We may associate the concept of culture with large organizations. But having spent thousands of hours in advisor offices, I’ve been fortunate to see how culture affects businesses of all sizes, from startup advisors, to large corporations—and there are things that both big and small companies can learn from one another. 

Identifying culture in a business

In an HBR article, titled Six Components of a Great Corporate Culture, John Coleman isolates the following as drivers of culture: vision, values, practices, people, narrative, and place. These are all strong components, but three, in particular, strike me as shared elements in corporate culture and small business advisory firms: vision, people, and values.

This topic is especially relevant to advisors right now for two reasons:

1. Culture affects the bottom line. 

James L. Heskett, a professor at Harvard Business School, maintains that culture “can account for 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.” What does this mean for advisors? How you convey your culture and your firm’s identify to the public matters. 

Michael Kitces coined the term, “A crisis of differentiation,” which speaks to how firms with a deliberate and differentiated culture are more likely to stand out from other firms. Additionally, if your people believe in your mission, your clients and prospects will feel it and then will inevitably believe it too. This is where culture can really drive growth. When your clients feel connected to the work you do and they believe in it, they will refer you to their friends. 

2. Culture influences recruitment and retention. 

As John Anderson, SEI’s Head of Advisor Services, recently talked about in his blog post, we’re in the midst of a societal phenomenon called “the Great Resignation” or the “Big Quit.” The vast majority of advisory firms have 1-5 employees and, by design, are lean operations. Losing just one person could have a significant effect on everyone, particularly on morale and engagement. 

What’s more, it’s a job seeker’s market right now and advisor owners need to be deliberate about their people strategy and their culture. It’s also important to identify those employees who are most critical to the success, including employees who your clients depend on the most. Losing a linchpin employee will cause a ripple effect that you will certainly feel. 

The inextricable link between vision, people, and values 

These three components are intertwined. Clear vision aligns the people who support your business with your mission. It also guides your business’ values, and the rules that govern how you engage with your clients and employees. This creates something known as a virtuous cycle, in which your business becomes more attractive to prospective clients. It’s something that all businesses should aspire to achieve. 

In other words, people are everything. They carry your culture, represent your brand, and bring value to your entire enterprise. There’s no denying that technology enables efficiencies and connections, but I believe advisors are best served when they have a concrete strategy for engaging their people and building culture. 

And even if you’re a solo advisor, culture is still important. Think for a moment, “If I am the identity of my business, am I nurturing myself so I can convey the brand that attracts clients and prospects?”  

Here is one easy step to take to tie it all together:

Have a cup of coffee with someone. Not every interaction needs to be an outcome-oriented business meeting. I recently had a virtual coffee with John Anderson and we both commented that it felt healthy to connect, and that the hurried small talk at the beginning of a meeting doesn’t quite scratch the same itch. The time we spent together was humanizing. I can say that afterwards, I felt more connected with John (a friend and colleague, in that order). These types of interactions are the glue for any firm.

Culture lives through your people

It's easy for leaders to lose touch with the work being done on a daily basis. As business owners, advisors would find it time well spent to stay close to their people and take in interest in their work. Frequent, informal interactions with your people not only help you stay connected with the evolving needs of the business, but they humanize you as the boss and increase the likelihood your people will give honest feedback—and not just the feedback that the boss wants to hear. 

Ultimately, your people drive the identity of your firm. The technology, tools, and products you depend on help you spend time building and reinforcing that culture. In the face of the crisis of differentiation for advisors, having a strategy around culture matters. 

In the end, in a world full of cheerios, be a fruit loop. Your clients, your staff, and you will be better for it. 


Legal Note

Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company. The content is for educational purposes only and is not meant to provide investment advice or as a guarantee of any specific outcome. While SEI welcomes comments, SEI is not responsible for, and does not endorse, the opinions, advice, or recommendations posted by third parties. The opinions expressed in comments are the view(s) of the commenter(s), and do not represent the views of SEI or its affiliates. SEI reserves the right to remove any content posted by users of this site in its sole discretion.

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