To most advisors, expanding one’s practice from a ‘lifestyle’ practice to a larger firm that is more encompassing requires two sets of skills: financial planning skills that can build and service a growing client base, and the management skills required to lead an effective team that will make strategic long-term decisions to sustain and grow the business. This generally ends out with two types of advisors in lifestyle practices: those who deliberately pursue a lifestyle practice and enjoy operating as a sole practitioner, and those who have simply settled for one to avoid the management responsibilities involved in growing a business.
In our 72nd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how building a bigger practice doesn’t necessarily mean having to become an all-in-one manager and visionary; advisors who feel stuck in their current roles may find that by questioning some of the recurring scripts they follow (and that may actually limit their ability to realize their own potential), they can identify and seek out the right talent to help implement their vision for a larger firm!
As a starting point, advisors may wonder, “Okay, but if I don’t manage my company, who will?” To address this dilemma of finding the right help for an advisor to manage and grow their company, Gino Wickman, in his book Rocket Fuel, outlines two essential business roles: the visionary who envisions the new directions for the business to take, and the integrator who does the actual building, hiring, training, etc. Wickman points out that the visionary/integrator dynamic is quite common in many successful high-profile businesses, such as Walt Disney and Roy Disney, and Steve Jobs and Steve Wozniak.
In reality, establishing a successful visionary/integrator dynamic involves two key requirements. The first is to identify team members with unique visionary and integrator “superpowers” and to assign them to roles where their talents can be expressed. The second is the importance of establishing and fostering trust between team members. Because when a visionary introduces an integrator to the team, they have to be able to rely on the integrator not just to implement and manage the processes that support the company’s vision, but also to make the right decisions to sustain business operations. Even though this may require some initial effort to plan the role and recruit the right person, when done successfully, delegating responsibility to an integrator will eventually free up more time for firm owners to leverage their strengths and dedicate themselves to realizing their vision.
Ultimately, the key point is that for advisors who want to grow beyond a lifestyle practice, unlocking growth potential to realize something larger may be as simple as shifting one’s mindset – instead of getting stuck on the question, “How can I do this on my own?”, advisors can instead ask themselves, “Who can help me do this?” After all, advisors with a vision to grow their firm need to have the bandwidth to focus their energy on attracting clients to come to them in the first place. And with the right team in place, growth doesn’t have to come at the cost of all of an advisor’s free time; in fact, it may actually open them up more bandwidth and freedom than they’ve ever experienced before!
***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.
- Rocket Fuel: The One Essential Combination That Will Get You More of What You Want from Your Business by Gino Wickman
- Who Not How: The Formula to Achieve Bigger Goals Through Accelerating Teamwork by Dan Sullivan and Benjamin Hardy
- Kitces & Carl Ep 71: When You Want To Delegate But Don’t Want To Manage
- Buckingham Strategic Wealth Chief Research Officer Larry Swedroe
Kitces & Carl Podcast Transcript
Michael: Well, good afternoon, Carl.
Carl: Hello, Michael. How are you?
Michael: I'm doing well. How are you today?
Carl: I'm good. Super good, actually.
Michael: I see you have found Zen with the blue couch, it just seems very nicely nestled behind you now.
Carl: Floating. It's floating in the air. I've got it up on stools, just for those of you who can't see it. Michael always makes such a big deal about this couch that I finally brought it into my office and put it up on stools, because I'm at a standing desk. I had it tipped up against the wall when we started, but it fell over, so we didn't want to do that. So, the blue couch is back.
Michael: But you're trying to troll us with the blue couch now.
Carl: I'm going to hang it from the ceiling in one of these episodes.
Michael: Fantastic. Just record in front of it and not beneath it, just to be safe.
Carl: Giant talking blue couch.
Michael: Actually losing to a blue couch accident would be a little too meta for us.
Carl: That's right. Plus, my wife would be so upset that the blue couch got injured.
Michael: That's true, that's true. You'd dent it with your head. That wouldn't be good.
Carl: Exactly. All right, what are we talking about?
Leveraging The Difference Between Visionaries And Implementors To Add “Rocket Fuel” To Businesses [1:16]
Michael: So, we had this great discussion last episode around what happens when you're a lifestyle practice, but there's some stuff you don't want to do, but you don't want to be stuck with kind of the burdens of managing staff and managing people. And sort of talked about, look, you can delegate, you can tuck in, there's other ways to do this. There's also just, find the person who really wants to be your alter ego complementary you. And, "I'm going to be tied to an office or tied to a person," the rest - that can sometimes just be a limiting belief in our head, it doesn't always actually have to be that way as a constraint.
But I realize there's kind of a different version of this challenge that I've seen crop up for a number of advisors over the years. And it resonates for me because I went through a version of this in my own journey. Which is I spent the first almost 10 years of my career in a position where I had a lot of management responsibility, to manage, teach, and train and develop other people. And I figured out I'm not the best at that. I'm not even particularly all that good at it. Give me a large audience to teach and train, fine. Give me an individual person for whom I'm supposed to do regular quarterly performance reviews, and this is not my happy space and my natural place of operating.
And so that led me down a road for many years of saying, "I really want to run something that looks more like a lifestyle practice. If I grow it, there's more people. And then I have to manage them. And I don't really like or want to manage a lot of people. So, I'm just not going to grow that big, and then I don't have to deal with that." And there was a breakthrough moment for me several years ago. Which came from a book, as many of my moments do, because I read a lot of books, so I draw a lot of inspiration from books. And it was a book called Rocket Fuel by Gino Wickman.
Michael: And the theme of Rocket Fuel is that when you look at a lot of the most successful businesses out there that were driven by really high-profile visionaries, like Walt Disney, Bill Gates, Steve Jobs, there's sort of this visionary person that gets put up on the pedestal. And the whole thesis and point of Rocket Fuel is that if you actually drill down, what you find out is that none of those companies actually became big just because of their visionaries. And not just because they had teams they built and did great stuff, which they did. But that all of those were actually duos. Walt Disney had his brother Roy, Roy was the businessman. Walt, I think, almost bankrupted Disney three different times. He was a horrible, horrible manager of the business. Roy kept the wheels on the bus and got the thing running. Steve Jobs had Wozniak, Bills Gates had Ballmer.
That a lot of the time we just happen to see the visionary folks, because often they're sort of the ones at the top or out front, but that a lot of great businesses get built because they're actually pairs - there's duos. There's someone that's great in that visionary role, and then there's someone who's great at taking all the crazy stuff in the visionary's head and actually making it into systems and process and people and structure and all the stuff it takes to actually do and deliver that. And they're good at that because the visionary is just good at envisioning things - they may not actually be all that great at translating it into the rest, or they don't like doing all the rest because they just like being "visiony" people.
And so as the book tells it, rocket fuel literally blasts things into space. Explosive rocket fuel is built from two different chemicals that individually are relatively inert. And when you mix them together, it makes very large explosions. So, when you get the two together, the explosion is wonderful. That's the Rocket Fuel analogy.
But it kind of set this light bulb moment off for me that I had spent years and years saying, "I don't want to make this thing bigger," because deep down I just didn't want to have to manage people myself and deal with all the stuff that goes with that. And very much the answer and the point of the book is you don't have to do that. As we were sort of saying for last episode, these are choices that we make to do it that way, but that's not the only way to do it. And the whole framework that Rocket Fuel gives is for every visionary, there's - they call them “integrators,” who like taking all that stuff and putting it into practice.
And even as I thought about a lot of the very successful advisory firms that I know and just advisors that have built much larger businesses, a lot of them either it was a founder and a right-hand person who went along with them the whole journey. And the truth is the right-hand person was the manage people, get it built, create the systems and process because the visiony person didn't like doing that. Or they were built with partnerships and there's the public-facing partner and the not-so-public-facing partner. Because the not-so-public-facing partner is the integrator-type who just likes building and putting all that stuff together and doesn't even want to be out there doing all the rest of the stuff. They just like building and creating teams and cultures and systems and process and all the stuff that it takes to make the business work and execute.
And so I thought it would be an interesting discussion to take kind of the next step, right? There's the advisor who's afraid to hire because they want to run a lifestyle practice and doesn't necessarily want to have to manage people. And then there's the advisor who chooses a lifestyle practice solely because they're afraid to have to manage people. And it's not actually because they want to build a lifestyle practice. They might have ideas and dreams of doing something bigger that impacts more, but they've shoehorned themselves around, "Well, I'm not good at managing people; I don't want to manage people, so I can't do this."
So, I'm wondering. Does that resonate for you, is that something you've seen in conversation with the advisors, as well?
How Business Owners Who “Don’t Enjoy Managing” Can Still Grow Their Team [7:48]
Carl: Yeah. Well, I've seen it personally, right? And I think one thing that I think you didn't mention explicitly but I think is important to all these conversations we've had about lifestyle practices, there is a question that should be asked, "Is it a false argument anyway?" Deciding to grow in terms of having more freedom, more income - that's the goal. Which, I'm fine with that goal, by the way. More freedom, more income, more impact. That does not mean you have to, right? It doesn't mean you have to get more staff, bigger, more headaches, more management. It's not necessarily... those things aren't necessarily correlated. They are historically, we've always thought this way.
Which is why I think Rocket Fuel was such a breakthrough for me, too. I remember reading about the early stuff, Traction and the Entrepreneurial Operating System, and just being like, "Whoa, there are people, like an integrator?" I didn't know that existed because I had never sort of understood that. I just knew that I couldn't seem to run a business, right? I couldn't seem to do all the things. It was like I would try to grit my teeth and make myself do those things - the things that you're supposed to do, the thingy-things when you run a business, the business things. Right?
Carl: I would try to grit my teeth and make myself do it and I couldn't. All I wanted to do was create stuff, that's it, at the expense of the business sometimes.
So, I love that idea that... And so when I discovered that... Because now we've got a team here that operates exactly that way, and it's so powerful. It reminds me a little bit, too, of this idea that you can outsource being in charge. I love that. And I first learned that from something that Larry Swedroe said. So, Larry - what would Larry's title be now? I just think of him as king, but what would his title be now?
Michael: Oh, gosh, I'm not even sure what his formal title is. ‘Chief Guru of All Investment Things at Buckingham.’
Carl: Yeah, yeah, yeah. Exactly. And I know he's been around at Buckingham forever. And I remember he said to me once... And Larry, I've probably got three or four things that Larry has said to me that have just clicked and really stuck around for a long time. But one of the things he said was, when he first got... And I may be getting this wrong. But my recollection is that when he first joined Buckingham in the early days, he told them, "Put me in charge of nothing." Right? And I know he's evolved a little bit, but he largely was saying, "I'm not good at managing something." And I was like, "Oh, that's fascinating. You can do that?"
And then I realized I could actually... Because I found myself saying, "I just want someone to tell me what to do." And I realized, "I can outsource that." I could outsource being in charge. I've got this unique skill. The business... And that skill may be, for an advisor, let's say that you're one of the lucky ones and your unique skill - either you're lucky or you've worked really hard to develop it - is you just love being in front of people and you love being out, the business development work and first and second and third meetings. That early stuff, you love that. Well, it turns out that's a really valuable and really unique and relatively rare thing to love. Most people find that hard. Well, you could say, "I love doing that, somebody else is in charge of everything else." And now finding that person, that's hard, but Traction and Rocket Fuel have made it a little easier.
So, I love the idea that to make something bigger, you don't have to be a great manager. You can find someone. I think there's a corollary here, too, right, Michael? You could love the spreadsheet part of this business. You don't have to make yourself love the crying-on-the-couch part or the managing-of-the-firm part. Whatever it is that you're really good at, if you can find a way...
Michael: Yeah, I would much rather have the spreadsheet part than the crying on the couch part, for the record.
Carl: Well, that comes up all the time and we're like, "I don't want to do these first meetings," the way you talk about doing them where you have to talk about values and goals. You know what? It turns out you don't have to and you could find somebody else who really loves that part. Or you could decide to build a business around not doing that part, right?
So, but the idea that you don't have to manage, you don't have to be good at managing, you just have to... Oh, Dan Sullivan. Last thing I'll say on this. Dan Sullivan has a great mental model for this. Any time he found himself...any time he was running up against an obstacle in any way - a ceiling - he learned to stop asking "how" and start asking "who." So, he says it, "Who, not how."
Carl: That's so powerful. If you stop asking "how" and you start saying, "Wait, who else has figured this out before? Who could know how to do this? Who would be good at this?" And one of those things you can ask that about is, “Who would be good at being in charge? Who would be good at making sure the train is running on time?”
Carl: Right? I love that.
The Importance Of Trust Between Visionary And Implementor [13:09]
Michael: Yeah. Since getting clear on that for myself, frankly I think it's part of what transformed the growth just even for our platform, just for Kitces.com. I spent almost 10 years where it was myself and one or two others at the most. I never wanted to grow beyond that because then I would have to manage them, and that didn't sound appealing. And so getting clear on, "Well, no. What that means is just if I'm going to grow, I need a managing director person, a COO style person, who can drive all of that." So, once I got clear on that, I found that person.
And so we're now at 19 team members, we'll probably be at 22 by the end of the year, for Kitces.com. And I have two direct reports. My executive assistant, because really it wouldn't be appropriate to have her report anywhere else. And my managing director.
Michael: And all of the other directors and departments leads report to the managing director, they don't report to me. Now, I still have conversations with them; I'm still involved because I set a lot of the vision, the direction of where we're going. But I created an organizational structure, and this is basically the Rocket Fuel-org structure for people that like to be in the "visiony" space. And, I guess, apropos to their title, got really clear on that, 7X'ed the business in three years.
Carl: Why did it take you so long to get clear about that?
Michael: I was apparently waiting for them to write the book.
Carl: Right. Why is it so hard for us to get our heads around that idea?
Michael: Because I think it is a mindset shift, right? Just if we live our lives a certain way, we have certain experiences. Our brains are very much wired to learn from those experiences, right? Just that's part of our survival mechanism. "I touched the stove once. It was really hot and it burned me, so I don't touch stoves anymore." And so when we have experiences, I think particularly when we have painful experiences, it kind of sears itself into our memory, "Okay, lesson learned, don't do that again."
And on the one hand that's fine, "Okay, don't touch stoves anymore." But sometimes we overreact to that and take it to extreme, like, "Oh, that doesn't mean I need to never own a stove, that just means I need to buy oven mitts so that I don't touch the stove anymore." Right? And we can get caught in those traps between "I'm never going to cook again because I burned myself" versus "No, I just need to buy oven mitts." Or, "I didn't really enjoy managing people, therefore I can't have a larger business." No, no. It just means you need to hire someone whose job is to manage people and change your structure. It's very much that realm of when you change your mindset, all of a sudden different paths and opportunities open up.
And really would recommend, just for anybody who's, I don't know, thinking about this or processing this or wants to explore it. Again, my world I do well in a book realm, so the two for me on this really are, so, Rocket Fuel by Gino Wickman. We'll put this in the show notes if you want to go click through and find it. But if you're trying to scribble it down, Rocket Fuel by Gino Wickman and Who Not How, which Dan Sullivan actually did as a book with a coauthor named Ben Hardy. So, Who Not How. That's literally the name of the book, Who Not How. Read Who Not How and read Rocket Fuel and just create a different mental model around yourself that says growing more team members doesn't necessarily mean you personally have to manage more people. You're going to have to have at least one with whoever you're partnering or working with, but you don't really need much more than that if that's the vision of how you want to grow.
Now, there are some trade-offs that go with that. Like if you're going to have someone to run that part of the business and make those decisions, you have to actually let them do it. Which means you have to find someone you trust enough to do that, which means you've got to start looking out there and finding the person that you can trust. And that's a journey unto itself and perhaps something we can talk about in a future episode. But the change - yeah, I guess the purest sense - the change and what took so long and what created so much of the transformation was, until I understood that was the person I needed to look for, I wasn't looking. And as it turned out, as soon as I got clear on this could happen a different way and I started looking, it was actually kind of disturbing how quickly I found someone and figured out how to make that happen.
It's the same phenomenon of you buy a new car, and then everybody seems to drive the car that you just got that you totally never noticed before. But now that you're driving one, you notice everybody else who has it, as well. Just it's a particular part of our brain that attenuates our focus where once you're thinking about and looking for something, you notice and focus in on it more readily. When you get clear on, "Okay, this could function differently and I could have a different team structure, I just need a person that does blank,” and you get really clear on what that person does, it's amazing how quickly your brain can start honing in on trying to find that. I think particularly for us advisors because we tend to be pretty good at setting goals and going after them. So, when you get clear on the goal, you may start going after it pretty quickly once you're clear.
Finding “Builders” To Improve Personal Lifestyle [19:02]
Carl: Yeah. That's really fascinating to me. I have found myself lately - especially the last 18 months as the business has gotten more formed, if you will, around how I wanted to build it and things have gotten clearer and I found somebody who I would think of as the who and also as an integrator - I realize I've started referring to it as almost like a spiritual practice, right? Because you learn things about yourself that, if you're paying attention, and you realize it's your fault. Or the reason this is not working is because you are doing something that's not aligned with what you're at least expressing as your goals.
Now, it may be that you need to change the goal. Maybe you don't want that thing that you thought, that's totally fine. But if you do want that thing... Because I used to say all the time to my wife, Cori, I used to say, "I could pull the plug on all this and just do 10 speaking engagements a year." And I used to call it the retreat to the... What did I used to call it? The tree house or the yurt. "I'm just going to go here by myself, I'll have one... Actually, I won't even have an executive assistant. I will handle all my speaking, I'll just speak. I'll do it 10 times a year. That's fine." And I would go to that little retreat, the little tree house by myself for like an hour and be like, "Yeah, but I have a different goal. I really want this other thing." But I kept bumping up against...bumping my head against the wall.
And so I started realizing, "Wait. Finding somebody, I tried that." And I was like, "Oh, I tried that, it didn't work." That was a retreat to the tree house, right? And then I came back and I was like, "Well, okay. Maybe you need to try again." Right? "What did you do wrong in that...what did I do wrong?" Maybe it was 95% their fault. It was never, but maybe it was. The only thing I could focus on was the 5% that was mine. But it was normally the inverse, just to be clear.
So, I found that really helpful, to start thinking like that. I'll give you an example. A business coach I have told me one day, because I was having this problem, my problem was I have too many ideas. So, the team would start working on an idea on Friday, and on Monday I would call and change the idea. And they're like, "You can never get anything done." And I was like, "I don't understand." And I'd even say, "This is just a brainstorm." Right? And I realized, and this coach said to me, "Carl, do you realize there are people who don't like to brainstorm? They just want to build." And I was literally like, "What?" I didn't know that was possible. And he went a little further and he said, "Do you realize that sometimes you walk into a meeting with this group of people, your team, and if you just walk in and say 'green' and you leave, do you realize there's a whole thing that goes on? 'What did he mean by that? Does he want to change the green? Should we make something else green?' There's a whole thing."
And so I love this idea of, look, if your goal is to grow freedom, income, impact, revenue, whatever the “grow” part is, realize you don't...that doesn't mean you have to... Sometimes we're like... It doesn't mean you have to grind, and it has to be 60 hours a week, and you have to hate it. That you can employ some of these things we've talked about here, especially finding a person who could be the opposite side of the rocket fuel as you.
Carl: And then when that doesn't work - because it won't always - when you hit bumps in the road, be aware that you're going to hit them. And when you hit them, own them and say, "Okay, what do I need to do differently to make this work?" And then crazy things happen. I've had the same experience. Anyway. And it's all because I think we finally realize there's rocket fuel that takes two things to happen. My business is way better now, my life is way better now, and we're growing. That seems like that's illegal.
The Importance Of Finding The Right Person To Build The Right Firm [23:08]
Michael: Yeah, I think to me, just the essence of it, because we had sort of kicked this off in the vein of lifestyle practice. As we talked about last episode, just for those who really want a lifestyle practice, you can do that, there are people who have created amazing lifestyle practices. Yes, you can still do that and find a way to delegate some of the things you don't like, right? There is outsourcing, tuck-ins, part-time staff, full-time staff. Just get clear on what you really need in the firm and don't settle for anything less than finding that person or that fit or that structure.
But I find there's sort of, this is overgeneralizing a little, but there's kind of two types of advisors. There are those that want a lifestyle practice and there are those that have kind of settled or sufficed for one. And I don't mean that to be pejorative to lifestyle practices, but just that I've seen advisors, and I lived a version of this, where there really was kind of a dream and an idea in my head that was bigger than that. I had accepted lifestyle practice as a trade-off and a proxy for I don't want to manage people, I don't want to deal with the complexity, the systems, the things, that stuff that's got to get created in order to do that. And that was, as I kind of learned in reading books like Rocket Fuel and Who Not How, that's not really true, that was just a script in my head.
Michael: And when you get a different perspective, when you get a different script, and then you go look and try to figure out how to solve for that script, you go down a very different journey and, frankly, some cool stuff tends to happen. Because just in general I find, as advisors, when we get clear on our goals, we tend to be pretty good at going after them. Just we're kind of goal-setting machines as advisors - that's why we like doing goals-based planning with clients. We like finding goals and going after them, and helping other people find their goals and go after them.
So, you get more clarity on your goal. Again, we may do a whole other episode on how do you find these people and figure some of that out, but the truth is you're probably pretty good at getting most of the way there all by yourself once you just acknowledge and accept that's the path forward and what you're actually looking for and get clear on what you're looking for.
Carl: Yeah, I love that. I love the idea that it's just question the scripts in your head. Right? That's super cool. Thanks, Michael, that was awesome.
Michael: Likewise. Thank you, Carl.