InvestmentNews reporter Lisa Shidler posted a story on Friday how one advisor's delegation of work to employees jeopardized the survival of the firm during a period of high staff turnover.
Take three minutes to read the story of Rick Kahler, founder of Kahler Financial Group, and how his office once was "spiraling out of control" due to too much delegation.
This being the Commentary section of advisors4advisors.com, I'm going to hop on a soapbox and add my two cents to this story.
In my opinion, Kahler's problem wasn't that he outsourced many of the firm's processes to employees. In fact, outsourcing tasks that do not play to an advisor's strength (marketing, scanning, or generating quarterly performance reports for example) is a good thing!
I believe the problem with Kahler Financial Group was that the firm lacked a comprehensive and easy-to-search operations manual that described how to perform all the critical tasks needed to run the firm.
Back in my days as a programmer with LeapFrog, I wrote code for electronic learning toys that did some pretty fascinating and surprisingly complicated things. The most important lesson I learned in that position was how critical it was to comment and document code. In almost all circumstances, comments and documentation took up twice as many lines in a file than the actual code itself! The reason was because in a collaborative programming environment such as LeapFrog, the better the comments, the easier it was to debug, update, and maintain sections of code written by other programmers (and to remember what I was thinking when I wrote a script at 3am).
This principle translates directly to the back office operations of a financial planning and wealth management firm. It is absolutely essential that the critical tasks and procedures to the firm's operations be documented. In addition, procedures needs to be written in a way that leaves no detail unaddressed. In the words of Spenser Segal, CEO of ActiFi, spoken at the FPA Business Solutions 2010 conference, "Any process defined above the 10 foot level is unexecutable by someone not skilled in the process."
I made a note to myself to add advisors4advisors commentary to highlight tools and resources that can be used to construct a comprehensive operations manual. But in the meantime, no tool will substitute for the fact that procedures need to be written in the first place, and there's no better time to start writing than right now.