Independent advisory firms can recruit better employees by using our Diamond Teams® Organizational Model
Six years ago, I created “Diamond Teams,” an organizational design to solve human-capital training and career-track issues in the advisory industry. (I wrote about this in recent ThinkAdvisor.com blog and received plenty of feedback.)
I am repeatedly surprised by the unexpected benefits of the Diamond Teams structure for independent advisory firms. After my blog appeared online, a member of one of the larger firms I’ve worked with to implement Diamond Teams pointed out that I had failed to talk about the top benefit of Diamond Teams: “The true benefit is the steady 19% per year growth rate ever since we implemented it,” the person said.
Independent advisory firm revenues almost never grow at a steady rate. When advisory firms grow, they invariably run into predicable “growth barriers,” points at which their volume of new clients and assets out-grow their capacity.
At these points, firms need to increase capacity — typically by adding staff and upgrading technology — which requires a substantial reinvestment of cashflow. Consequently, growth rates slow for a time during these building stages.