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Find your purpose as a business and solve your people problem
“How do I find good people?” and “How do I retain good people?” are probably the two most common people-related questions owners of financial planning businesses ask. Followed closely of course by, “I’m having a nightmare with a staff member…” You get the picture. Financial planning businesses are no different from any other business. They are as good as their people enable them to be. So, no surprise that Simon Sinek, the author of Start With Why, says, “If you don’t understand people, you don’t understand business”.
Little wonder then that Mark Hurley of the US based business Fiduciary Network suggests that to “Recruit and retain the next generation of professionals” is the first of seven key steps needed to build value in a financial planning business. In his seminal book, Good to Great, Jim Collins reveals that the leaders of great businesses did not begin by setting a new vision and strategy, but rather “they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats – and then they figured out where to drive it”.
I’m sure you will agree then, that central to any financial planning business owners’ task of running their business, is the challenge of building an effective team or, in some cases, teams. No matter the size of your business, whether it is just you and one or two staff, or you and twenty or more staff, having an effective team is critical.
But what is an effective team? And how do you build one? Business often turns to sport to find insights into how to the answer this question. That’s why stars of successful sports teams often have a second career as a motivational speaker. They inspire businesses to do just what they’ve done. Set the goal. Train hard. Persevere. Train harder. And presto, you’ll get there in the end. Or perhaps not.
Team sport is in many ways so different from business. The rules of the game are clear. Each player’s role is defined. The boundaries of the playing field are immovable. There is a referee or umpire to control the game. And since the demise of timeless tests in cricket, there is a clear beginning and end to a game.
A financial planning business could not be more different.
In financial planning, the closest one comes to rules are laws like the FAIS and FICA Acts, which regulate the industry and provide guidance to participants. But these laws and regulations are not always as clear-cut as a foul or an offside offence. In many instances they are subject to interpretation. Witness the simple requirement of a Risk Profile in the FAIS Act. The debate continues about what this really means. While there is a FAIS Ombud, they are not like a referee monitoring every movement of each participant.
So while you do engage with compliance officers and report to the Regulator on a regular basis, the reality is that your team is playing a game every day that has no clear boundaries, no time limits, and no set playing field. Being ethical is a constant requirement, just as sport says no cheating. But how this gets played out varies dramatically from business to business. Unfortunately there is no “in” or “out” of competition drug testing. In essence the conscience and values of the business owner drive the ethics of the business.
Whilst sports do evolve, any changes that come about are well thought through, considered, and very often experimented with first. Witness Television Match Official replays as one example. And the largest sport in the world, soccer, has yet to introduce this change despite it having been around for many years.
In contrast, the business environment is changing constantly. Technology is evolving at breakneck speed. The Robo-adviser and Artificial Intelligence have arrived and are not going to allow business owners to take their time in deciding whether or not to implement new technologies. Mere survival will necessitate risk-taking, and in many instances, costly decisions. The consequences of these, only time will tell. Oh to be able to rely on a big brother like FIFA to make such decisions for you!
There is no doubt most business owners would prefer clearer boundaries. Defined playing times. A referee. A well managed (by someone else!) process to adapt to changing technology. This would solve many problems. Less stress. Lower burnout rates. Fewer cash crunches. And people problems? Well you just fire underperformers or transfer them. Simple. And pay lots to those you want to keep.
Perhaps solving people problems in sport is not quite as simple as this. But people are the one very clear common factor that business and sport share. Despite all the boundaries and rules, sport does depend on the force and frailties of people to make its theatre entertaining. Witness the drama of the “manager” in European Football. The comments and behaviour of managers, pre, post and in-between, games gets as much media attention as the games themselves. But perhaps this particular arena is not the best one to learn people lessons.
The most successful sporting franchise of all time from a performance perspective is the All Blacks – the New Zealand national rugby team. At the heart of their ethos is the belief that “better people, make better All Blacks”. James Kerr has documented the success of this franchise and the lessons that business can learn from the All Blacks in the book Legacy.
A key insight from the All Blacks’ experience is that a “winning organization is an environment of personal and professional development, in which each individual takes responsibility and shares ownership”. But in a world where the Manager or Coach is all powerful, how did the All Blacks get individuals to take responsibility and share ownership? One way was to provide a sense of purpose that went beyond winning. “Leave the jersey in a better place” is a key purpose for each All Black. This talks not only to results, but also to how you played, how you behaved, what sort of person you were as an All Black. If the purpose were simply about winning, the ability to build a culture of leaving a legacy would be strangled weekly, depending on that week’s results.
Daniel Pink in his book about motivation, Drive, suggests that Purpose is one of three key drivers for people to perform in their jobs. The other two are Mastery and Autonomy. In the same way as the All Blacks’ purpose is not just about winning, so too, in business, the purpose cannot just be about money. Management guru, Peter Drucker talks about the purpose of a business as “To create a customer”. Profit is simply the score of how well you do this.
In order to find their overarching purpose, Simon Sinek encourages businesses to answer the question, “how can you help the human race?”. Jim Collins in his book Good to Great asks slightly easier questions: “What are you passionate about? And, what can you be the best in the world at?” All these questions fall under the umbrella question, “Why do you do what you do?” Simon Sinek suggests that this is the question businesses don’t ask themselves enough. And Kevin Kerr suggests that by answering this question the All Blacks were able to play with a purpose that transcends simply winning and yet enabled them to build the greatest sporting franchise in the world.
When David Packard, co-founder of technology company Hewlett Packard was asked by Jim Collins what he was most proud of in his life, he responded that “I’m probably most proud of having helped create a company that by virtue of its values, practices, and success has had a tremendous impact on the way companies are managed around the world”. The “HP Way” reflected a set of core values, which made the company distinct, particularly the deeply held belief that profit is not a fundamental goal of a business. Collins argues that great businesses have a guiding philosophy or a “core ideology” which consists of core values and a core purpose – a reason for being that is beyond just making money.
In this ever-changing world people are more than ever looking for purpose in their lives. If Sinek is correct that understanding business is about understanding people, then in order to recruit and retain the next generation of professionals, or simply getting the right people on the bus, finding your purpose as a business is key. If you believe it is simply to make a profit, you are likely to have constant people challenges. Finding a core purpose that “helps the human race” is surely the cornerstone for building an effective team. That way you are bound to attract and keep the type of people who will help you solve any people problems you may have.
Jim Collins, Good to Great, Random House, 2001
James Kerr, Legacy, Constable, 2013