A Foundational Principle to Leading an Advisory Firm

Transcript: Many firms want to be advisory firms and so our growth guide, our advisory growth guide, talks about really what are some foundational principles to leading an advisory firm. And let me just mention one that’s super tricky and that you don’t realize until you get into it. But if you’re selling tax returns and bookkeeping and financial statements, those are really tangible things you can see. But when you start moving to the world of advisory, it’s shocking at first to realize that you have nothing to sell. You’re not showing anybody anything. Now, that may not always be true with advisory because there might be software and metrics and reporting and dashboards and consulting that you do that may have spreadsheets and things like that. But a lot of what you sell in advisory is talking and so you have to convince a client upfront to buy your experience and your brain and time with you. We like to try to sell clarity. We like to tell our client, “You’re gonna be more clear on your purpose forward once you’ve worked with us,” and clients don’t realize it, but clarity has huge value.

A lot of entrepreneurs are very confused. Running a business is complex. So it leads to chaos often and so it leads to confusion and confusion really. People really struggle with confusion, just walking through and wading through the murkiness of confusion. So what advisors can do is sell a lot of clarity. They can bring clarity. So when you’re moving into an advisory type firm, you find out you’re not really selling tangible things. Clients have asked us, “What do I get for this consulting around this valuation?” I’ve told them, “You get nothing. You don’t get anything except the clarity of knowing that the process of what we walk you through to realize that you’re gonna gain clarity. You’re gonna have something that will change how you think about the future.” So when you’re confused, things are murky. You struggle to think clearly. You struggle to make decisions to grow. So when you bring clarity to a client, it really can change their life.

But back to the fact that you sell an intangible thing or talking or experience as the value of advisory. One way we try to get a client to realize what they’ve purchased is a phrase called “we force the realization of value.” We talked about this at Deeper Weekend one year about forcing the realization of value when you’re working with a client. So we want to stop midway through a process and go, “What things have you learned that you didn’t know before we started working together?” or when you’re done with some kind of consulting engagement, you want to ask, “What did you learn or aren’t we glad we found this thing out?” “We’re glad we got into a consulting engagement with you to find this thing out that you needed to know.” So we’re pressing the client to say that this thing is valuable, right? Because if there’s an intangible and it is valuable, we force them with strategic questions to acknowledge that this work that we’re doing is valuable. So we do have to force the realization of value because value may be there.

But a client may not realize it or see it or they’ll bypass it or go run by it or it can be really hard to stop and look at and grasp hold of something that’s intangible. So you as the advisory leader can stop and go, “Look at this. Look at this thing you got. Isn’t this valuable?” You can ask them questions and they have to reiterate, “Yes, this is valuable.” And that seeps down in their mind the fact that, “Yes, I perceive value for the thing that I’ve paid this advisory firm for.” So that’s important and that’s just a skill as an advisor to manage an advisory firm, to stop, slow down, let the client assess that value, acknowledge that value, verbalize that value, stop midway through. Sometimes we’ll do after action reviews or if we do a 12 month contract with a big consulting client, we may go in three or four months and stop and go, “All right. What have we done, what have you learned? Where are we?” This forces the fact that value is constantly being created.

But the advisor’s the one who has to stop and make sure that realization is forced upon the client. So that’s not only trying to squeeze the value out of the client. It’s good for the client too. They embrace that and then they embrace you and trust you and then you can continue the work of transformation if you’ll just stop and help them realize that value. So that’s some insights into running an advisory firm. I hope that helps as you run your firm or as you transition into advisory. We’ll see you.

Jason is the Founder of Thriveal and the Chief Innovative Officer of his CPA firm, Blumer & Associates. He is the co-host of the Thrivecast and The Businessology Show and speaks and writes frequently for CPAs and creatives, his firm’s chosen niche. Jason loves to watch documentaries on just about anything. He lives in Greenville, SC with his wife and their three children.

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