The Dimensions of Leadership

What IS leadership?  How do you cultivate it in yourself and your staff?

Every year I try to describe how different our Insider’s Forum conference is from the traditional conference experience—and I think I mostly fail in the attempt.  The Insider’s Forum was created out of a long wish list compiled over 30+ years of attending and covering other conferences in our space—and from my co-producer Jean Sinclair’s 25+ years of attending and managing some of our most successful planning conferences.  We started out with a wish list that grew more focused over time.

We wanted dynamic keynote speakers who were part of the financial planning culture, rather than celebrities who didn’t know an ETF from an annuity.

We wanted breakout sessions that would be challenging to the most advanced and accomplished members of the planning community.

We wanted sessions where the speaker wasn’t selling from the podium.

And most of all, we wanted a conference experience that was specifically created for the best and brightest–an underserved category in the planning community.

This last was an important distinction, we felt like this was a hugely underserved population.  I think most you know how this feels: somewhere along the way I no longer felt challenged by the content I was seeing.  It felt like I’d heard everything they were saying, and the conference organizers seemed to think that relevant thought leadership would be too advanced for their audiences.

And here’s the biggest issue of all: over and over again, I saw people attending conferences and then going home, and nothing changed.  The notes, to the extent anybody took them, were safely stored away in a filing system and ultimately forgotten.  It was as if the conference had never existed. 

So I think of the Insider’s Forum as an instrument of change.  We’re trying to prove that there’s an audience for the most advanced content, for new ideas, and most of all for people who will go home and do something about what they saw and experienced and learned.

At the same time, we’re also trying to create a very different exhibit hall experience. 

Over and over again, conference after conference, I would see advisors walk past the exhibits trying not to make eye contact, because they know the booth representative is there to sell them something they don’t want or need, or get them to sell something to their clients that THEY don’t want or need. 

So we decided that for the Insider’s Forum, we’d only invite companies who we felt were positive contributors to the planning ecosystem.  Not the salespeople, glad-handers and product pushers, but companies who we felt had something beneficial to offer the advisor attendees. 

Finally, we made a conscious decision to include the forgotten half of the financial planning profession—the operations professionals who do the unseen work that helps create scale and consistency in client service delivery. 

As far as I know, the Insider’s Forum is the first and still the only annual meeting that includes an advanced operations track, with sessions specifically designed to promote the knowledge, experience and opportunities of the profession’s CEOs and operations professionals—a cohort that has its own body of knowledge, and grapples with its own unique challenges regarding scale, efficiency and client service. 

Of course, when your target market is firm owners, operations leaders and unusually successful advisors, then the networking opportunities and hallway conversations (which typically comprise at least half the value of a conference experience) can be extraordinary.  We try to encourage and facilitate these conversations with generous times between sessions, and space and reasons to converse. 

Each year we focus on a theme that we believe is important to the profession.  This year’s theme, at our conference in September in Nashville, TN, was “leadership,” which of course impacts many dimensions of an advisory firm’s trajectory.  And it also addresses an odd scarcity in the profession both in the front and back office.  As Philip Palaveev, of The Ensemble Practice and G2 Institute noted in his keynote presentation (with Janki Patel, Associate Consultant with The Ensemble Practice): “One complaint that we never hear is, oh, we just have too many leaders.  We have so many that we don’t know what to do with them all.” 

Angie Herbers, who offered her own keynote presentation on leadership at this year’s conference, pointed out that the profession seems to have an abundance of managers (who tell people what to do) and a shortage of leaders (who lead, direct and inspire their firms forward)—and it would be highly beneficial for the profession if we corrected that mismatch.

But what IS leadership?  How can you define it?  How can you develop leadership in yourself, and in the key members of your staff? 

These sessions, and our opening keynote presentation, did a remarkable job of not only clarifying the nebulous concept of ‘leadership,’ but of showing us how to cultivate leadership in ourselves and others.  As an aside, I think this may be one of those articles that you should consider sharing with your entire staff.

Vision, values and trust

Let’s start with the opening keynote.  The format was a bit different from what we’ve done in the past; instead of a Bob Veres presentation, we had Bob Veres sitting down with a series of special guests and asking them to provide thoughts and ideas that would be actionable to the audience.  The first two guests were Herbers and Roy Ballentine, whose Ballentine Partners in Waltham, MA has been described as the best-managed advisory firm in America.

My first question was: How do we become better leaders, and what issues should we pay attention to in that process?

“As I think about leadership,” Ballentine replied, “the first thought that comes to my mind is a question: why would anyone want to follow me?  Or: Why would I choose to follow anyone else?

“I think the answer,” he continued, “comes down to two key things: vision and values.”

Ballentine told the audience that, in his experience, effective leaders have a vision that is somehow appealing to those who choose to follow.  More than that, an effective leader needs to demonstrate, in the manner that they conduct themselves, a set of values that somehow is aspirational and attractive to the followers.

“Effective organizations are led by people who are very congruent and thoughtful about living the values that they espouse,” Ballentine continued.  “I’ve been in a lot of companies that have plaques on the wall that say: Our Core Values.  But when I spend enough time in the organization to be able to learn whether or not the leaders are actually living the core values, I find a big difference between the organizations where the leaders ARE living their core values—they are effective—and the ones where the leaders are not living their core values, whose organizations generally are struggling in a variety of different ways.”

Ballentine concluded his view of leadership with a final thought about the importance of getting the right people in the right seats.  “As I study that issue more and more,” he said, “I have concluded that it does not make just a little difference.  It’s an enormous difference of effectiveness between the organizations that actually succeed in getting the right people in the right seats, and those that are less effective at that.”

Remarkable answer!  What could Herbers add to that?

“I would dovetail on what Roy said,” she told the audience, “that vision and values are very very important.  Knowing where you’re going is important.”

But then she said that at the very most fundamental level of leadership, you always find trust.  “If you do not trust yourself, and you are not living the values that you’re asking other people to live, you’re breaking trust with yourself,” Herbers told the audience.  “And when you break trust with yourself, then you’re breaking trust across your entire organization, with your employees and with your clients.  When you talk about having problems in your business, or leadership in general, you have vision, you have values, but if you don’t have trust—particularly trust in yourself—you have nothing.”

Herbers concluded:  “True leaders are people who first trust themselves—which means you make decisions, sometimes hard decisions, and you take responsibility for your decisions, you don’t blame others, you give compassion to yourself, and then you live your vision and values in humility.”

In my role as discussion facilitator, I added a followup question.  Leadership is about creating and tending the corporate culture.  But what IS corporate culture, and how do you have an excellent one?

Ballentine’s definition of corporate culture is a set of norms that a group lives by, that may or may not be espoused.  “A way to think about it is to ask the question: How do people behave when they think management is not looking?” he said.  “A lot of culture tends to be informally transmitted,” he added.

Ballentine said that a key to building and maintaining an effective culture relates directly to the leader being true to the core values, and taking an active role to make sure those values are transmitted through the organization.

“At Ballentine Partners,” Ballentine said, “I like to seize upon what I think of as ‘teaching moments.’  When things happen in the ordinary course of client work or whatever we might be doing at the time, where a question arises that represents an opportunity to highlight the way we live our values,” he added, “I like to stop the discussion and point out that that’s what’s going on.  And then to use that moment to reinforce the way we try to live our values.”

Herbers defined corporate culture as human behavior.  “Every day, when you walk into your company’s offices or you ask someone to join your company, you have a set of beliefs and values that you live by within that culture,” she said. 

She cited the Ten Commandments as a definition of a set of values that the ancient Jewish culture was built around, which has persisted to this day in modern religious life.  “They tell you what the beliefs and values are of that particular community,” Herbers said.  “Each of us has a certain set of behaviors that we expect within our culture and that we believe, and that are lived.  And when we live them, and we share them, and we show other people what those values are, as leaders we are living by example.

“Great corporate cultures,” added Herbers, “are the ones that live by the example of their beliefs.  And that requires you to sit down and write your own Ten Commandments.”

Those insights were offered within the first half-hour of the conference.  Let’s look at what else we learned in the keynote presentations.

Definition of leadership

Palaveev and Patel started their session by defining leadership in its simplest terms: a leader is someone who has followers.  And he noted that there is a need for leadership at every level of the organization, as projects are completed, as younger staff people are brought into the firm and taught their roles, as clients are given advice and as people take responsibility for client service in the front and back office. 

“Leadership is not a title,” Palaveev told the group.  “It is not a position on the organizational chart.  It is not something that is going to be written on your business card.”

He added that leaders tend to emerge in critical situations, where decisions need to be made, people need to be inspired, when the firm requires clarity about its purpose and direction. 

An alternative definition of leadership is making difficult decisions and taking responsibility for those decisions—something which is needed every day in a planning firm.

“Leadership is often not something you are assigned to,” Palaveev said.  “It is something that you do.”

Later, Palaveev cited an overview of over 26,000 articles on leadership (published in the International Journal of Leadership Studies; you can find it here:, which defined a leader as:

Someone who selects, equips, trains and influences followers, who have diverse gifts, abilities and skills, and focuses them to the organization’s mission and objectives, causing the followers to willingly and enthusiastically expend spiritual, emotional and physical energy in a concerted coordinated effort to achieve the organizational vision and objectives.

Out of that definition, and having worked with more than 300 advisory firms, Palaveev identified five major functions:

1) To develop others.  Later in the presentation, Palaveev quoted Bob Bunting, the former CEO of Moss Adams, saying that the single most important function of a leader is to develop other leaders. 

Leadership involves mentoring and training, and passing on skills from the founder to the staff, and from each person moving up the ladder to the people who are just coming on board.

2) To understand your team.  “A leader is someone who understands their team members and what makes them function, what their skills are, and what their strengths and weaknesses are,” Palaveev told the group. 

3)  To articulate a vision.  “Whenever we work with a firm that is struggling to find its vision, my eyes inevitably turn towards the CEO,” said Palaveev.  “The leaders of any organization have the responsibility to draw that vision out of the organization.” 

That does not mean, he cautioned us, that the CEO should declare the vision on his/her own.  “It means,” Palaveev said, “that they have the responsibility to find it, identify it, articulate it, and to get others excited about that vision.”

4) To motivate others.  The leader causes people to willingly and enthusiastically expend their energy toward a common set of goals.

5) To coordinate.  The team needs to be moving in a common direction, which has to be defined and repeatedly articulated and demonstrated.

G2-G3 leadership

Based on this multi-part definition, it’s not hard to see that there are leadership opportunities everywhere, throughout the firm and throughout the week.  A portion of the presentation was addressed directly to G2 and G3 members of planning firms—who were abundant in the Insider’s Forum audience.

“Many young people inside of organizations too often come to the conclusion that there is one leader boss,” said Palaveev.  “They say, unless I am the CEO, I cannot really be a leader.  But nothing could be further from the truth.  Leadership opportunities are abundant in each and every firm, and the young professionals need to understand that.” 

He cited examples like coordinating the materials needed for a client meeting, or a meeting where five people from different departments are trying to decide what new software to select, or training the person who will take over the job that the young professional is leaving behind.

Patel noted that younger staff members can participate in writing the company’s blog or use their technical skills to create 2-3 minute videos to introduce the advisory team and answer recent questions that came in from clients.  They can become super-users of the firm’s technology.

Meanwhile, she encouraged younger professionals to be proactive in getting the training and mentoring they desire as they move ahead.  “Our studies show that only 25% of mentor/mentee relationships are initiated by the mentors,” she said.  “That means that as young professionals, it’s important for us to seek out our mentors.  Go out and ask the people at your firm if you can learn from them.”

Finally, Patel suggested that younger advisors and ops professionals abandon a bad habit that she has seen in some company founders: an internal and external mode of behavior, where clients are treated with greater respect, consideration and courtesy than fellow staff members. 

“I would recommend that you get in the habit of providing client level value in all of your interactions,” she told the audience.  “If someone emails you asking a question about the financial analysis you prepared, be ready to answer the next two or three questions that you know are going to follow that one question.  Prepare yourself for staff meetings and help guide some of the conversation.  If there is a project you’re working on internally, if somebody says, I need this by Friday, say you’ll get it done on Friday and then do it by Tuesday.  Underpromise and overdeliver.”

Speaking now to both senior and younger staff members, Palaveev noted that there can be a strong connection between being a good leader and being a good follower.  “Every organization needs good followers,” he said.  “All of us take turns being leaders and followers.  Some of the worst people to work with,” he added, “are people who are unwilling to surrender control, but also unwilling to make decisions.  They are holding onto the status quo, and they are unwilling to live with the costs of leadership”—which is the potential to take responsibility for unsuccessful outcomes. 

“We have found,” Palaveev added, “that the best future leaders are also good followers.  The key is to recognize when we need to lead, but also recognize when we need to follow and support.”

How do you do that?  Palaveev offered a simple recommendation: look for ways to get involved.  Get in the habit of making “I” statements, like “I will.  I propose we do this.  I volunteer to do that.”  “If you are trying to identify who your future leaders are, this is your test,” Palaveev told the audience.  “Who are the people who, in your staff meeting, say: ‘Can I get involved in this?’  Look for the people who are raising their hands at the strategic planning meeting.  Those are the people who are very likely going to be your future leaders.”

Trust accounts

Are leaders born or made?  Palaveev offered a quick tour of the animal kingdom (primates, geese and ants, for the most part) and said that there is evidence that some animals (and, perhaps, some humans) tend to be a bit more adventurous, which (in animals, at least) tends to be correlated with leadership.  Then he offered some insights from modern psychology, which boiled down to the fact that different personality styles tend to work better in one office situation than another. 

For instance, a Harvard Business Review article determined that in situations where the team is engaged and motivated and functioning effectively, introverted leaders who focus on supporting the staff can be better leaders than extroverted leaders who are directive and attempt to lead from the front.  But the opposite can be true in turnaround situations, where the team is floundering, the office is dysfunctional and everybody is looking for somebody to lead them out of the chaos.

But no matter the personality type, leaders exhibit, give and inspire trust.  Palaveev echoed Herbers from the opening session when he said that every leader needs the trust of their followers.  “We need to be convinced that the leaders have the right motivation and the right value system,” he said, “so that they can be trusted to do what is best for the organization, not just for themselves.”

Palaveev has famously, in other venues, defined trust as a bank account, where each of us makes deposits and withdrawals.  “Every interaction within a team, every situation to which a leader reacts makes either a deposit or a withdrawal,” he told the audience.  “As leaders, we make deposits in the account of trust when we make the right decisions.  We make deposits when we do what is needed, and it is successful.  We make deposits when we do more than what is expected, when we act unselfishly, when we help somebody. 

“But,” he added, “we make withdrawals when we act selfishly.  When we make mistakes.  When we fail.  One of the most difficult things about leadership,” Palaveev concluded, “is that unfortunately, sometimes, despite your best intentions and plans, you just fail.”

An unsuccessful leader is somebody who makes more withdrawals than deposits, who manipulates others, acts selfishly, makes mistakes and experiences failures more often than might be expected.

At the end, Palaveev said that 70% of what you learn as a professional will come from experience, 20% from mentorship and 10% from educational programs like the Insider’s Forum and Palaveev’s G2 program.  He said that founding advisors may have a different set of experiences than the leaders they develop, and those successor leaders’ experience may be more relevant to the next phase of the firm’s evolution.  He talked about the founders stepping into a new role, from do-er to leader, and ultimately to full-time mentor and facilitator.

“If you are a leader of an organization, one of your primary jobs—maybe the most important—is to develop others who can be leaders,” Palaveev said.  “That is not just succession,” he added; “it’s really just growth.”

Leading internally

What could Herbers possibly add to that?  In her keynote, Herbers told us how she started her first business at the age of 14 and sold it at age 21 (it was a concession business at local little league sporting events), and how her grandfather was her first and most important mentor.  When he passed away, she was forced to think about how he had exhibited leadership, and how he had taught her the most important lesson of leadership: to lead internally (which was the theme of her presentation) and to trust herself.

The answer was that in their interactions, he listened more than he spoke, and that he trusted her, so that she could trust herself.  And she realized that the key to leadership—and ultimately to the success of the firm that you’re leading—is to focus on yourself as a leader. 

“Before you can become a great leader, and ultimately grow your firm exponentially,” Herbers told the group, “you have to focus first on you.  It is the rule of life: focus on yourself, and then you can transfer it onto others.”

Later she said: “If we develop trust in the beginning, then trust will become very easy to transfer.  And the secret is: all we have to do is listen.”

But HOW do you lead, beyond simply sitting with people, listening, and encouraging them to arrive at their own answers?  Herbers offered several suggestions based on her own consulting work:

1) relieve stress at your firm;

2) add balance to your culture;

3) help people make better decisions by YOU making better decisions; and

4) become more focused.

After that, you add your core values, which is your beliefs in the business.

Herbers offered a somewhat surprising take on stress; she showed a graphic which indicated that a firm tends to operate at roughly 0% efficiency when there is zero stress, and also when there is a 100% stress level.  It operates at or near 100% efficiency as you approach 50% stress.  In other words, a certain level of stress in the office means that the staff is being challenged, but too much means that the staff becomes overwhelmed and dysfunctional.

In her consulting work, Herbers would ask each staff member to assess their stress level every day.  If they reported high levels of stress, then she would facilitate meetings, asking what could be done to reduce the stress to more productive levels.  Does it require more technology and additional resources?  Should staff be given an occasional day off? 

Everybody should have time to think about their job—the proverbial time to sharpen the saw before applying it to the job—and that starts at the top.  Herbers said that the founder should take time to put his/her feet on the desk and think about the firm, and how to move it forward.  “Sometimes just sitting there and being available for questions is the most productive act of all,” Herbers told the group.  “We don’t have to be doing something all the time.  If we do that, we’re distracting ourselves from just being.”

On the flip side, of course, if you and the staff are spending too much time sitting around, you’re more likely to be procrastinating than producing.

Balance is a related concept; you want to balance the thinking and doing in the office.  “I want you to think about your organization,” said Herbers.  “Is everybody doing something all the time?  Is everybody running around servicing clients?  Is everyone making sure their hands are busy?  If that’s the case, you are way too far on the doing side, and you need to slow down.”

But if everybody is mostly socializing all day, then you have moved too far in the opposite direction.

Making better decisions is a matter of giving yourself time to think.  Turning to focus, Herbers offered a digression on decision-making, saying that too many firms try to achieve consensus among many stakeholders or partners on most of the important decisions—leading to a condition she calls “death by consensus.”

“When you don’t have one primary leader making the final decisions, or when you have multiple leaders making different decisions,” Herbers told the group, “your organization often gets stopped or stalled, which stalls all growth.  When you have consensus, that means no one is responsible,” she added.  “When you are making a decision with three or four people who are all agreeing on that decision, and the decision goes bad, who is responsible?  No one.”

Focus starts with defining what you want to accomplish.  Herbers said that many leaders define progress according to growth in revenues or profits, but she said that these are difficult metrics to use when you’re rallying the team.  Better to define progress as the growth in the number of clients you’ll serve. 

“People can enthusiastically get behind a goal of serving more people and helping them grow and prosper,” said Herbers.

Focus also means giving your attention to the present, not the far future.  She told the group she isn’t a fan of 3-year plans, or even ambitious one-year goals, which she thinks can actually limit what can be accomplished.  “You don’t know what’s going to happen in three years,” she said. 

Her recommendation is to define a very big picture goal, and then focus all your attention on the very first step.  If the goal is to get 1,000 clients (leaving the time period unspecified), then your immediate goal is to bring in 20 clients, and create an efficient process to attract them and serve them once they sign up.  Then focus on the next 20 or 30 until you’ve achieved your goal.

“Every two weeks, just for an hour, sit down and figure out what is going on in your organization within those two weeks,” Herbers recommended.  “Then make short-term goals, hit the short-term goals and watch your organization grow.  Don’t get caught up in what you think should be a big strategy, or a big goal.”  In other words, keep your focus as close to the present as possible.

Management vs. leadership

These are the most productive activities of a leader.  But how do you work on yourself, to become a better, more inspirational leader?  Herbers echoed Ballentine when she said that you start by articulating the core values of your firm.  She said that the best firms don’t just put these on a plaque sitting on the wall, but first the firm leader memorizes them, and then he or she encourages the rest of the team to memorize and internalize them.

Then, of course, you live strictly by those values, and allow the team to see that.  And Herbers recommended that whenever the firm runs into difficulty, your first priority is to refocus on your leadership skills.  “The key is: once you get good, then everything in the business automatically flows,” she said.

Finally, you give up management activities in favor of leadership activities.  “One of the biggest problems of advisory firms is too high of a management function and too low of a leadership function,” Herbers said. 

What does that mean?  “Leadership is influencing others,” Herbers told the audience.  “It is listening more than you speak, and saying: What do you think?  How do you think we should solve the problem?  What resources do you need?  How can I help?  It is questions rather than telling.”

Management, on the other hand, is being a boss, telling people what to do, saying things like: You need to do this; you need to do that.

Leadership leads to others taking the lead, Herbers told the audience, while management can have a dysfunctional impact.  “Management leads to codependence,” she said.  “Someone who is codependent cannot actually make a decision on their own.  They wait for someone to make the decision for them, which is not the dynamic you want in your organization.”

At the end, Herbers encouraged the audience to learn to trust yourself, and then use that skill to trust others, and transfer trust, and by example teach others how to trust themselves and win and transfer trust. 

“If you use the resources that you are already blessed with, internally,” she said, “you will bring so much more benefit to your business, and to the people you work with and the people you serve.”