Sustainability pillar #4: Building a robust operational model

Sustainability pillars 1, 2 & 3 have focused on the importance of having a manageable number of clients, enterprise risk and delivering client satisfaction. This pillar focuses on building a robust operational model.

We know that revenue is a critical factor in the sustainability of a business. However, we believe that a robust, repeatable and scalable process converts revenue into sustainable profits. So how do you build a robust operational model? One of the easiest, but often overlooked ways, is to have a clear documentation of your key processes.

Although it may seem like an unrewarding task to map out your key processes, we believe doing this has the potential to provide an advisers business with operational benefits. Done properly, this exercise can provide tremendous benefits for growth. You may be surprised, but your clients will be the beneficiaries of the documentation of your processes. Your clients will begin to understand the additional service they are being delivered and will also begin to learn a level of consistency in their experience, making it easier to articulate the value of the relationship.

As the client experience becomes a growing competitive differentiator, defining key processes is quickly becoming an increasingly strategic area of focus for top advice businesses.

Additionally, an ‘operations manual’ that is implemented, followed and reviewed will provide better business efficiency. An operational manual can assist your team to know who does what, when and how, it can also help develop a team to be more self-sufficient, providing more time for you. As your business grows, adding team members will be easier with an established service process. Furthermore, an operational model builds consistency and therefore reduces errors.

If you are considering options such as off-shoring, outsourcing or using technology more to provide greater efficiencies, documenting your key processes is essential to making these options successful and will maximise the quality that is delivered. In our work with advisers, we’ve identified six key areas where the adviser needs to exhibit a high degree of execution while avoiding errors. These milestones reflect the key gates through which many successful advisers achieve above average growth.

Successfully managing the product inventory in your business is an important step toward building a sustainable practice. By conducting a product inventory audit, you’re taking a crucial

For each of these milestones having a documented process of how you and your team engage with your clients and deliver your service, will help you create better business efficiency. Defining and documenting these milestones can be done in three easy steps.

STEP 1: DISCOVERY - Identify the processes within each milestone and define what you are trying to achieve for the client. Ask yourself questions like... “what are we currently doing?” “what could we do better?”

STEP 2: DOCUMENT – Take the results from your discovery and turn them into a tangible document. Capture in writing the execution process for each milestone. This document will become the guide for you, your team and your business.

STEP 3: OPTIMISATION – Review your key processes at least every 24 months. This ensures you adapt to any changes in your team, client base and the industry landscape.

If you start with defining and documenting the key areas of your business, you can then start to look at your entire business. There may be other areas that you can define and document that will add to the efficiency of your business.

The benefits of defining your key processes

Tedious as it may seem, defining, documenting and continually optimising key processes has several benefits:

  1. Reduce the number of errors
    By identifying areas that are critical for seamless execution, the business is able to support those areas with methods of accountability.
  2. Establish role clarity
    By identifying the key processes that drive the business, you are in a position to align personnel with the processes. Gaps in the client experience are effectively closed while areas of potential personnel overlap are largely remedied.
  3. Reduce key personnel risk
    One of the byproducts of establishing role clarity, in particular is that key personnel risk is reduced in two ways. On the one hand, staff may be less likely to leave because they feel greater job satisfaction knowing their role and the corresponding definition of success. On the other hand, if a key person does decide to leave the business, the process documentation reflects that individual’s tacit knowledge – thereby decreasing the impact of a team member’s departure. Additionally, it means the business is less reliant on you knowing everything, giving you time and freedom to focus on the business, not in the business.
  4. Potential for enhanced business value
    Detailed, written documentation of the key processes that make a business successful has the potential to enhance the value of the business. As a business grows, it can create efficiency and capacity for more growth. In the event of a sale, the business will be more attractive to purchase a new owner could relatively easily continue to deliver on the business’s commitments and expectations of the clients.
  5. The bottom line

    Defining and documenting your key processes may feel like an unrewarding, time-consuming assignment. However, creating an operations manual that documents your key processes, makes your business more efficient and may increase the value of your business.

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