If you’ve started to think about finding a successor to take over your financial advisor business, focus on the most critical roles you currently hold while running your business. It’s important to understand that you’re not only the business owner, but also the leader and business manager. Why make a distinction between these roles? Because each requires a specific set of attributes to succeed.
The most challenging trait to identify and test is leadership. Let’s talk about the common traits of a successful leader. In an article recently published by Development Dimensions International (DDI), the main factors cited to help find future leaders with high-potential included the following:
- Propensity to lead
- Learning agility
- Brings out best in others
- Culture fit
- Passion for results
- Conceptual thinking
- Receptivity to feedback
- Navigates ambiguity
PROPENSITY TO LEAD
Propensity to lead may be one of the easiest leadership characteristics to spot. Do you have an employee who naturally provides ideas on how improve the practice? One that the staff looks to for reinforcement and direction when you’re not available? One who demonstrates a commitment to the business before self? This may be your next leader.
BRINGS OUT THE BEST IN OTHERS
A true leader is able to bring out the best in others. Simple to say but very difficult to achieve. To identify a nurturing leader, look for one who also provides consistent, clear direction to employees. Enthusiasm is contagious. A team that works together and enjoys rewarding challenges will do its best to acknowledge strong leadership.
PASSION FOR RESULTS
Always forward-thinking, a leader has a passion for results. With a foresight for outcomes, Steve Jobs took Apple from a garage start-up to the most valuable tech company in the world. And, while many would agree he wasn’t the perfect leader, his vision tended to be spot on. Plus nobody ever doubted his passion and commitment to the company.
Authenticity is another key trait. Your team will unmask a weak leader quickly. What sort of common character flaws are an issue? Aloofness, emotional volatility, entitlement, unreliability and eccentricity all trigger a sense of unreliability.
RECEPTIVITY TO FEEDBACK
Whether running the company or moving up in the organization, a leader always looks for feedback and receives it willingly. Someone who has a defensive personality can’t lead well. The culture of the organization suffers if the leader can’t be open to receiving input from everyone on the team.
Learning new things with agility supports leadership growth and helps leaders change direction quickly, if necessary. Good leaders look to learn new things to expand their perspectives and grow their businesses. The corporate world is awash with examples of leaders who stayed the course while the whole world changed around them.
Does your candidate fit into the culture of the firm? As Andrew Keyt, a professor at the Business Center at Loyola University, said: “Culture eats strategy for breakfast every day.” You built your financial advisory firm around the ideas and beliefs you developed, to provide clients superior financial advice. If your potential successor does not buy into the culture you’ve developed, move on. Your clients and employees need a leader that understands and appreciates what your business stands for.
Conceptual thinking aids communication and leadership. As a manager and owner of a financial advisory firm, you must focus on a significant amount of details. Attention to detail is part of the business role the new leader will need to take on. But if a leader gets mired down in the ever-critical details and has no time to think strategically, the business will eventually falter. Thinking conceptually is a critical element of the leadership role.
Without adaptability, leaders cannot provide the team a flexible, growing work environment. We’ve all worked for people that seem to apply yesterday’s “rules of the road” to today’s challenges. This rigidity tends to stifle team enthusiasm, New ideas and strategies repeatedly get choked out by outdated decision-making criteria. Phil Jackson, who won eleven NBA Championships with the Chicago Bulls and Los Angeles Lakers, stumbled during his tenure as President of the New York Knicks. Jackson had most of the leadership traits we’ve reviewed but stumbled in one area: adaptability. Just because his offensive scheme worked with the Lakers and the Bulls, forcing the Knicks to adopt it (without the right personnel) caused internal team conflict and was a major factor in his departure.
Decision-making in turbulent times requires a leader to navigate ambiguity and keep the company moving forward. This is a critical characteristic for leaders of financial advisory firms, especially over the past ten years. As one would imagine, change is constant. Effective leaders will make many decisions without all the facts they’d like. The ones that use all their available resources will build decision-making confidence as time passes.
We’ve covered ten foundational characteristics many strong leaders exhibit. Candidates you’re reviewing as high-potential successors should have the traits of successful financial advisors. While the candidate may not exhibit all these traits immediately, it is your responsibility as a leader to be able to identify the potential. If you see yourself in their leadership traits, continue mentoring them until you find the perfect successor for your financial advising business.