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Which is more important when running an advice business: being effective or efficient?
You chose Effective? Wrong.
You chose Efficient? Wrong.
The correct answer is that you have to balance both.
In days gone by plenty of people in financial services could build a business just be being effective, regardless of how inefficient they or their practice might be. They were fabulous at landing clients and getting revenue in the door…and the rest sort of looked after itself. Or didn’t. But if it didn’t, then it didn’t matter much.
Then there were the efficient, who were so diligent and assiduous that they got by even though there were far less clients coming through the door than competitors seemed to have. They ran a tight ship and made every opportunity count accordingly, but were just not very effective at leveraging their brand or their business.
If there is one thing that I see regularly with advice-based businesses is that they tend to lean towards being highly effective, though not always terribly efficient. That puts them in survival mode:
Those who are not terribly effective are incredibly busy being busy doing stuff, and doing that stuff very well usually. And they flame out because of it. Too few customers with superbly detailed and compliant plans which are wonderfully well researched…and not enough people in the pipeline as potential future customers (perhaps because too few want those wonderfully detailed master plans?).
It has never been more important in the advice profession to balance both. Strategy is is critical to getting the direction right, and to ensure that the effort and resources are being applied to the right things that drive the right business results. The tactics, or execution of the strategy, is about doing those things right.
The objective is ultimately to be doing the right things the right way. That means being effective and efficient.
Doing things right isn’t enough….your business will struggle to survive. Doing the right things isn’t enough if you aren’t doing them well. You’ll get by…survive…but that is it.
To adapt to the new world order advisers need to get their vision and strategy for the business clear so that they can then figure out what needs to be done most effectively to execute it. Then, but only then, does the focus shift to how to do that efficiently. The bottom line though is that advisers who will prosper the most have to master both.
Related: Getting Clients Onboard with Comprehensive Advising