“Culture will eat strategy for lunch.”

–Peter Drucker

Leaders focused on asset growth understand that creating a special workplace environment helps with recruitment, retention, and client experience. Any organization not focused on its culture will ultimately underperform. We all know that in the wealth management space human capital is the most valuable capital. A great organizational culture must serve all of the stakeholders: clients, shareholders, partners, and employees, as well as the larger communities around them. So, what makes one culture better than another? It's not membership at a gym, free food, or flexible hours. While those perks are all very nice, what I have experienced over the past 34 years and especially over the past 5 years since I've been traveling throughout North America as a consultant and speaker is that people want to be valued, appreciated, and respected.  They want to be recognized for their contribution and not just quietly given a pay raise.

Throughout our industry's history, we have seen what happens when an organization's culture is primarily focused on only one part of the three‐legged stool: shareholders, clients, or employees. We have seen cultures that have a short‐term focus of hitting sales targets miss the opportunity to do the right thing for the client. Yes, everyone likes to increase margins and increase revenue; however, if the three‐legged stool is not well balanced, it will fall over eventually. We see that on the front page of the Wall Street Journal virtually every year. The true culture revealed in front of the world. Are you proud of your culture? If not, what will you do about it?

Great cultures have a clear vision and purpose. For example, when I hear advisors say, “We want to make a meaningful difference in people's lives,” I know those may be hollow words, but it's the first step. When I hear a market leader say, “We want to create the best work environment for our people and the best environment to serve our clients,” I know at the very least they are thinking about the people and what matters to them. These leaders may not get everything right, but at least they are putting their energy behind creating a place where people can feel valued and have the opportunity to grow. But ultimately actions speak the loudest. It's nice to have printed mission statements about how we take care of our people, clients, and community, but it's all about our deeds. Ultimately people vote with their feet. What do I mean by that? Clients vote with their feet if they give you assets. Advisors vote with their feet if they join your team. And of course the opposite is true, too. If clients are unhappy, they vote with their feet and walk themselves and their assets to another advisor.

Over the past five years I have worked with over 100 wealth management firms representing some of the most prestigious and most successful in the world. They all have three things in common: a desire to improve the client experience, a desire to increase asset growth organically, and a desire to attract top talent. The leaders at these firms understand that if they exceed client expectations, they will likely gain more wallet share and more introductions. A great client experience creates loyal and happy clients, which is very good for the bottom line. But here is the secret (if it can even be called a secret): a great client experience starts with a great organizational culture. You cannot have a great client experience and a poor workplace culture. If people are not happy working in the environment you have created, you will not be able to deliver a consistently positive client experience. Your job as the leader is to put a smile (metaphorically speaking) on the faces of the people on your team, advisors, and support staff, and so on. You must do this before you can put a smile on the client's face. Said differently, happy people inside a firm will make happy clients. It's that simple. Therefore, the formula for a great client experience is having the right people in the right roles with the right culture.

Of course I would not be talking about the importance of culture if it were not an issue. Based on my experiences derived from thousands of meetings with advisors, over 72 percent of advisors are not satisfied with where they work. According to Forbes, unhappy employees outnumber happy ones by two to one worldwide. Therefore, it should come as no surprise that thousands of advisors change firms each year. Those who move to the independent model want more control over their business; the decision to move to another firm is not always driven by compensation. These advisors want more control, the ability to create their own brand, the possibility of keeping more of what they earn, and the potential opportunity to one day sell their business.

In my time as a consultant and speaker, I have presented to thousands of advisors across North America. It is crystal clear to me the minute I walk into an office what kind of culture is present. Leaders who believe in the importance of a great culture work very hard to create a special workplace where people are happy and enjoy their work. You can feel a sense of community. It doesn't just happen; it requires a conscious decision to create the right vision and the right environment. You can recognize these types of environments immediately because when a client or guest walks into the office, they are celebrated, not merely tolerated. The first person who sees the client offers a big smile and with little effort addresses the client by name. When clients hear their name, it's music to their ears. That's what I call making an emotional deposit. The client can't help but think that these people care about them and that they are organized and focused. They are professionals.

Getting the culture right also means being relentless about hiring the right people who will fit into the culture you're building. Once you establish a great culture, the right people will see it as a major benefit. Of course, the wrong people care less about that culture, and worse, may undermine the good things going on. The wrong people are toxic to a company culture. I call these people victims; they enjoy complaining, are never satisfied, and are frequently negative. These are the people who will keep your firm from becoming a great place. As a leader, you might need to ask yourself if what you are creating, promoting, and allowing is negative for the culture. You need to take responsibility.

When I was a manager, I always wanted people to feel they had two families, one at home and one at the office. I had holiday parties throughout the year, not just in December. I made it my practice to include children for Halloween and Thanksgiving celebrations, encouraged community participation, and celebrated both people's personal and professional milestones. A few times a year we'd join together to support a major fundraising effort. The best managers are always seeking ways to make these types of emotional deposits. It can be as simple as sending a note to someone to recognize his performance or doing a favor for your colleague. It's not just about silently respecting people, it's about showing people you respect them. There isn't some magical secret to creating an outstanding culture; it's really about doing the simple things. Before anyone starts to focus on creating a better business strategy, it's key to get these fundamentals right.

Ask yourself:

• What does a great business culture mean to me?
• What do employees say about our office/firm to their friends and clients?
• What do clients say about my office/firm? (If you're not sure, ask them.)
• Are emails returned on a timely basis?
• Are leaders building confidence or tearing it down?
• Is transparency valued?
• Is speed valued—a sense of urgency for the client and your team?
• Are people collaborating or just talking about it?
• Are people committed or compliant?
• Does the culture inspire creativity?

I have visited more than 975 offices in the wealth management industry throughout the United States and 14 other countries. The culture of each office is apparent to me—and any other visitor—within 10 minutes of arriving. To me, a great business culture is characterized by complete transparency and trust. People in a healthy firm culture are engaged, excited, and enthusiastic—whether the client is in the room or not. A great culture is an environment in which people can speak their minds, where they can express their opinions, and where they can challenge a colleague in a professional and respectful way. I can't think of anyone who doesn't value transparency and collaboration. It's not just what you say but how you say it. Constructive conflict is not necessarily a bad thing—it's often how you come up with the best solution. This needs to start at the top of the house. As I said before, lead by example.

Unfortunately, most business cultures are still built around the expectation that everyone needs to play nice in the sandbox or suffer the consequences for professionally challenging a colleague or a superior. Businessman Charles Koch describes the fallout of complacency in the workplace in his book, Good Profit:

There's a tendency for many in successful companies to rest on their laurels and become complacent, self‐protective, and less innovative. In such bureaucratic cultures, employees can survive only by running with the herd. Decline sets in.

Such cultures stifle talent and exhaust leaders. Good leaders want to make a difference, be part of a winning team, express their creativity, and excel professionally, but if the culture within which they find themselves is bureaucratic and stagnant, they might find their growth and leadership stunted. If, as a leader, you find yourself in such a culture, you have two options: change it or leave it.

Change It or Leave It

In my work, I often hear the excuse, “We have a company‐wide corporate culture and I really don't have any control over what goes on locally.” In many cases, ground‐level leaders feel it is impossible to create a culture in the local market because they believe everyone has to march to the orders created in the home office.

I couldn't disagree more. When people work for you, regardless of whether you are a team leader or a manager at an Independent Broker Dealer (IBD), RIA, bank trust, or wirehouse, you set the tone. Your behavior and the decisions you make every day create the local culture. As a local leader, you can and should take responsibility for creating not only an individual team culture but also a local office culture.

Ask yourself:

• Do people trust each other in my workplace? (If they don't, how often do you talk about what values you stand for?)
• How can I change the culture to better serve all the people in the firm? (You can only do this if you have a sense of humility and you care—really care—about the people.)

Leaving a toxic culture you cannot change is not a passive act. In many ways, a key leader's departure is a way of bringing that culture to a crisis, which may lead the firm toward positive change down the line. When top talent exits, the organization suffers and talent will continue to exit until a toxic firm finally acknowledges it's in a crisis.

Transparency Transforms Cultures

Not so long ago, during a consulting engagement, I had the privilege of experiencing complete transparency within an organization. The company's CEO, Bob, was as candid with me behind closed doors as he was when we started to engage in open discussions with his partners and senior team. He had no hidden agendas, his message was consistent, and his ego was in check.

The best way a leader can demonstrate transparency is to show vulnerability and to not camouflage weaknesses (which may well be obvious to others anyway!). Bob's self‐awareness and humility made it easy for the group to openly discuss issues within the organization. We were able to identify some of the firm's blind spots as well as some of the ugly spots. No organization or group of individuals can move forward until all issues are identified. The group must be able to honestly assess their own weaknesses. Such effective collaboration emerges within business cultures that sincerely encourage transparency and promote intellectual democracy—which ultimately creates a culture in which the best ideas win.

Ask your people:

• Can you describe our culture?
• Is our culture consistent with your values?
• Is our culture consistent with your actions?
• What cultures do you see in other businesses that we can learn from?
• How do people inside our organization treat one another?
• How do you show respect on a regular basis?
• Do you have an open‐door policy?
• Does everyone in the organization describe the culture the same way you do?

As our business continues to become increasingly commoditized, clients will have more and more options. Therefore, creating a successful culture will be paramount to attracting and retaining clients. Clients can feel when a company has a special culture and this intangible quality makes all the difference. So, what exactly creates a positive company culture? The top‐10 qualities that I most commonly see in businesses with a strong company culture are:

1. Everyone in the organization feels valued, recognized, and respected. Everyone feels relevant and that they are making a contribution to the big picture. This means everyone including the intern you just hired.
2. The organization celebrates diversity of people and ideas. It values overall health.
3. The organization values speed and operates with a sense of urgency. Two days to return emails or phone calls is not acceptable.
4. The organization's focus is on solutions versus products.
5. The organization has a clear vision and purpose. Leaders and employees can answer the following questions: Why do we exist? Where are we going, how are we getting there, and how are we different?
6. People are recognized for taking risks and trying new things. Failing is okay.
7. The organization promotes complete transparency. All employees understand why a decision is made and why a certain strategy will be implemented.
8. Celebrating milestones and making time for fun is a priority.
9. The organization promotes volunteerism and works in communities to make a difference to those who are less fortunate.
10. The organization is a meritocracy, meaning it is performance driven and client centric.

Finally, let's not make this discussion of culture more complicated than it needs to be. Do you agree that creating a great client experience is good for business and the only way to create a sustainable growth model? If so, start by spending a lot more energy on hiring the right people and making sure the people on your team are in the right roles, because over time skills may become worthless or your team may become complacent. We are in the people business; therefore, hire nice people who actually like being around people, who can do the job, and who are motivated to grow personally and professionally. Think about these key words on a daily basis: respect, transparency, empowerment, compassion, vision, recognition, and results. But more importantly, make these key tenets the foundation of your business.