The Benefits of Leveraging Others

As they say, a person only has two hands and there are only twenty four hours in a day. If you are like me, you can only do one thing at a time…but its done well. Multi-tasking, in my opinion, is over rated and potentially prioritises quantity over quality. The point is, no matter which way you look at it, what a person can achieve by themselves is limited, even when operating at optimum efficiency, there is a ceiling that will inevitably be reached.

Leveraging other people to accomplish more than what you alone are able to achieve is the next logical step if you want to break through that ceiling. From a business perspective, this is the point where you recruit staff to fulfil certain tasks that will enable you to focus on those which you deem to be more important in growing your business, servicing your clients, managing risk etc. The decision will be made based on a cost versus benefit assessment ie. will the cost of recruiting a person to help me be more than outweighed by the associated benefit of me being able to focus on the more critical stuff, benefit in the form of additional revenue and ultimately increased profitability? The only problem with this is the fact that over time, as your business grows and you recruit more people to do more things for you, you run the risk of becoming a business manager, worrying more about staff and infrastructure management than about your clients and the service or product you started out with. For some this may be fine, as they may revel in the challenges of business management. For others however, they may feel more removed from their core function and what they enjoyed doing most, the reason that they started the business in the first place.

More and more, one is seeing the pooling of resources and sharing of infrastructure in order to achieve  increased efficiencies for all, ultimately to everyone’s benefit. A great example of this is in the medical profession, where a number of doctors, dentists and optometrists share infrastructure such as office buildings, receptions, telephone systems, IT systems etc to benefit from the associated economies of scale, thereby improving everyone’s profitability.  

A similar move is afoot in the independent financial planning space. Independent financial advisers who hold their independence dear to their hearts and view and market this independence as a key differentiator and value proposition to their clients, who resist the temptation to join larger product houses’ distribution forces, are similarly starting to consider joining larger independent financial planning practices. Doing so affords them the opportunity to benefit from economies of scale that exist in sharing support staff resources to service clients and process instructions, IT infrastructure with all the business continuity and licencing requirements, office buildings and meeting rooms where client consultations can be held, to deal with the myriad of compliance requirements which are becoming more onerous in the industry by the day.

Getting other people to help deal with these important parts of the management of a professional practice, so that the Financial Planner can focus on his core value proposition, being the provision of independent financial advice to a client with whom he builds a lifelong relationship, is precisely the way to break through that efficiency ceiling.