A Case Study in Effective Goal Setting

What matters? This is a loaded but important question. Everything matters if nothing matters. As an advisory business, you don’t have time for everything. To figure out where you’re going, start by understanding where you are.

As you look across the business, how would you rate yourself from zero to five, five being “strongly agree,” across the following areas?

1. People and culture: We have the right people in the right seats, and alignment in attitude, effort and commitment to put clients first as a fiduciary.

2. Technology and operations: We have strong internal processes and efficiencies.

3. Business development: We have a strong external presence (i.e., website and social media) and are growing through our marketing efforts. We are growth-minded and have a development culture.

4. Investments: Our investment management process is consistent in meeting our firm’s and our clients’ goals and expectations.

5. Financial planning and client service: Our financial planning solutions and client service model address our clients’ needs and expectations.

6. Firm vision and management: We have a clear vision and leadership, a strategic plan, and the ability to execute, run the business and manage risk (i.e., compliance).

7. Change management: We are innovative and evolve as needed by effectively navigating issues.

Where do you want to go? Rate your desired scores across the seven categories. Identify the areas with the largest gaps between your current versus desired states. Those are the areas to focus your efforts and establish firm-wide goals.

Setting effective goals

Generate more leads is an ineffective goal. Generate 10 leads to uncover two qualified prospects each quarter is an effective goal.

Why makes the latter effective? It’s specific, measurable, attainable, relevant and time-bound (SMART).

Which comes first: clarity or commitment? That’s another loaded question. Clarity is important only if you are fully committed; to gain commitment, you need clarity. Clarity answers the question, “How are we going to do this?” Commitment answers, “Why does this matter?”

Action is the secret of success. Anyone can come up with goals and a great plan. Those advisors who take action are the ones who make progress. How do you inspire commitment in yourself and your team? You are explicit on the impact and alignment to your mission, purpose and values, and you have a clear path to success.

The three dimensions of commitment to drive action:

1. Impact

2. Alignment

3. Process

If you’re missing one of these, your willingness and ability to achieve your goal will be threatened. Confirm commitment to your goal by answering the following questions.

Impact

• What’s the impact for you (or your firm)?
• What do you (or your firm) lose by not achieving this goal?
• When you achieve this goal, what’s the impact on others?

Alignment

• How is this goal aligned to your values, mission and purpose?
• How does it support your clients or key partners?

Process

• Do you know how to get this done?
• Are you confident in your plan and ability to achieve this goal?

If you can’t answer or don’t like the answer to one of these questions, you’ve identified an obstacle. An obstacle can either be overcome or may lead you to reconsider your goal.

Increase your chances of success

You’re not finished once you define your goals. Progress towards goals often breaks down for financial advisors because they don’t take the following steps to set themselves and their teams up for success.

Once you’ve defined your top priorities, there are three important next steps.

Define your approach by breaking down your big goals into smaller weekly, monthly and quarterly milestones and actions. These are the activities or milestones that must happen to make progress.

Share your goals with your team and invite them to help. The majority of new business is still driven by firm founders. One easy way to build a culture of development is to share your goals with everyone. The only way your team can help is if they know what you are trying to accomplish and even better, your plan.

Third, what you measure grows. Determine metrics to understand the leading and lagging indicators of success towards your goals. Often these are specific activities, pipeline and the outcome you are hoping for (e.g., new sales, revenue, production, etc.).

A case study in effective goal setting

Process is a dimension of commitment that is within your control but is too often left to chance. What do I mean by process? Specifically, I mean the way in which you will accomplish a goal –your plan, tactics or approach.

I never see a goal broken down enough to provide true clarity on what to do. Here’s an example: An advisor wants to grow their assets by $20 million in a one-year period. Everyone on the team agrees that’s a reasonable goal.

Great, now what?

I’d start by asking, ”Who do you want to grow by $20 million with, and who are these ideal new clients?” Let’s say they define their ideal clients as doctors with $1 million or more in investable assets. In this case, they need at least 20 new doctor clients with at least $1 million or more in investable assets.

Next question: ”Once you meet with a prospect, what’s your typical close rate?” I know the industry average is around 75%. Your close rate may be higher or lower. Choose a conservative rate of client conversion once you meet with a qualified, ideal prospect. Let’s assume their close rate is 75%. They need to try to meet with at least 35 qualified doctors to meet their $20 million goal.

How are you going to get in front of 35 qualified doctor prospects? At this point, I’d recommend looking backward for evidence. While investment performance may not be a good indicator of future performance, when it comes to people, our past can be a great indicator of future success. What’s worked from a development perspective in the past? It may be client referrals, marketing efforts or strategic partnerships. Look to your and your team’s strengths and resources to inform how you are going to achieve your 35 qualified doctor prospect meeting goal.

At this point, you may be shaking your head and telling yourself, “35 qualified doctor meetings isn’t realistic.” Maybe it is, maybe it’s not. It’s important that you understand what you need to do to achieve your goal and refine it if needed.

Let’s stick with our original goal of $20 million from 20 doctors and keep going. If you know you’re working to meet with 35 qualified doctors in a year, that’s about nine meetings a quarter or two to three a month. Taking it one step further, that’s about one meeting every week or two. How would you look to schedule one meeting a week with a doctor?

Hopefully, scheduling one meeting every week or two feels less daunting than 35 meetings in a year. Now you can start to back into what you and your team need to do each week to create the opportunity to meet with qualified doctors. As you think about what daily, weekly and monthly development activities look like for you and your team, I’d challenge you to continue to drill down on what that means. What is a “qualified” development activity – the activities that, if you do enough over time, will help you make the right connections and meetings? Be explicit. For example, a “qualified” development activity may be having a networking conversation where you share your elevator pitch, which includes who you are, what you do, who you do it for, and the benefits, and ask for help or advice based on connections and expertise of the person you’re talking to.

A goal of raising $20 million in new assets from 20 doctors versus the broken-down goal of meeting with a doctor once every week or two are very different approaches. Which goal do you think would be more likely to lead to progress?

With clarity on exactly which tactics you will take to achieve your big goals, you have everything you need to communicate to your team what the expectations are, and their role in the process. You also have clues as to what leading and lagging metrics you should track and review. As a good rule of thumb, activities – such as the number of development activities and prospect meetings – and a pipeline are great leading indicators of success. Net new assets or revenue are good lagging indicators.

Set yourself up for success in 2022 with intentional goal setting and business planning. Access SEI’s Growth Lab One-Page Business Plan and Goals to Outcomes Worksheet to help you get started.

Shauna Mace is managing director of the Practice Management Solutions at SEI. Her mandate is simple: help advisors and their teams grow sustainably on their terms. She runs SEI’s Growth Lab, an education and resource center for growth-focused advisory businesses to gain traction towards their goals, create efficiencies in their operations and differentiate their practices. SEI helps advisors be better through a platform of curated, outsourced investments, custodial services and technology solutions.

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