What’s the next level of success for you and your business?
I’m working with plenty of firms right now that have some ambition. If they’re in the £500,000 to £700,000 range, they want to get to £1m of revenue at good net profit margins. If they’re already doing £1m of revenue, they want to get to £2m.
You can’t just stand still. However, just growing by default without any focus is a difficult and slow way to move your business forward.
If you don’t want your new larger business to cause you and your team a lot of stress and hassle, you have to be thinking and planning well ahead.
Otherwise, all you're doing is constantly butting up against the next ceiling of complexity. That’s the situation you find yourself in when what got you here won’t get you there.
With some thinking and planning ahead not only can you grow faster, but you can enjoy yourself more along the way.
You have to work on a range of areas simultaneously to avoid getting stuck at a particular level. Running a business is like assembling a jigsaw; there are a lot of pieces to the puzzle and they all need to fit together.
One of the most obvious and yet most neglected of these areas is developing leaders in your business.
So what does developing leadership entail, and how can you do it well?
Developing leaders in practice
Firstly, let’s consider what the consequences of not developing leaders in your business will be.
If there are no other leaders besides you, everything has to come back through you.
Maybe it already does - in which case you will be the bottleneck. That’s a tough gig, especially as your business gets larger.
The alternative is to develop other people in your business that are capable of leading.
The management training firm Mind Tools puts it this way:
“According to the idea of transformational leadership, an effective leader is a person who does the following:
1) Creates an inspiring vision of the future.
2) Motivates and inspires people to engage with that vision.
3) Manages delivery of the vision.
4) Coaches and builds a team, so that it is more effective at achieving the vision.”
You can develop leaders in a range of areas within your business.
This may be by hiring a practice manager who can lead operationally. Alternatively, it may be by having someone take the lead in the advisory team, or in paraplanning, administration or compliance.
Remember, leadership has nothing to do with titles. It has everything to do with the four skills outlined above.
As an example, the leader of your paraplanning team can create an inspiring vision for what they want the paraplanning team to be/become.
They can inspire the paraplanners to engage with that vision; manage delivery of the vision; and coach the paraplanning team so they’re more effective at achieving the vision.
An alternative approach
Hiring potential leaders, or identifying and appointing them from your existing team, is one thing.
Yet your role goes much further than that if you are trying to build the leadership skills necessary to run your larger organisation in the future.
Roy Ballentine, of the award-winning US wealth management firm Ballentine Partners, says the business owner’s role is “to provide very effective mentoring for [your] rising stars.”
A lot of business owners have an open door policy, where the team knows that if they need help or have a question, they can go and see the owner.
Ballentine proposes an alternate strategy that he uses at Ballentine Partners:
Imagine you went to your future leader and said: “I’d like to allocate at least an hour of my time per week to you, indefinitely, and that time will be yours to use in any way you wish.
"My hope is you and I can use that time to help you advance your career. Your job will be to set the agenda. I may suggest some topics, but it would be your time to use as you wish.
"I want to do this for you because I believe you have real potential to go far, and I want to help you do that. If you like this process, we can continue this for as long as you wish.”
“That,” Ballentine says, “is very different from an open door policy.”
So, where will you find the time to provide this level of support to your potential leaders?
I don’t know, but you should find it.
And what if you don’t make that time? Or if you try to shortcut it? It's likely you’ll stay stuck on the hamster wheel to some extent.
It may feel like it takes more time to spend that intensive hour a week with a future leader or two in your business. And upfront, it is more time intensive.
But pretty quickly this step will allow you to let go of more and more in your business. You’ll be creating a role for yourself that sees you spending your time on the jobs that only you can do, and that you love to do.
Verne Harnish, author of Scaling up: How a few companies make it and why the rest don’t, sums this idea up nicely:
“To get to 10 employees, founders must delegate activities in which they are weak. To get to 50 employees, they have to delegate functions in which they are strong.”
Are you developing leaders in your business?
Let me know how you go.