Nothing is more crucial to a business than development. Stableford Capital knows this all too well and in our ongoing leadership series, we’ll look at both business growth and personal financial development. The focus of this article is how and why to develop leadership within a company.
In a recent Gartner CEO and Senior Executive Survey, CEOs of medium to large companies list growth as the top strategic priority. Yet another survey from The Telegraph reveals that one in three businesses doesn’t know how to grow.
While sales and client development are important to keep the doors open, leadership development is the key to a strong culture and sustainable growth. At Stableford, we choose to develop our leadership, and this benefits everyone, especially our clients.
Leader vs. Manager
First, what makes a leader, and what is the difference between a manager and a leader? Think of an operations manager – organized, tactical, and focused. They are skilled at thinking on their feet to react to changes and plan around key metrics. A manager motivates and holds a team accountable. A management role can be trained.
Then think of a leader as the heart and soul of the organization.
While encompassing many of the same traits and tasks of a manager, a leader excels in thinking about how things could be different, communicating goals, inspiring, and mentoring. A leader is in the trenches with the team, often asking “How can I help?” Then is willing to actually do whatever it takes to help.
A leader comes by many of these attributes inherently. Charisma, approachability, and authenticity are nearly impossible to teach.
Develop Leadership, Develop Innovation
When your focus is to develop leadership, you are actually investing in the innovation of your own company.
Though, developing leadership at every level is important. Every organization will need to hire and train support staff. While they are more likely to follow direction and procedure, support staff that develop leadership skills are more likely to question things and make recommendations regarding procedures that seem inefficient. This open dialog leads to open innovation.
When everyone is looking for the best way to accomplish firm objectives, ideas for improvement – from anyone within the firm – are always welcome.
Improved, more efficient processes allow us to better serve our clients. This also ties in with our responsibility as a fiduciary to always do what is in the client’s best interests.
Replace the Revolving Door
Leaders who are invested in their position, feel that they are making an impact, and believe in the values of the firm are more likely to stay in their position longer. This dedication reduces the revolving door issue that many companies face.
High employee turnover negatively affects nearly every facet of the business, but the most detrimental effect is usually on the budget. The average cost to replace a salaried employee is up to nine months’ salary, while that cost can skyrocket to over 200 percent of annual salary for higher earners or higher-educated executives.
To develop leaders, you need to find the right ones first.
How to Find Leaders
While the benefits of building leaders are clear, how to find potential leaders may still seem like a major undertaking. It doesn’t have to be. Just follow a couple of key steps in the recruitment and hiring process.
1. What makes an effective leader for your company?
Start by identifying the traits that a successful leader at your company will need. At Stableford, that is clear communication, ability to collaborate, and desire to continually improve.
2. Evaluate candidates based on the outlined leadership traits.
Results and experience are not enough. Leadership candidates must be able to demonstrate how they embody the traits you are looking for. How do they communicate? What have they done to improve their own skills?
3. Dig deeper.
Resumes are great for providing a broad overview of someone’s experience and education, but they don’t illustrate values and vision very well. During the interview process, be sure to ask questions that help you envision how the candidate will fit in with your company. How will they contribute? How have they demonstrated your key values in past positions?
Leadership Development in Investment Firms like Stableford
The culture in an investment firm is crucial. Not only does a strong, aligned culture boost your competitive edge, it is also what financial professionals are looking for in a company. It is what helps attract leaders.
According to an FCG culture survey, 97% of investment firm staff members agree with the statement that “our firm should allocate time and resources to improving our culture.”
However, the CFA Institute estimates that only about 10% actually do.
So what do those exclusive 10% of firms have in common that sets them up for culture success? It comes down to four phases.
1. Commitment. From senior leaders to hourly employees, you need everyone to buy in and say “yes.” This is actually the toughest obstacle to overcome in many companies, but the most crucial to be able to move on to the next three phases. Allow employees to voice concerns over making changes and address the concerns in a positive way, one that demonstrates the culture you are after.
2. Envision, and plan out the preferred culture. This includes taking a hard look at the current culture and diagnosing the areas for improvement. Ways to do this include focus groups, surveys, and assessments (this also helps with buy-in).
The weak areas and the ones that are most desired by employees then become the focus of the plan. The plan, or culture statement, should be simple (i.e. one page) and include: mission, vision of success, strategy and core values.
3. Execute the plan. Another popular sticking point for many companies, since putting theory into practice takes behavioral change. And it can be hard. Hint: this step takes good leaders to model and influence.
4. Measure progress. If your leaders and employees are not happy with the progress or plan execution, then all your work is moot. The buy-in continues at this stage, as you’ll need feedback from everyone to revise the plan and continue moving forward.
At the end of the process, you’ll want to revisit the initial culture survey and see how scores compare.
The Stableford Culture
Our diverse culture is a key differentiator at Stableford. We offer integrated advisory services to all clients through collaboration from portfolio managers, financial advisors, tax specialists and strategists located across the country.
Each leader brings something unique to the process, enhancing the investment experience.
While developing leaders does take more time and a hands-on approach, the benefits are unparalleled. Everyone in the firm grows from the conversation, challenges and open innovation. We streamline our processes, becoming more efficient and in turn, more successful. And first in line to these benefits are our clients.
To work with Stableford leadership and experience the difference in culture, schedule a complimentary 15-minute consultation now, or call 480.493.2300.