When owners of indepen- dent advisory firms want o increase their revenues,
they typically look to add another advisor or two to help them handle a rising
number of new clients.
More often than not, though, this
approach works until it doesn’t. Good
advisors are expensive, especially in
today’s environment. This means that
those additional revenues are, at least in
part, offset by additional costs.
Plus, even the best advisors usually
take a while to reach their full capacity in a new working environment.
Having more advisors also increases
the workload of support staff, while
changing the culture of the firm — all
of which can lead to cost and time
increases and further demands on
management, as well.
Consequently, when owner advisors
come to us looking to add to their pro-
fessional staff, I usually try to redirect
their thinking by asking: “If you had to
double the workflow in your firm, with-
out hiring any more people, how would
you do it?”
The response usually is: “We can’t do
it.” To which I say: “Do you really know
you can’t do it, or are you simply assum-
ing that you can’t because you’ve never
tried?” The latter, as you might expect,
is almost always the case.
SHAKING IT UP
We all get set in our ways. That’s even
more true for small business owners
who get attached to the processes and
activities they’ve relied on to grow their
business to its current point.
The business school term for the
solution to this problem is “organiza-
tional design strategy.” It means figuring
out ways to change your business to be
more efficient and more profitable with-
out hiring more people and increasing
For independent advisory firms, organizational design strategy frequently
means finding ways for advisors to work
with more clients — and to generate
more revenues. However, this must happen without increasing overhead and
other costs or slacking on client service.
Despite most owners’ resistance, this
isn’t really that hard to do.
There are some pitfalls to avoid. For
instance, advisors might think that adding clerical support staff would free up
advisors to work with more clients.
But remember, my advice is to not
increase your overhead. (This also
means not adding new partners, marketing programs, technology and services.
Simply put, it’s using your brain instead
of your pocketbook to grow revenues
In most cases, increased support rarely pays for itself. Each new hire usually
means losing capacity in the short term
and sometimes even in the long term.
This is because adding new staff tends
to hurt the average productivity of your
employees. And, of course, overhead
costs go up at the same time.
The alternative is having a strategy.
We often suggest that owners and
their advisors look for ways to deliver
services to clients more quickly and
easily — that is, “more efficiently” —
before they hire a new employee.
While there are hundreds of ways to
do this, here are some starting points:
Specialize. In many firms, each
advisor is “a jack of all trades.” He or
First, Do No Hiring
Firms that want to grow revenues — and profits — need to do more than
bring on more people. Here’s how your team can be more efficient.
We get set in our
ways. That’s even
more true for small
who get attached to
the processes and
activities that have
grown their business
to its current point.
THE FAST TRACK
By Angie Herbers