Russell Story learned his lesson the hard way.
About a year ago, he decided what his Douglas, Ga.-based practice needed was a new financial planning program. The old one, in use for about five years, he felt, was slow, cumbersome and generally out-of-date.
Only, Story still remembered just how difficult it had been to introduce new software in the past. Some years earlier, for example, he’d asked his four assistants to start using a different customer relationship management (CRM) program. But, perfectly satisfied with the status quo, they had seen no reason to go through the time-consuming inconvenience of implementing a new program—and had taken more than six months to get it up and running. “I had tremendous resistance,” says Story, whose practice has about $60 million in assets.
So, this time, Story took a completely different tack. First, he found three promising choices. Then, over a regular staff breakfast meeting, he laid out the reasons he thought they needed to make a switch and how it would help the office. Over the next six weeks, his assistants evaluated the possibilities and ultimately decided which one to adopt. Result: According to Story, it took less than three months to start using the new system—and his staff was happy to do the job.
You know what they say: The one constant is change. That said, there’s another eternal truth: The one constant about change is that people hate it. And since your employees undoubtedly are people, you can expect that they, also, feel uncomfortable when facing the prospect of a disruption to their routines. But that can make it very difficult to try to introduce changes, large and small, into your practice. We’re talking about anything from a new CRM system to an all-out revision of strategic direction. Making matters even trickier, according to Daniel Crosby, an organizational psychologist in Huntsville, Ala., who specializes in change management for financial advisors, the natural inclination for many results-oriented advisors is to move at top speed, completely ignoring the time-consuming spade work they might need to persuade their staff to get on board.
Trouble is, if your employees don’t embrace whatever change it is you want to introduce, you can forget about it: You won’t succeed. “Trying to make a change without staff buy-in is a recipe for disaster,” says Crosby.
It’s a particularly crucial issue now, because, according to such practice management experts as David Lee, director of practice management for Raymond James Financial Services, advisors are trying out all sorts of changes in their practices. “The last two years or so have been a wake-up call for a lot of people, who realize they need to change everything from their software systems to how they market,” he says. According to Lee, to meet that need, Raymond James recently launched a series of two-day workshops to help advisors with change management. One requirement is that they come with the rest of their team.
Still, introducing change is quite doable if approached with sufficient finesse and patience, as Story discovered. “Change is a process,” says Crosby. Understand what’s involved and you, most likely, can make just about any change stick.
First place to start is a reality check. That means acquiring an understanding that you and your employees might regard a specific change very differently—and that you need to respect their point of view. “What you see as a big change probably isn’t the same as what they see as a big change,” says Philip Palaveev, president of Fusion Advisor Network in Elmsford, NY. Example: Replacing your financial planning program might seem relatively minor compared to, say, reshaping your strategy. But for the employee working with the software every day, it’s a very significant disruption, indeed.
You also have to consider your past record. You might have a history of introducing, for example, new types of reports periodically, only to discard the system du jour in favor of a new one a few months later. Or perhaps you failed to provide enough resources to get the job done in the past, thereby stretching employees too thin. In that case, you can expect an extra amount of skepticism. “Employees figure, ‘Why should I buy into this change if I’m pretty sure it’s not going to happen?” says Lee. For that reason, he recommends asking employees to fill out what he calls a “plan failure review form,” with which they can describe past attempts and why they didn’t work. Then, hold a meeting aimed at allowing staffers to air their grievances and propose more workable solutions.
Like any sale, however, introducing change ultimately is about convincingly demonstrating the benefits of whatever you’re pushing. In other words, you need to show employees how the move will help them and the practice do better. “When people are well-informed and understand the decision, change is much easier,” says Palaveev. In some cases, that might take some doing—but the effort is essential.
Take Mark Snyder, who runs Mark J. Snyder Financial Services, a nine-employee practice in Medford, NY. For the past two years, he’s been talking to his key administrators about starting a client advisory board, which would provide insights into services and potentially provide referrals. Only, according to Snyder, his staff hasn’t liked the idea. Since he’d need them to help organize and facilitate the meetings, he knew he’d get nowhere without their buy-in. “If they’re negative about it, it won’t work well,” says Snyder, whose firm has $200 million in assets.
Recently, however, he came across a CD about advisory boards that he gave to selected staffers. It did the trick, providing a convincing rationale for setting one up, as well as helpful advice for how to go about doing it—and Snyder is now in the process of establishing a board.
After you’ve made your case, then you have to persuade employees they have a stake in the outcome. And you do that by, as the jargon goes, getting them to assume ownership of the change. Best is to identify the people directly affected by the change and incorporate them into the decision-making process. If, for example, you want a new financial planning system, then, like Story, you need to talk to employees who use the current one about how they like it and ask them to test the new software out, perhaps also having them do the research to select potential options. “You make it not your project, but our project,” says Palaveev.
The more ambitious the change, the larger the number of people you’ll need to involve in the effort and the more elaborate the process will be. Take Sheila Hines, client services manager for an Atlanta-based Raymond James Financial Services affiliated practice with about $450 million in assets. Last year, the management team realized that the practice needed a significant overhaul—everything from a proper management and organizational structure to better ways to assimilate new clients. After working with a coach suggested by Raymond James, they decided the transformation was so big, they needed to get all 14 employees involved. So, instead of holding a discussion at the usual monthly meeting, they closed the office for business and divided the staff into three groups—management sprinkled throughout each team, so no one unit had too many top honchos. Then, each group created a proposal for an organizational chart.
Since they all ended up with pretty much the same model, they then went back to work to try out the new structure for two months. All the while, however, Hines checked in with the staff during weekly meetings to see how they thought things were working. “If they didn’t feel there was the opportunity for feedback, then the change wouldn’t be accepted,” she says.
One month later, the staff met again, this time to design a model for service teams. After that, they put in place new work flow processes for existing and new clients and for financial planning. According to Hines, thanks to the new systems they’ve put in place, the firm has been able to increase the amount of assets from existing clients, although she can’t say by how much.
By getting employees involved in the decision-making process, you also can save time in unexpected ways. While investigating which financial planning software to choose, for example, Story’s employees took part in training demos for all their possible choices. According to Story, that helped them hit the ground running once they made the final selection.
According to Story, perhaps the most essential element to getting employee buy-in is patience. “It took close to two months to evaluate those programs and discuss it with the staff,” he says. “But it was time well spent.”
That’s something Janice Thompson of Strategic Financial Solutions in San Diego also learned in a painful way about two years ago. In 2008, seven years after launching her six-team-member practice, Thompson
realized that the firm was on an unsustainable growth path and she enrolled in one of Securities America’s year-long coaching programs to help her get back on the right track. After every session, Thompson would return to her office and immediately begin introducing whatever new idea she’d discussed with her coach.
Finally, three months after the coaching was over, Thompson realized the hard truth: She’d moved too fast and many employees were implementing the changes reluctantly. For example, some employees balked at one aspect of Thompson’s new strategy, eliminating unprofitable clients who were long-time accounts. Like Hines, Thompson pulled her entire staff away from the office for two days, so they could discuss the changes in a considered, orderly way. After that, according to Thompson, the staff went back to the office, ready to make the changes work. She says the new systems she’s put in place have allowed her staff and herself to work fewer hours. What’s more, revenues are up 10 percent from the year before.
One useful tool for figuring out just which employees are likely to be most resistant and how best to deal with them is to have your staff take a personality assessment. Lisa Kirchenbauer, who heads Omega Wealth Management, an Alexandria, Va., firm with $65 million in assets, gives all prospective hires the Kolbe assessment, which rates people according to how they take action and make decisions. Part of that evaluation, however, also includes reaction to change. Kirchenbauer, for her part, tends to hire people who score low on the “Quick Start” category—meaning they don’t like change, among other things—to balance out her own tendency to embrace new efforts just for the sake of shaking things up. She also knows, thanks to the assessment, that many staffers need a lot of detail, research and analysis. With that information, she’s been able to approach her employees about changes in a way she knows will be effective.
Kirchenbauer also understands there’s another value to being surrounded by change-resisters: Her employees’ reactions have been known to make her reassess her plans—and realize they weren’t such a great idea, after all. For example, recently, she toyed with the idea of introducing different service models and fees for clients. After talking to one employee, she realized she needed to go about it much more slowly than she’d originally planned. “It can turn out your idea was hair brained,” she says. “This is a way to find that out.”
It’s also possible that, occasionally, a change just isn’t worth the effort. Two years ago, Snyder considered moving his office to a location closer to his own home. Trouble was, most of his employees lived five or 10 minutes away from the existing office—and let him know they weren’t pleased. “I got a completely negative reaction,” he says. “And I could see it would affect the morale of the whole office.” Snyder decided to stay put.