Bill Whitehead: Well, there’s so many ways as you say, you can go at that word, but to me, what it is is really taking the time to sit back and create a vision for your business, where you want it to be one year, two years, three years from now. And then from there, developing a plan on how you’re going to get there. And in that plan, you then have to include sort of specific and measurable activities that you need to execute on to bring that vision to fruition.
Ben Jones: And when you think about kind of strategic planning or the idea of a strategy versus a tactic, which you kind of alluded to, how do you kind of think about the differences between strategy and tactics when it comes to the planning?
Bill Whitehead: To me, as I mentioned, strategy is you’re laying out more long term plans and strategizing on how you’re going to get where you want to get to. Tactics to me are more short term tools that we utilize, we change and switch on a regular basis that help us get where we want to go of course, within that plan. Maybe an example of a tactic I can give you is another podcast that I’ve done that’s on our website, CEO Coaching International, and it shares with advisors on how to keep the sales process on tack, for example, when they run into objections. To me, those are tactics that we can learn along the way to make us better, but they’re not really strategic.
Ben Jones: Oh, that’s great. We’ll make sure we link to that episode in the show notes. Is there an optimal time for someone listening to this to think about strategic planning? In other words, I think we always associate we’re here at the end of 2020 and people associate kind of year end or strategic planning process, but is there something different than say just the turn of the calendar? Is there are different business stages, economic cycles? When is the optimal time to do strategic planning?
Bill Whitehead: Well, let me start by saying that I believe one of the biggest issues for financial advisors in today’s world is, is that many of them don’t do any kind of planning, strategic or otherwise. Many advisors don’t have a business background and they’ve come into the business multiple ways, had mentors that have taught them how to put their head down, work hard, learn the technical side of the business, the planning side of the business and so many advisors really don’t approach their practice like a business. And so many of them don’t strategic plan or do any kind of planning. And really best practice is, you always want to do an annual plan in my opinion. And that annual plan can vary. I always used to oddly enough, do my annual plan in September, October at the latest for the following year, because so many things that we want to put into play, take some time to develop and get rolling.
Bill Whitehead: And then really after that, you want to be having sort of a quarterly review, whether that’s a half day with your team or whatever, every quarter, referring back to that plan and making sure you’re executing. Really reporting to each other, what your results are to date, how you’re progressing, if there are any issues and then tweaking that plan, if you need to. Really best practice is annual plan and then quarterlies after that to ensure you’re staying on track.
Ben Jones: I like that. And so your strategic vision doesn’t change, but annually your plan, your annual plan does and those targets and you can then monitor them through the quarterly cycle. It’s a really easy way to think about that. I like how you laid that out. I am curious, you did mention a lot of advisors don’t maybe sit down and do a plan if you will. Why do you think advisors should even care about this topic?
Bill Whitehead: Well, there’s a lot of ways. What we plan gets done for sure and it keeps us on track. Probably the biggest challenge that I have, and I coach a number of advisors, really mostly across USA. And what I find is most of them have their heads down and they’re working hard and they’re good at what they do and they work very hard and they do great jobs for their clients. Then what ends up happening as they’re growing their business, is they hit that sort of wall as I call it, where now their client base has grown to a certain size and they are now consumed with servicing that client base and no longer have time to continue growing their business. And by the time they realize that, they’re six, eight months behind and just really under pressure, under the gun and have really slowed down in growth or lost any momentum they’ve had. And now it’s a bit of a scramble, what do I do now? And that’s when mistakes are made.
Bill Whitehead: That’s probably the biggest reason why we have to plan so that we know where we’re at with our business. Great businesses are always six months ahead of recognizing when they need people and when they need to add members to their teams, where other businesses or many advisors who don’t have, plans tend to be six months behind and that’s when mistakes are made, when we’re desperate and hiring and bringing new members to our team.
Ben Jones: Now, we often hear about brilliant business strategies that become legend or lore because they were so successful. But my intuition is that most strategies either fail or have more mundane results so we never hear about them. With this wide range of possible outcomes, how do you begin to develop the right strategic plan for you?
Ben Jones: I do want to jump into what is the strategic planning process look like. And so maybe you could just lay out, I know you’ve done some strategic planning with a lot of folks and even financial advisors. What are the steps to strategic planning process? How do you begin?
Bill Whitehead: Starting point and you’ve heard the saying over and over again, begin with the end in mind. Really what are your goals for the following year, 2021? What are your revenue goals? What are your EBITDA goals? Once you sort of identify what those goals are, and don’t just pick a number, because last year you did 15% growth so this year is the same. Really put some thought into it. As I said, maybe think big and what we might be able to do to be bigger, but once we’ve set those goals, then we have to dig a little deeper and it’s all then about working your way backwards.
Bill Whitehead: Drill down. Where is that new coming from? How much can come from existing clients and a bigger share of their wallets? How much has to come from new clients? And if that’s the case, then what’s the average size of a new client? And how much revenue will a new client drive? Therefore we can work backwards to figure out exactly how many new clients we need to develop. If you’re utilizing insurance in your planning process, then how much revenue maybe is driven by insurance sales that year? Once you sort of identify where that revenue is going to come from, then we start working backwards and we figure out what the specific and measurable activities again, in each of those areas that we have to take in order to bring those goals to fruition.
Ben Jones: Excellent. Let’s say somebody gets their kind of industrial math together and they’ve got an idea of how they’d like to execute for the year ahead and maybe where they’d like to be in three years. What do you see as kind of the biggest roadblocks to then taking that kind of vision and turning it into a plan?
Bill Whitehead: Sometimes, as I said, it’s just lack of experience and nobody has had the background to understand what needs to be done so there’s a little bit of fear in setting up a plan like that and maybe fear of failing or fear of not being able to develop a plan that stops some folks from building plans is probably one reason. The other, as I said is if you’re even somewhat successful today as an advisor, that means you usually have your head down and you’re working in the business constantly. You’re just always trying to keep up with the demands of your new clients and your existing clients and you’re prospecting. And so you may have the best of intentions, but all of a sudden, you just don’t set the time aside and you just keep working in your business. And I think that many advisors need to realize what got them to where they are today, is not going to get them to where they want to be tomorrow so they have to take that time and set it aside to do some planning and work on their business, instead of always buried in the business.
Ben Jones: Now, we have people who are listening that are solo practitioners, some that are work in teams, some that are RAAs or business owners, who should be included in that planning process or that planning discussion?
Bill Whitehead: As you said, every business is different, but I believe that any person on your team that is going to have to play a role or can play a role or have an impact on that plan being followed and executed, should be included because we need to align everybody on the team and have them all understand not only what the goals are, but more importantly, what we have to do to get there and who’s going to own what and what do they have to do by when and take that and drill down again to those sort of specific and measurable activities and give that ownership to members of the team. And so, even I remember my own business, of course, obviously, my leadership team was involved in my planning, but even executive assistant for me that I had absolutely was in there because she had a huge influence on my day to day operation and scheduling so she was always included as well.
Ben Jones: When you get this group together, how do you avoid some of the pitfalls of groups like that? For example, how do you avoid group think and how do you even avoid overthinking things?
Bill Whitehead: The absolute best practice is to hire a facilitator, hire a coach, have somebody work with you. And that third party person who’s objective and to make sure you stay on task, follow up process, that type of thing. And really the other big advantage to that is we’ve all heard in these meetings and planning sessions, when a CEO whispers, it’s like it’s booming through the room. In other words, the CEO or the owner of the business can, without realizing it, take control of the meeting or be influencing everything that goes on and if his team isn’t going to question him, then you don’t get the best out of those meetings. A third party facilitator allows the owner or CEO to participate in the planning session and helps keep everything on track so that you don’t go what we call chasing rabbits and or having one person dominate the entire process.
Ben Jones: Yeah, that makes a lot of sense to me. For someone who’s never hired a facilitator, what are some of the things that they should consider in hiring an expert to facilitate that type of discussion?
Bill Whitehead: Well, everybody’s different, there are all kinds of companies out there that do that. You need to just ask questions and have discussions and try and find a fit for what you’re looking for, of course. What I would suggest is is that there are companies out there with what I call cookie cutter approaches. I’m not a big fan, but what I look for and what I suggest you look for somebody that understands the real business acumen of putting together a plan and building a plan. And oddly enough, they don’t even really have to have background in financial services. It’s a huge help if they do, obviously, but it’s more important that they understand really how to develop a plan. And what I find many other facilitators or organizations or cookie cutter approaches do, is they don’t go far enough in the plan.
Bill Whitehead: They walk out with three, five, 10 objectives for the year, which are too many, first of all so there’s lack of focus and they haven’t assigned ownership to any of those activities and drill down and had the people that are going to own them understand what are those activities that they have to execute on? Who’s going to do what by when? What are the milestones? How are we going to measure them? How are we going to communicate them? Oh, you have to make sure that your facilitator knows how to walk through that entire process so at the end of your planning session, everybody walks out aligned, also though, knowing they’re focused on the top three to four key things that are going to drive their business and they also have a plan that I call is more an execution plan where they know who’s going to do what by when, as I said. What are those milestones along the way? How are we going to measure whether we’re on track or not? And how are we going to communicate to each other that we’re on track or off track all the way through?
Emily Larsen: As Bill has laid out, the strategic planning process involves a couple of stages. You have to set the vision, identify three or four actionable items, build an execution plan and then review to make sure everyone is held accountable. That’s an important step. The insight of hiring a coach or facilitator for these conversations is easily overlooked, but it’s an investment that can pay off big for you and your team. We have all been told to think big, but what happens if you get overly ambitious?
Ben Jones: You said something that I think is really important here, which is, everybody ends up with really ambitious ideas that they’re going to do five big things this year or 10 big things, but really taking on too many things is a strategic mistake. How do you counsel people as to what are the most important things? And is there a right number of initiatives to take on?
Bill Whitehead: Well, I really do believe less is more most times and you’re better to focus on three things and do them really, really well as opposed to five or 10 things and not do any of them or do them all in a mediocre way. Again, it’s drilling down. And so if we’re talking about growth and we want to focus on three things, there might be five, six things on the table. We have discussions on how effective they’re going to be. Plan A may be whatever, client events or what I call one plus one event where you do something with your clients and they invite a guest.
Bill Whitehead: If we’ve identified that we need to bring on 20 new clients this year, then we looked at that event and we say, “Okay, how many clients or leads are we going to get from this event? What’s our normal ratio on getting meetings with those people? What’s our ratio then in closing those individuals?” And so we should be able to nail it down to know exactly how many clients we should get out of each activity we’re going to undertake and then we turn around and say, “Okay, rather than doing 10 different things, can we replicate this? And can we just get better on it? Can we become almost a machine?” And so in the end, when I’m done a planning session, we focused on usually three different strategies and you may replicate some of those strategies throughout the year, but we know specifically how many clients we feel we’re going to get out of those strategies and we build the plan in order to hit that goal.
Bill Whitehead: And then we measure that throughout each time and then when we hit our quarterly review, if we’re on track, awesome, we just keep rolling. But if we’re behind a little bit, we try and identify why. Were we off on our closing ratios? What didn’t we execute on? How can we get better? Are we doing fine but we just overestimated what the impact might be? Do we have to schedule in one more event to get back on track? And so it’s really understanding why you’re doing it, what the impact is going to be, and then constantly measuring whether that impact is what you expected and whether you are on track to have your plan or your goal for the end of the year, come to fruition.
Ben Jones: And so you get your objectives together for the year ahead and strategically you know you want to say double in three years or you want to work half time in three years. It doesn’t really matter what the end objective is. You now have to turn that into a plan. And like you mentioned, how does one year look and then two year and three year and so on and so forth? How do you go about assembling that plan? And what’s the best way to kind of test and iterate on it, to make sure you set the right course?
Bill Whitehead: We sort of work our way backwards, which I’ve already walked through. And in the end, you want to walk out at the end of that planning session on however long it was, whether it’s in day, day and a half with those specific and measurable activities or actions that you’re going to take moving forward. And if you’ve been doing things right and tracking your ratios all the way through, then it makes it pretty simple. Because then I know that if I do an event and ask my eight clients to bring a friend, I know that typically 80% of them will. I can work the math and know exactly how many events I need to have in order to get introduced to how many new people. And then if I know my math, I know how many of those new people are going to be willing to sit down with me and give me an opportunity to see if I can be of help to them. And then I also know how many of those people will end up being clients.
Bill Whitehead: Every advisor has heard about how important it is to track ratios, but so many of us just stopped doing it. I had senior advisors in my office that would come to me and tell me, “Ratios are for rookies.” They didn’t need to track them, but it’s so important to understand your numbers and your ratios, because then what you mentioned is how do we know we’re executing? We need to track those ratios and we track those events. We determine what we need to measure and it really is about our leading activities. If we understand and can work the plan all the way back to knowing exactly what our leading activities have to be in order to hit the goals we’ve set and then we track those leading activities religiously and follow them and then review them on a regular basis, we’ll know whether we’re on plan or not.
Bill Whitehead: And if you’ve been doing it for a while, it’s amazing how you just, you hit those goals almost bang on every time. If they’re new to you and you haven’t been doing it, you’re going to do your best at estimating at the start. But I tell you, you need to then track that. And at the end of the first quarter, the second quarter, you’ll start to understand your ratios and whether you’ve made mistakes in those estimates and then you just pivot, you just adjust. Do I have to have one more event? Do I have to make 20 more calls than I had planned for originally? Or how do I make those adjustments? But that’s what it comes down and it is tracking. That’s as important as developing the plan. I’ve seen so many firms develop a great plan and then that’s great and they all walk out and then nobody owns anything. Nobody measures anything, nobody tracks anything. And then we all gather round at the end of the year and wonder why we fell short of our goals.
Ben Jones: Yeah. I think scorecarding is such an important part of this, but the process of scorecarding can be pretty labor intensive too. How do you recommend that say it’s a team of advisors or a firm, how do you recommend that they get the kind of execution and scorecard management right? Do they assign it to an EA to manage? Is it owned by the CEO? How do you do that?
Bill Whitehead: Usually you shouldn’t assign it to the CEO. They should be busy doing other things, but definitely somebody has to own it. And I would also say, keep it simple. Good advisors are what I call good salespeople and good salespeople are notorious for being terrible at the administrative side of the job and tracking and all these things. Firstly, we have to get buy in from everyone in the importance of it and why it works and how it will help us, not only this year, but then next year when we’re doing our annual planning we’ll be able to work backwards again and know exactly what our activities need to be to drive our goal or drive our businesses and obtain our goal.
Bill Whitehead: Once you understand the why and the buy in, we want to keep it simple. There was a few CRMs that are out there, they’re pretty simple and straightforward. There are others where the advisor’s got to do 10 clicks to track his activities. You know that’s just not going to work. Believe it or not at one point in my business, our CRM was too onerous. We just set up a simple Excel spreadsheet and just said, “Here, do this, do this and send it to my executive assistant.” And she was able to import it all in one general spreadsheet and that gave us our rules, but there are some good CRMs out there now that are pretty straightforward that tracking is easy and simple to do.
Ben Jones: I would say that if you’re using an onerous CRM to get to what you need to get to, then you might want to revisit the CRM.
Bill Whitehead: I’m going to say, if you have a CRM that is onerous, you’re not using it is most likely what’s happening.
Ben Jones: The administrative aspect of your strategic planning can be really tedious to keep track of. But as Bill says, it’s critical to focus on these details, even down to what systems and tools you’re using to keep track of results. But don’t focus so much on the scorecard that you lose sight of the people in the room. You need to be prepared to have tough conversations and make decisions when things go off track and to use another industry buzzword, pivot when necessary.
Ben Jones: You’re getting the scorecard, you’re maybe compiling these numbers weekly, but quarterly you get together with your coach, your facilitator, your leadership team, whoever that group of people might be. How do you have candid dialogue that also evaluates whether it was the plan that failed or was it the execution that failed or even external items? For example, this year to use an easy example, if you’d started a restaurant on March 15th, probably failed. How do you kind of have that dialogue without people getting defensive and losing the focus on the future?
Bill Whitehead: Firstly, when I said quarterly reviews, that’s really a sit down half day to review and determine whether you have to make changes, pivots and adjustments if you are off track. But that is way too long to be sitting down with the team and reviewing or measuring or holding each other accountable going forward. Best practices are typically most firms I have coached and even our own firm would biweekly get together. Some have weekly meetings where they sit down and they share what those leading activities are amongst the team. And what’s key to that is, is to understand, we have this word accountability. I believe in self-accountability. This isn’t about brow beating people on your team that are maybe falling short. It’s really just trying to help each other hold ourselves accountable and so those meetings are about measuring, sharing with the team what we’re doing.
Bill Whitehead: Are there any issues that we’re having, if we are falling short or one team member’s falling short, what are your issues? How can we help you? How can we pick up the slack? Who’s doing a great job? Somebody’s leading activities are leading to more results than let’s share best practices amongst the team. You have to have the team aligned and understanding what the purpose is of measuring these activities are and it’s not to be big brother, it’s to help all of us grow, stay on track, share best practices, recognize those that are doing exceptional. And when you can create that type of culture in your organization, then it’s just like a machine. And I so much believe that the financial services businesses is so much a momentum business. When you can get things rolling and the momentum is happening and the confidence is building and people are sharing best practices and they’re holding each other accountable and they’re teaching each other, boy, can you make some big things happen. But unfortunately momentum can go both ways.
Ben Jones: Now I’m curious, we talked a little bit about the fact that a strategy is a long term vision and so if you set this kind of three, five year, whatever your time horizon is, strategy or this vision of what you’d like to be, as you start approaching that deadline, if you will, whether you’re on track, ahead of track or off track, how often do you need to actually revisit that strategy? And when do you determine it’s time to rewrite the next phase or the next chapter of that book?
Bill Whitehead: The purpose of the strategy is really to keep the team focused and focused on what the end result is at that time. Once you set the strategy for the year, all things being normal, which this year certainly has not been and we can chat about that in a minute. Then you stay focused on that strategy for the entire year with your biweekly meetings, holding people accountable, making sure those that are owning certain tasks or activities are on track with what they own. Then that’s what your annual planning meeting is for is to revisit the strategy. And that’s why we call it an annual strategy session. Usually there’s not huge shifts in strategies. It’s rare that I see that, but there are times where people pivot. The only thing constant in life is change so the owner or CEO may have had a life event that determines that they want to change strategies and that’s fine. And that’s what your annual strategy session is for is to revisit those strategies on an annual basis.
Ben Jones: I like that. And so you mentioned this year not being a normal year. I think everybody would second that. I don’t know anyone who thinks it was a normal year and it looks like 2021 is setting up to be an interesting one as well. How do you allow these external forces to drive or change your strategies?
Bill Whitehead: There’s so many things in the world that we can overreact to at times and that tends to happen more often than under reacting. In other words, there’s always noise going on around us. The media is so great at blowing things up and building the next major crisis. Generally speaking, we have to make sure that we don’t let the noise all around us throw us off track. Certainly we can’t just put blinders on and plow through things. When things come up, yes, that’s when you take your time as a team and you revisit something and say, “Okay, is this something we should really visit and pivot?”
Bill Whitehead: But I would say most of the time, that’s not the case. Now this year, obviously with COVID, is something brand new. And yes, it is big and it has had a huge impact. And so definitely there had to be some strategy changes or pivoting as we went through this new experience that none of us have ever been through before. And I coach about probably now nine or 10 firms and we definitely had to pivot. We had to at this point, make some changes and adjustments. I’ve talked to lots of other firms and other people that unfortunately didn’t pivot or didn’t make adjustments or stayed totally on the defense and they’re having bad years.
Emily Larsen: As we wrap up, one major takeaway from this conversation is the importance of a trusted accountability partner. Someone who will hold you accountable, problem solve with you and really keep you on track to achieve your vision of success. And don’t forget if you don’t know where you’re going, every path will lead you there. As we mentioned, being a coach is really in Bill’s DNA so we asked him for his perspective on what the benefits of a coach are.
Ben Jones: What is the actual primary benefit that a coach brings?
Bill Whitehead: The real primary benefit most times is helping keep that CEO or the team members focused. First of all, we help facilitate that planning, annual planning, strategic planning, whatever you want to call it and come out with an executionable plan. That’s the first step where that third party can really be of help. But then after that, it’s really about holding the team accountable. And so by having regular calls, whether it’s twice a month, once a month, having those calls, keeping them on track, reporting any progress you’ve made, any issues they’re having, having those discussions, those types of things. Typically that’s where the big advantage is. This year, certainly with COVID it was being able to have that third party be there to give you perspective. Most of my advisors, when it first happened, of course, everybody was on the defense and calling clients from a defensive mode, not reaching out, putting all their prospecting plans on hold and canceling even servicing meetings with clients and just really sort of cocooning.
Bill Whitehead: And so our job as coaches at some times is to point out alternatives and where they need to pivot. And so giving you an example, advisors that were still six months into this, not doing any prospecting, not doing any face to face servicing calls, not comfortable with Zoom or using technology and waiting for the vaccine to come. Next week, next week, next week. My role as a coach is to say, “What if? What if we’re one year in and this hasn’t changed? What impact does that having on your business? What impact are you going to have on your clients with the approach that you’re utilizing now if this continues on? What can we do to change that? How can we change that? How can we shift from being totally on defense to moving more to offense?”
Bill Whitehead: Because you and I know it’s in times of crisis and volatility in the market is when people and their money move. It’s the hardest time to build your business in my opinion and grow your business is when you’ve had a 10, 12 year bull market and everybody’s happy and nobody’s upset and they’d rather be on the golf course than talk to you about their plans because they think everything’s wonderful. Right now is a great opportunity. And the reason a lot of the clients I’m dealing with are up so much is because we certainly went on the defense initially and made sure we reached out to all our clients. But then we pivoted very quickly and went on offense and strategized on what we can do and came up with ideas on how we could grow our business during these times. And because so many other advisors aren’t doing it, we’re having some great success with it.
Ben Jones: Thank you for listening to Better Conversations, Better Outcomes. This podcast is presented by BMO Global Asset Management. To access the resources discussed in today’s show, please visit us at www.bmogam.com/betterconversations.
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Emily Larsen: I’m Emily Larsen. From all of us at BMO Global Asset Management, hoping you have a productive and wonderful week.
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