Leadership is a key element in the overall success of a business. So, how do business owners of financial advisory firms fare as leaders?
Masthead conducted research during 2012-2013 with more than 1600 South Africa-based financial services businesses, to answer this question.
Based on respondents’ input regarding the leadership indicators:
- personal goals
- strategic objectives
- strategic indicators
- business planning
- succession planning
our findings reveal that elements of leadership are mostly in place. However, there is still room for financial advisers and business owners to maximise the effects of leadership in their business and enjoy the benefits.
One benefit of leadership is that business owners can get more out of their lives. Financial advisers and business owners who align their business and personal goals are far more likely to enjoy what they do and be more successful at it. More than 80% of respondents are confident that their business goals serve their personal objectives.
Although this is positive, 66% of respondents are worried that continuous changes in the industry may affect their ability to reach their personal objectives. This is an area of concern and business owners should think about how they will adapt to keep their business and personal goals aligned.
Almost three quarters of respondents have documented their strategic objectives. Of these, 48% have translated these objectives into specific strategic indicators that will support the shape of their business over the medium term. In addition, 59% of those who identified key strategic indicators have documented measurable targets to track their progress toward their strategic objective.
By documenting quantifiable indicators, business owners can be more objective in determining their progress, as they can better compare the current condition of their business against their strategic objectives. Furthermore, strategic indicators support effective business planning..
Of the 38% of business owner respondents who employ advisory and support staff, 78% said their employees are aware of the role they play in ensuring that strategic objectives are met. A business is best able to achieve its strategic objectives when all its activities are geared toward a common goal and all employees know how their actions impact on business success.
Time management is an area of concern, with only 38% of respondents using their time effectively. Only half of all respondents maintain a healthy balance between time spent on strategic issues and technical or tactical issues.
This aspect can be addressed by delegating more tasks, especially administration, to an efficient, well-trained personal assistant. By delegating, the owner can free up more time at a higher hourly rate to do more business, be more effective, focus on strategic issues and build value in the business.
Another area of concern is that more than half of the respondents are not comfortable that their succession plan deals with all practical, financial and transitional aspects of their business transfer. Businesses that have a good succession plan generally have high client retention after a successor assumes control, while clients need not find another adviser should their current adviser unexpectedly exit the business or industry.
Financial advisers and business owners should be encouraged to evaluate the extent to which the abovementioned leadership indicators are applied in their business. One can only be a more effective leader by working ON a business rather than IN it.