponding responsibilities and associated activities should be reviewed. This frequently requires letting go of tasks that are no longer a priority. Change is difficult and old habits are hard to break, but accountability for staying on this Critical Path is essential.

Now, back to John: The core of his problem was a controlling nature. He was very uncomfortable delegating. Hence, he had never really segmented his client base so it could fit into two levels of service. Naturally, this trickled down throughout his support staff. Things weren't getting done in a timely manner.

It is always interesting to note what motivates people to change. John is now working on step one, and is committed to establishing a Critical Path for his practice. Why? Because now he's committed to capitalizing on his rainmaking abilities.

For help in organizing your practice, download a FREE copy of our Critical Path Organizer. Also, we're now offering our Rainmaker Best Practices Research for those who participate in our 2008 Attracting Affluent Clients Survey.

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one. If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].

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