Your Role Players—How financial services teams can thrive with them.

by IdeaTransfer on July 23, 2011

On  great basketball teams it’s the stars who get the attention, seldom the role players.  Then why do the stars with great role players stay with their team, while stars without them want out?  Because role players make the stars and the whole team perform better.

There are two kinds of role players common to advanced market financial services firms—horizontal and vertical.  With both types we find it too rare that the founders of the firms manage their role players effectively.

Horizontal Role Players

Many of our clients founded their firms to achieve an independent position in the marketplace and to establish their reputations in advanced market planning.  Over time their expertise became highly specialized and many felt they were passing by opportunities to help clients with more diversified services.

  • Family financial issues inevitably link to family business issues for business owners.
  • Business continuity planning naturally lead to risk management, human resources, and ownership transition opportunities.
  • Executive benefit programs expose the need for personal financial planning for highly compensated employees.
  • Wealth transfer planning and asset management services seem like a tight fit.
Diversifying the firm’s capabilities increase revenue potential per client.  Diversifying revenue models–fee based, commission-based, performance-based–moderates cash flow to improve firm value.  A narrow specialization leaves gaps in client planning that other professionals can infiltrate, while closing those gaps fences competitors out.  Sometimes the right person showing up at the right time makes diversification the right thing to do.
Horizontal Trap

Financial services specializations typically involve distinctively different expertise, different planning cycles, different decision-makers, different implementation and service–and most important different personalities and relationship skills.  That’s the criteria for successful horizontal role players.  But in time these differences can lead to fragmentation within the firm–diversification by silos.  That is never a good outcome.  The mutuality and interdependence that can transform a firm into a team slowly fracture.  Camaraderie, healthy competitiveness, and loyalty start slipping away.

But here is the worst outcome. It is very rare that each silo brings in the same amount of new business.  Typically, smaller silos feed off the big silo.  Revenue sharing and cost sharing inequities become troubling–bad enough when good accounting systems make them clear, but even worse when everyone relies on gut feelings.  Silo A producer is a great networker.  Silo B producer is a great relationship manager.  Who’s contribution adds the most to the top line and the bottom line?

To be really successful producers in smaller firms expect to be out of the office with clients.  When each silo is successful, producers are less like to see each other, let alone celebrate each others’ victories or be available for help along the way.  The synergy that could boost everyone’s performance and add value for clients is lost.  The firm talks the team talk, but walks separately.  Clients can see it, but they don’t see what they’re missing.

In larger firms with levels of management the separation often gets worse.  Each silo has its own leadership, its own culture, and even its own clients.  Good people somehow fall into aristocracies and bureaucracies, protecting their interests instead of adding value to clients.  Ever wonder why clients seldom connect their own advisors–legal, accounting, investment, insurance, etc?  Maybe they realize their advisors aren’t connected within their own firms.

Vertical Role Players

Horizontal to vertical is a move from diversification to replication.  Most of the clients we’ve worked with for many years early and expertly in their careers grasp the relationship skills and technical knowledge on which advanced market success is built.  However, there is only so much producer time to go around to nurture relationships.  They get caught in a dilemma between the vital few clients who produce the most revenue and referrals versus the significant many who will be profitable only if they don’t overload systems and steal time.

Most producers think the obvious solution is to replicate themselves by adding a second tier of producers—role players they can mentor up the advanced market ladder.  Some are newbies just beginning in the business.  Others are experienced but hit a wall.  What an opportunity for everyone.

  • The producer has limited relationship capacity, but the firm has excess resource capacity for a second tier.
  • Younger producers or professional advisors can take on increasing functional aspects of client management as they develop.
  • Eventually they will build their own relationship networks on the founder’s model and rise to partner or successor.
  • Or, experienced producers with suitable networks but limited resources could also expand their production using firm resources.
  • Role players as a second tier increases firm revenue and value.

The Vertical Trap

Replication is not a slam dunk.  The system that spawned and nurtured so many independent advanced market financial professionals exists only in remnants. What they went through cannot be duplicated, so how will firm founders find the time to play mentor to their doppelgangers.  Role players were brought in to add to the founders’ time not drain it.   The fantasy of mentoring quickly converts to a sink-or-swim challenge.  ”I did it, go prove you can do it.”  Role players and stars get frustrated.

Meanwhile experienced producers given access to the firm’s resources and intellectual capital in return for access to their networks often have second thoughts.  They question the relative value of this trade, creating revenue-sharing dilemmas and disincentives.  Or in some cases, why they hit the wall becomes obvious.  They are not replicant material.  Either way both sides feel frustrated.

Role Player Solutions

Do these descriptions hit any tender areas in your firm?  In most cases the problems stem from unclear expectations, inadequate structure, and insufficient communication–in other words, fixable.

  • Expectations—entrepreneurial founders favor action as proof of success, but role players generally need and want a plan to follow.  Integrating the two processes solve the impasse.
  • Structure—while handshake trust is admirable, mutual agreements documenting actions and accountability on each side of the handshake validate that trust.
  • Communication—the frequency of face-to-face, phone, email, and text interactions should increase dramatically, so the team always has access to what just happened and what happens next.

When these problems are not addressed early, it will look to both sides like they can’t be reversed.  Emotional baggage has already accumulated, so neutrality has to come from outside.  An outside coach can gain the trust of firm members and implement these kinds of changes incrementally.

Let the starting point be your clients’  best interest.  Role players are in the clients’ best interests.  Conceptual buy-in to having and being role players is relative easy and quick when you take the clients’ perspective.  But transforming that concept into team performance works best as a coaching exercise over rolling quarters.  When we are engaged to work with role players, our role is represent the client, to challenge and support all players, to add our creativity and bring out their creativity, and to manage accountability for both players and team.

A bi-weekly group meeting or conference call with short individual sessions in between is one effective approach.  We’ve seen remarkable change in 30 days, enough traction for sustainable results in 90 days.  Then the intervals can spread out and coaching evolves into troubleshooting with an annual check-up.

The role player concept—horizontal and vertical—can be essential for the longevity of most financial services firms and the responsible way to deliver firm continuity to clients.  But when it screws up, the firm sustains major operational injuries and reputation trauma.


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