Raise your hand if you've been told, endlessly from the podium at conferences and in articles like this one, that you need to delegate more.
Keep your hand up if you knew this already. Raise it still higher if you have actually checked out the cost of having somebody do a lot of the rote work that you keep on your desk, and that cost is at least $150 per hour less than your time is worth.
Look around, and you'll notice that everybody in our studio audience is now drumming their fingers impatiently on the ceiling. You don't need to be told, yet again, to delegate. What you need is a way to move that work off your desk A) without requiring more time and energy than you can spare at the moment, and B) in a way that doesn't make you constantly anxious about whether that work will be handled effectively.
Spenser Segal, founder and CEO of the business consulting firm ActiFi, Inc. in Plymouth, MN, has thought more deeply about delegation – to your staff, to your computer software, to outsource providers – than anybody else in our profession. His key insight: delegation is rarely a simple one-step process. If you're serious about getting busywork off your desk, try breaking the process down into three steps, with each taking you deeper into the actual nitty-gritty of the task handoff.
Level 1: Inventorying your tasks
Here at level one, start by listing all the different services that you provide to clients, plus the general activities that have to be done around the office. To take a few simple examples, you have annual meetings with clients. Whenever a prospect becomes a client, you have to go through an onboarding process involving documents and input into your office computer systems. You create financial plans for each new client. You update plans for each existing client. You do year-end tax planning. You look for rebalancing opportunities. You research current and potential investments.
Chances are, you could list the various tasks at your firm pretty quickly and off the top of your head.
Traditional articles on delegation will tell you to look over this list and decide what to move off your plate. But already, you can see the problems with that simple advice. Let's suppose you're doing pretty much all the work on a particular Level 1 task – like, for instance, organizing and scheduling your annual meetings with clients. You'd certainly like to delegate some of this work, but there are parts you want to hang onto, like reviewing the materials that will be presented, and running the actual face-to-face client meeting.
You'd also like to delegate different parts of the task to different staff members (the preparation of the plan to a planner, the phone calls involved in the scheduling to an administrative person), but the service/activity list doesn't help you determine what parts of the annual meeting you should delegate, and to whom.
Level 2: Defining your swimlanes
To address these valid objections, you need to move on to Level 2, which takes you one layer deeper into the delegation process. Here you list all the activities that have to happen for the individual tasks. For example, consider the actions that take place when your firm prepares and hosts a successful annual review with a client. Each advisory firm will do it a bit differently, but the list might include:
- checking the client's data in the database;
- identifying whether any data is missing;
- contacting the client to get updated data;
- creating the "case" (the updated financial plan and portfolio report);
- scheduling the meeting with the client;
- reviewing and finalizing the case;
- printing the documentation that will be shown to the client;
- conducting the meeting;
- creating a summary of what was said at the meeting for the files;
- sending a summary letter confirming the next steps to be taken by both the advisor and client; and
- coding those next steps into an organized software system so they can be assigned and tracked.
A level two evaluation of the pieces of the task gives you a clearer picture of what can be delegated, and to whom. As the senior advisor or relationship manager, you'll probably decide to hang onto two or three of these Level 2 activities – reviewing and finalizing the case, conducting the meeting, and perhaps creating (or dictating) the summary letter. You can look over the list and decide which staff person should be handling the other individual tasks. Your goal is to have your most highly-skilled people handling the most complicated remaining tasks, and your support staff doing the less complicated ones. In the list above, a junior planner might be assigned the task of deciding whether any client data is missing. A receptionist might contact the client and ask for the updated data (and code it into the system). The junior planner might create the first version of the case. The receptionist might schedule the meeting with the client and confirm it, and also print the documentation and send out the summary letter.
This Level 2 view lets you address yet another complexity; you can now create a time-line for the overall process, and schedule hand-offs. The junior planner has to create a list of what's missing 10 days before the meeting, and hand this off to the receptionist. The receptionist has to get this information from the client seven days before the meeting, and hand it back off to the junior planner. Five days before the meeting, the rough case will be drawn up, and handed off to you or the senior planner who manages the account – and so forth.
Look at what just happened. Where before you had nothing more than a general idea that you didn't want to do all the work associated with this task, now you have a pretty concrete idea of what has to be done, who should be doing it, when each task should be completed and the specific hand-offs that will take place leading up to the meeting.
To make this workflow easier to see and plan for, ActiFi creates "swimlane" diagrams for its consulting clients, which show who does the first part of the task, and then hands it off to a second member of the staff in another "lane." Further along the timeline, the work is either handed back to the first person or to another one some days hence, and so on. At any point, the institutional relationship manager or advisor knows who should be working on the task and can find out pretty quickly what has been completed and what hasn't.
Ideally, you will finish your Level 1 list, identify the services where you're doing too much of the work, and go to Level 2 with each of them, breaking them down into individual tasks, creating timelines and swimlanes with specific staff people (including the senior planner/owner) listed at each step. Eventually, you want to go to Level 2 with every service or activity that takes place in your firm.
Level 3: Defining the standards of excellence
Despite this new level of clarity, you haven't actually delegated anything yet. This happens at Level 3, where Segal finally answers the question of how you delegate. You can't move a lot of tasks off your desk until the staff people who will take them over know how you, currently, do them.
At Level 3, you take each activity on the Level 2 list and break it down still further, to the actual physical activities, in granular detail, that have to be done to complete each task. You write a detailed description of how you are currently doing that task.
For instance, when you look up the client's data, you log into your financial planning software. (How does the log-in process work?) You check to see if any fields are missing. (Which fields are most important? What are you looking for?) You look at how recently certain information has been updated, and you compare this information with a checklist that you created. You make a list of what's missing in words that the client will be able to understand. You write a letter outlining what you need. You send that note to the client. You monitor whether that information has come back (how long do you wait?), and follow up if the client doesn't respond. You check the response to make sure the questions are answered.
Most advisors do these things without thinking about them. By documenting the steps in detail, you make it possible for somebody else on staff –somebody whose time is less valuable than yours – to take over the task by simply following the steps.
This addresses the point where delegation typically falls apart. It's hard to let go of a task for three reasons: 1) you're convinced that nobody else can do it as well; 2) training somebody else feels like it is going to take a lot of time and energy, when it's easier to just do the task yourself; and 3) you imagine that you'll have to supervise everything you delegate anyway. "We've found that the advisor's biggest fear with regard to delegation is that they're still going to be accountable for the outcome," Segal said. "When they don't have any visibility or confidence that it's getting done, they get nervous."
But once you've outlined each step of the process, then much of the training problem goes away. The answer to objections 1 and 3 are: instead of delegating the actual steps to accomplish the task, you delegate responsibility for completing the task to a certain (high) standard. If the person who takes over the task is meeting that standard, no further supervision is necessary. If there's a problem, you'll catch it in the review process and look at how to fix it. If the staff person gets confused, he/she can address the issue with you proactively.
Finally, and perhaps most importantly, you want to give the staff person the freedom to look for ways to do the task better and more efficiently – a very important operational activity that you, yourself, have little time to do. Advisors who have mastered the delegation process will inevitably tell you that their staff is now doing a much better job at the activities they moved off their plate than they ever did. The second or third time that happens to you, you begin to relax about the next thing you want to delegate.
A living procedures manual
Once you've mastered this three-level delegation process for one or two services or routine office activities, your goal is to create three-level documentation for every service and activity – which, of course, means that each member of your staff is also documenting his/her activities in granular detail. This allows them to delegate their own inappropriate tasks with confidence, creating an ongoing, organic shifting-of-responsibilities process from your most skilled, highest-paid employees to lesser-skilled, lesser-paid employees. ActiFi provides software that lists the various responsibilities at Level 1, and then allows you to drill down to Level 2, and then to drill down one more level and see the actual activities. This becomes a living document; when new software is added (or software is replaced), when new tasks are created or new, better procedures are discovered, the staff members go into your process manual and update it in considerable detail.
That, in turn, makes it possible for the firm to accomplish a lot of other things that were probably impeding your growth in the past. You can accommodate new hires into your office ecosystem without taking up a lot of training time from existing staff; the new hires already have their tasks documented in detail, so a few supervised test runs are all they need to become productive. The firm can smoothly adjust responsibilities as your staff members move up the organizational ladder. You no longer hit a wall at $100 million or $300 million in AUM.
You also have the raw materials of detailed job descriptions and a career ladder. Simply take the various swimlane diagrams, group the activities that are associated with each employee, go to the detailed task lists, cut and paste and presto! Instant job description! You can segregate these by skill levels and seniority, and suddenly you have a career ladder, and you can show an employee what skills he or she would need to take over and master in order to move to the next rung on the ladder.
Finally, this addresses the all-too-common situation where key members of the staff hold the owner hostage. Why? If Mary Alice is the only one who knows how to run the downloads and reconciliations in PortfolioCenter, or make tax adjustments in Trade Warrior, what do you say when she asks for a 15% raise every year? With a living procedures manual, you can cross-train employees for virtually every task – without a lot of wasted time and energy. When a key employee leaves the firm, she leaves behind a granular list of task descriptions and several peers who have filled in for her in the past.
What are the cost benefits of deep delegation? Segal offers a fairly simple analysis. Let's say you're billing your services out at $300 an hour, and you were typically spending four hours on each client meeting running down client data, inputting it, doing the planning work, and playing phone tag with clients to get them to come in for the meetings. You handle 100 of these client meetings a year. After delegating, let's say you manage to shift two of those hours to a junior advisor whose time is worth $100 an hour, and one additional hour to a receptionist whose salary is $25 an hour.
The first thing to notice is that a single client meeting was costing your firm $1,200 before delegation – a number that might cause your eyebrows to rise a little. Now, after delegation, it costs $525. Multiply that by 100 meetings, and you have saved $67,500 in internal costs over the course of a year.
And that's with just one of the Level 1 tasks. Chances are you have 20 or more tasks where similar efficiencies can be found. The real benefit comes when you reassign tasks, delegate throughout the firm, and know exactly what kind of person to hire and what that person will do – and when you hire that person, suddenly there is dramatically more capacity to add new clients, and more time for you to implement a marketing program.
Perhaps just as importantly, when you go through this process effectively, you end up with a much more streamlined, process-driven service model, where everybody knows what to do. Suddenly the whole firm becomes more proficient, more confident, more capable.
Can you keep up with our industry?
Having these Level 1, 2, 3 distinctions transforms the whole idea of delegation from a slippery, confusing and intimidating task into a systematic business procedure. The cost savings are important, but this is only a part of the benefits. Your firm becomes more efficient, you add capacity to take on new clients, you get out of the hostage situation with key staff members, improve your staff training, reduce the pain of turnover, improve client service (or at least make it more reliable) and become more effective about integrating and using new software capabilities at a time when more and better capabilities are evolving weekly.
Indeed, Segal argues that software capabilities, systems and powerful new client services are entering the profession much faster than advisors can incorporate them – and this, in itself, creates a huge wasted opportunity cost throughout the advisory world. "The executives in the custodian and broker-dealer world are willing to spend the money to help advisors boost their productivity, and the advisors are not taking full advantage of it," he said. "The software companies are adding powerful new capabilities. What they are lacking," he added, "is user sophistication – advisors who can turn [the integration and capabilities] into tangible business benefits to their firms."
You'll hear a lot more pundits, conference speakers and article writers exhort you to delegate, and do it now rather than later. If they neglect to tell you how, then the rest of their advice probably isn't going to be very helpful either.
Oh; and I forgot. You can take your hands down now.
Bob Veres's Inside Information service is the best practice management, marketing, client service resource for financial services professionals. Check out his blog or subscribe to get the Fee Samples report at: www.bobveres.com. Or check out his Insider's Forum Conference (September 17-19 in Dallas) at www.insidersforum.com.
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