Inspiring Accountability in Leadership for RIAs • Financially Simple

Accountability in leadership is essential for the success and growth of any organization. Yet, you can have wildly different results depending on how you motivate your team to accountability. In this blog, I’m show why it’s a combination of accountability, responsibility, and authority, that will open doors for your eight-figure exit. More than this, I’ll discuss seven ways to inspire these traits in your leadership team. Although, I’m specifically speaking to financial advisor-owners, this concept can be applied across all types of businesses. So, regardless of your industry, you don’t want to miss this entry!

---

Follow Along With The Financially Simple Podcast!

This week on The Financially Simple Podcast:

• (1:07) How do you make way for the eight-figure exit?

• (2:02) How are you impacting your employees?

• (3:23) The carrot and stick

• (5:33) Reduction of micro-management

• (7:38) Authority, responsibility, & accountability: defining them as tenets of leadership

• (8:54) 7 Ways to implement responsibility, accountability, and authority

• (12:37) Create “psychological ownership”

• (16:22) ffffThe trickle down effect

---

Decentralization: The Key to an Eight-Figure Exit

As the owner of your RIA, you likely play a significant role in its day-to-day operations. While this makes sense early on in your firm, it can become a major liability as you grow. If you’re striving to build an RIA that can pave the way for an eight-figure exit, you have to remove yourself from the epicenter of the business. In order to do this, you must inspire your leaders to embrace a culture of accountability, responsibility, and authority. But how do you get them to take ownership?

The Carrot & Stick Method

One classic motivation technique is the “carrot and stick” method. This typically leverages your teams’ fears (the stick) and desires (the carrot). However, this strategy rarely creates a scalable and replicable culture of accountability. I like to think of it as a charioteer riding behind his team and cracking the whip. In this scenario, your team will only be motivated enough to not be whipped. I believe a better method of leadership can be illustrated, using a tourist attraction we have here in East Tennessee.

Dolly Parton’s Stampede is a dinner show that involves teams of horses and riders. Unlike the charioteer, the riders in this show are actually mounted on their horses and charging into the competition as a cohesive team. In this show, you can tell the horses are well cared for and are genuinely enjoying performing with their respective riders. They have a relationship of trust. That’s the type of leader we should all aspire to be. Marching out in front of your team, empowering them to take action and be the best they can be.

Micro-Management

At some point, you’ve probably worked with a micro-manager. The majority of workers in the US have experienced this management style before, but what is micro-management? There are some who mistakenly claim they’re being micro-managed if their superior asks accountability questions. So, let’s define micro-management just to make things crystal clear. Oxford Languages states that micro-management is to “control every part, however small, of (an enterprise or activity).”

So, there are times when employees may accuse their supervisors of being micro-managers, but all that’s happening is they’re being held accountable. However, micro-management is common in the workplace. In fact, Harry Chambers, author of the study, My Way or the Highway: The Micromanagement Survival Guide, says that 79% of respondents had experienced micro-management. Another 71 percent claimed that micro-management interfered with their job performance.

High Trust Organizations Thrive

As you decentralize, you must show trust in your team by allowing them to do things according to their individual skills. You want to give them the assignment and then get out of their way. In doing so, you enable them to grow and take ownership of their respective areas. More than this, you have to let them know that it’s okay to make mistakes. If you’re creating a culture of trust and safety, you’re allowing your team to become the best version of themselves.

Harvard Business Review published a study on the neuroscience of trust back in 2017. What they found was that employees at what they qualified as “high-trust” organizations experienced a variety of benefits. Let’s take a look at the numbers! Employees in these organizations report:

• 74% less stress.
• 76% more engagement.
• 50% more productivity.
• 40% less burnout

So, how can we leave behind the traditional motivational practices of dangling a carrot on a stick and micro-managing our teams? I believe accountability is the answer.

Accountability, Responsibility, and Authority

Roger Connors, CEO of Partners in Leadership once said, “There’s a crisis of accountability in organizations today, a crisis of epidemic proportions. When properly approached, accountability can really be the low-hanging fruit for optimizing organizational performance and accelerating organizational change efforts.” But what do accountability, responsibility, and authority really mean? Once again, let’s see the definition so that we’re crystal clear.

• Accountability: The Britannica Dictionary describes accountability as being “required to explain actions or decision to someone.” 
• Responsibility: Conversely, they define responsibility as “the state of having the job orduty of dealing with and taking care of something or someone.”
• Authority: Finally, Britannica says authority is defined as “the power to give orders or make decisions; the power or right to direct or control someone or something.”

Now that we have clear definitions, we can begin to look at ways to inspire (not mandate) accountability, responsibility, and authority in your leadership team. Once they’ve caught this concept, they can begin to use the same tactics to inspire these traits in their direct reports. As this trickles down throughout your firm, it has the power to transform your practice. Folks, this paves the way for the eight-figure exit.

7 Ways to Inspire Leadership to Make Way for the Eight-Figure Exit

If you want to decentralize, you’ll need to trust your leadership team to handle the day-to-day operations of your RIA. Through these seven tactics, you can develop your team into a group that you trust and is capable of driving toward your goals. By taking these steps, you empower your team to become the best versions of themselves, and you empower yourself to work on your firm, rather than in it.

Create a Culture of Accountability, Responsibility, and Authority

Create a Safe Environment

Accountability requires trust, and one of the ways you can build trust is to create a safe environment for your team. Your team needs to know that if they make mistakes, they’re not going to be fired. When they can act autonomously without feeling threatened, they’re able to develop and reach their full potential. In turn, this leads to greater team cohesion, confidence, and a sense of connection to the work they’re doing.

Be Accountable to Your Team

Friends, let me tell you, I have made mistakes as a leader. It’s just part of the human condition. So, one of the ways you can inspire accountability in your leadership team is to be accountable to them. If you make a mistake, own it. When your team sees you being vulnerable, it lets them know that they can also be vulnerable.

Set Clear Expectations

Next, you must set clear expectations. I can’t tell you how many times I’ve heard business owners approach their marketing department, saying something like, “Get more leads!” Friends, it doesn’t work like that. If you’re using this method, let me tell you… your expectations are as clear as mud to your team. Rather than telling your sales team to do more sales, use real data to provide a measurable sales goal.

For example, you might say, “Team, looking over the past six months of sales data, we’ve averaged 7.2% of growth in our sales department. I’d really like us to be reaching that 8% mark more consistently.” This tells them exactly what you want and it makes them accountable to your expectations.

Conduct Regular Review Meetings

Another way you can inspire accountability, responsibility, and authority is through regular review meetings. Depending on the cadence of your company, these meetings could be weekly, monthly, or quarterly. This creates a dedicated time for your team to ask clarifying questions, report progress, or discuss barriers to completion.

I sincerely believe that people wake up each morning with the mindset that they’re going to do the best they can do. We all want to do good work. It’s just part of our DNA. Regular review meetings allow your team to hear your perspective on what they’re doing. Now, they might disagree with you, but they will at least have the opportunity to correct their course and move in the direction you desire.

Empower Your People

Friends, I’m a firm believer in giving my team an assignment and then getting out of their way. When you allow your people to take the initiative, what they accomplish may surprise you. When I learned to do this in my own businesses, I began to see my people’s talents flourish. So, give them opportunities to surprise you and reward the behavior you wish to see. Not only does it often lead to great results in your business, but it also leads to greater workplace satisfaction for your team.

Create Psychological Ownership

Finally, you want to create psychological ownership. What does that mean? Basically, it’s when you feel or behave like an owner, even though you’re not a shareholder. According to Philip Palaveev, CEO of the Ensemble Practice LLC., industry consultant, and expert on building a growing and profitable financial services enterprises, creating a sense of psychological ownership when it comes to advisory firm owners is a complex task and comes with some critical preconditions. Team members who meet these preconditions are likely to take psychological ownership.

Wrapping Up…

Folks, when you inspire your leadership team to accountability, responsibility, and authority, there’s no limit to what can be accomplished. I’ve seen it in my own businesses. I’ve also been fortunate enough to witness it in the businesses of my clients. Yet getting there will take some time and adjustment.

Look, I know life is hard. I get that. But life is good. Inspiring real and lasting accountability in your leadership team can be frustrating, but it doesn’t have to be. By following these tips, and avoiding the pitfalls of micro-management, you can make creating accountability in your RIA at least financially simple. Hey, let’s go out and make it a great day!

Change management is a long and often difficult process. You don’t have to do it on your own. Reach out to our team to learn more about the ways we could help get the most out of your team, so you can reach the eight-figure exit!