Fostering a culture of continuous improvement

Fostering a culture of continuous improvement

Travis Brewer | March 26, 2017

When you consider ways to grow your firm, are the top two options that come to mind onboarding more clients or acquiring another firm? If so, you’re not alone. But the reality is, operational efficiency takes discipline and is an often-overlooked.

When you consider ways to grow your firm, are the top two options that immediately come to mind onboarding more clients or acquiring another firm? If so, you’re not alone. But the reality is, operational efficiency takes discipline and is an often-overlooked method of improving profitability for a firm. Think about it: When your firm is efficient, you and your team can spend more time focused on completing work the client is willing to pay for. It’s work that directly increases the value of the relationship in the eyes of the client.

Finding inefficiencies and conceiving solutions

The quickest way to uncover inefficiencies in your firm is to have everyone track their time in 15-minute intervals throughout the day. This will help you determine how much time is spent on tasks that could be streamlined or that don’t add any value to the client relationship, such as time spent correcting mistakes, running superfluous reports, going on unnecessary travel, or navigating a poorly conceived office layout.

After identifying your main areas of concern, knock out the issues that will take the least amount of time and resources to fix, and then come up with solutions for your bigger problems in order of their complexity. As you create strategies to solve each issue, be sure to document everything. This will ensure that your new workflows become standardized and consistent throughout your firm.

Track key metrics to measure improvement

Now that you’ve created documented processes to create efficiencies, you’ll want to monitor them and make sure they’re working. To do so, start tracking the metrics most relevant to your firm. Even if you’ve been in business for decades and have never tracked key metrics, it’s never too late to set benchmarks and begin tracking. The metrics you choose are entirely up to you—every firm is different. Ultimately, you’ll want to figure out which metrics are most relevant to your value proposition.

For many firms, client satisfaction is a good metric because it paints a solid picture of what’s going on in a firm. Plus, it’s a simple metric to collect. Using online surveys, you can gather consistent data annually, quarterly or as frequently as you’d like. Avoid trying to measure client satisfaction during face-to-face meetings. This can overwhelm clients, make them feel obliged to give positive feedback or encourage them to give you broad feedback that isn’t easily quantifiable.

Client satisfaction, however, is just one metric you might consider measuring. Additional metrics include client retention, profitability, and asset growth. No matter which metrics you measure, be sure to ask the following questions as you formulate a data collection plan:

What? What way will the data be collected? What is the data source?
Who? Who will be pulling the data? Who’s responsible for analyzing it? Who receives the information?
When? How frequently does the data need to be collected? Annually? Quarterly?
How? In what format or forum will the data be shared?

Set realistic goals and apply them to your culture

For a firm to be truly efficient, everyone in it must know how to move the organization forward. That’s why, once you’ve decided on the metrics that are relevant to your firm and come up with a plan to measure them, you’ll need to set realistic goals that are tied to those metrics. This doesn’t just apply to the goals of the firm as a whole—it should also trickle down to your employees’ individual goals. For example, if your firm’s overall goal is increasing client satisfaction, you might offer bonuses to the employees whose clients return a satisfaction score that meets your target for the year.

Below, we’ve provided an example of how your metrics can ladder up to and align with both firm and individual goals.

It’s important to make sure that the goals you make are SMART: Specific, Measurable, Actionable, Relevant, and Timely. While it’s great to dream big, you still want to set yourself up for success. Remember that your goals can always be adjusted over time, so don’t set your sights too long term right from the get-go.

Rinse and repeat

As businessperson Jim Rohn once said, “We must all suffer one of two things: the pain of discipline or the pain of disappointment.”

Ultimately, monitoring your metrics and setting goals is a cyclical process that your firm will repeat many times over, but it’s a worthwhile exercise that deserves your attention and discipline. Because in the end, it may just be the thing that makes your firm stronger, more efficient and more profitable than ever before.

1. FA Insight. The 2015 FA Insight Study of Advisory Firms: People and Pay.
2. FA Insight. The 2014 FA Insight Study of Advisory Firms: Growth by Design.