How Advisory Firms Can Leverage EOS To Systematically Manage And Grow Their Firms

20 Feb    Investing News

As the RIA industry’s continued growth has catapulted more and more firms across the $100M (or even the once-unthinkable $1 billion) AUM threshold and transformed many practices into true businesses, many advisors are finding themselves as “accidental business owners” as their firms have grown beyond themselves as the original founders and into professionally managed sustainable enterprises.

The challenge, of course, laid out perfectly in Michael Gerber’s eMyth, is that as our industry has professionalized, it has required many “accidental business owners” and their firms of all shapes and sizes to elevate virtually every aspect of how their businesses are run, now that it’s no longer just the firm owner themselves and perhaps an assistant or associate. Managing even a small RIA of a half dozen individuals and beyond now requires firm owners and/or management to be able to effectively develop and communicate a compelling vision, foster a culture centered on execution of key objectives, build processes for identifying and solving key issues, and, most importantly, implement a framework for managing and leading people.

Enter Gino Wickman’s Entrepreneurial Operating System, outlined thoroughly in his seminal book, Traction.  The incredibly simple, yet highly effective framework (if implemented correctly) has gained momentum over the last five years across small to mid-sized businesses, and has specifically gained popularity with RIAs across the country in recent years as a means of professionalizing their businesses as they hit that 6+ employee mark, and drawing focus to the six key aspects of managing any business: vision, people, data, issues, process, and traction.

In this guest post, Matt Cosgriff, Wealth Management Group Leader at BerganKDV Wealth Management, shares his unique insights on how to leverage EOS to professionalize an RIA, having been through the process in his own firm. In his role leading a $1 billion-plus RIA inside of BerganKDV (a regional professional services firm offering tax, audit, payroll, and technology solutions), traction has not only allowed the wealth management business to stay fully integrated with the broader organization which uses EOS, but has produced Traction—sustainable results—over the last ten years of its use.

In his firm, Matt and his team have successfully implemented all six components of EOS starting with “Vision”, by implementing the Vision/Traction Organizer (V/TO) tool to clarify and communicate the firm’s core values and focus, long- and short-term organizational goals (including “Rocks”, the important 90-day goals identified each quarter), marketing strategies, and key issues.  Focusing on the “People” framework, the firm has been able to identify the right people for the right roles by finding those who “get it” (i.e., they understand the role), “want it” (i.e., they have a genuine desire to do the job successfully), and have the “capacity to do it” (i.e., have the skill and ability to do the work). The “Data” component has been used to create and customize “scorecard” systems for leadership, departmental teams, and individual employees to benchmark performance, which in turn facilitates identifying and addressing the “Issues” that may deter from achieving goals.

The development of documented and agreed-upon core “Processes” in the firm is fundamental to achieving consistent and excellent customer client experiences, which, taken together with the other EOS components, ultimately leads to creating the last EOS component, “Traction” – the continual organizational momentum that allows a firm to grow and achieve its goals – monitored continuously through weekly “Level 10” check-in meetings.

Whether you’re a CEO, Director of Operations, new advisor, or client service associate inside an RIA of any size, Matt’s breakdown of EOS outlines practical insights for how to leverage the key aspects of Traction to professionalize your organization.

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