Do You Suffer from a Leadership Credibility Gap?

By Bill Kica on March 7, 2022

“Well done is better than well said” – Benjamin Franklin

Talk is cheap. Put up or shut up. Just do it. . .

We have all heard these and similar imperatives urging us to focus on the real outcomes of our intentions rather than rhetoric. Regardless of how eloquently we as leaders believe we frame the mission, vision, or tasks at hand to our troops, it has long been known that our leadership behaviors speak the loudest. Without prioritizing actions over words, perhaps our people may not actually be hearing our spoken words or, worse yet, discounting them.

Since our earliest school days, we all have heard the axiom “actions speak louder than words.” This leadership dichotomy of our actions falling short of our words is what I refer to as the “Leadership Credibility Gap.”

One of the best ways I’ve heard a senior financial advisor phrase this dilemma is when he borrowed a well-known sentiment from his favorite sport, golf. “You drive for show and putt for dough,” he said. Or in other words, focus on the things that truly correlate to achieving desired outcomes. This can also be true if they risk diluting time and energy on merely verbalizing good intentions that have a less true effect on the performance outcomes they seek.

Bridging The Leadership “Credibility Gap”

Addressing this gap may be more critical now than ever for Senior Financial Advisors. Whether as part of a formal succession plan or merely to be better positioned to allow others to absorb some of the burdens of running a complex practice. Senior leaders of advisory practices are in need of developing their next generation of leaders to be ready to step up and take the reigns.

So why do so many leaders of advisory practices appear to fall short when it comes to preparing their NextGen to step into leadership roles? The answer may lie in part in our inability to consistently bridge the gap between our words and our behaviors.

And how do we transfer 20 or 30 years of management knowledge to bright and eager yet untested talent? It starts by designing a progressive, systematic leadership development curriculum built upon a 360- degree collaboration and actually “running the business.” In doing so, we can dramatically shorten the learning curve for the new leaders.

This curriculum works best when it includes all operating and strategic elements of the business – From the more technical skills such as an in-depth understanding of the practice’s P&L or the mechanics of budgeting/forecasting to the nuances of managing the business’s softer side, such as collaborating with the staff. And don’t forget to include the more qualitative components of leadership. These include self-awareness training using tools such as the Emotional Intelligence (EQ) dimensions of leading people.

Spoiler alert: this process can be uncomfortable for senior leaders. It means that they will have to be fully transparent and vulnerable. Such as when they expose the rationale for certain decisions (some perhaps right, some perhaps wrong) over the business’s history that has resulted in the practice’s position today.

The 3 Keys to Preparing Our Next Generation of Leaders

Here are 3 Keys to ensuring we nurture the necessary leadership skills, know-how, belief systems, and value systems in the NextGen leaders on our teams:

Simply stated, “Leaders must know the way, show the way and go the way.”

1. Know The Way

“Knowing the way” means that both senior leadership and NextGen leadership need to participate in all key decision making within the business. It requires getting under the hood and understanding the trade-offs, risk/return calculations and methodologies for key decision making within the practice. Effective knowledge transfer is best when the exchange is “codified” in operating manuals or a Playbook for the practice. While we may operate just fine with the knowledge in our heads, seldom does it transfer well that way.

Be prepared to expose the new leaders to things like:

• How fees or pricing is set.
• How the mechanics of capital budgeting and P&L management are organized.
• Margin realization methods. Profitability and expense management.
• How market dynamics affect asset management or expense management planning.
• How to develop team talent and get the most out of the team members.
• How to go beyond managing assigned client relationships to understand capacity constraints.
• How to run the marketing and business development system to provide resilience to the practice.
• Understanding compensation, incentive systems and performance reviews.
• Client engagement: sharing profiles, back-stories and legacy needs.

By including the new leaders in all aspects of decision-making, we ensure that they “know the way” and gain hands-on experience critical to ensure the business will not miss a beat.

2. Show The Way

“Showing the way” may best be described as vision-casting and “seeing around corners” for the business path ahead. It extends beyond merely casting a vision for the business forward. The key element as it relates to transferring knowledge is to be humble enough to let others into the process, try the vision on for themselves, have a genuine debate and finally allow space for the new leaders to see their fingerprints on the vision of the business.

By co-creating a vision for the business, you can go a long way in engendering a stakeholder culture of leadership on the team.And visions usually benefit greatly when the team leaders embody their core values.This often includes exhibiting the behaviors you wish to see within the new leaders. Look for opportunities for the new leaders to imprint new habits and standards on their good actions.

Letting Go of “Me” and Adopting “We“

There is another essential area where Senior Leaders must “show the way” when preparing future leadership on advisory teams. As employees, it is not uncommon to focus on how decisions will impact us individually. But as future leaders of the practice, we will be tested in new and different ways. One of these is to put the welfare of the team and its members ahead of our individual needs or desires.

In his best-selling book, “Leaders Eat Last,” Simon Sinek makes a compelling case for potential leaders to accept the burdens, privileges, and genuine price of stepping into a leadership role.

“The true price of leadership is the willingness to place the needs of others above your own. Great leaders truly care about those they are privileged to lead and understand that the true cost of the leadership privilege comes at the expense of self-interest. . . And when a leader embraces their responsibility to care for people instead of caring for numbers, then people will follow, solve problems and see to it that that leader’s vision comes to life the right way, a stable way and not the expedient way.” Source: Simon Sinek, Leaders Eat Last

By demonstrating an ability to play for something greater than our own self-interest, we go a long way in knocking down the traditional “position power syndrome” and create the conditions for building genuine trust, advocacy and fidelity to the mission/vision of the business.

3. Go The Way

“Inspiration without perspiration is hallucination” – Thomas Edison

“Going the way” is where the rubber hits the road. It requires hard work, consistency and discipline. This is the moment of truth when our behaviors and actions must validate our words and intentions. By consistently “going the way,” we close the gap between talk and action, and in doing so, we go a long way in shrinking any risk of a credibility gap.

Going the way may include:

• Recognition of other’s achievements
• Active Listening
• Serving as a role model.
• Delegating
• Holding others accountable
• Conflict resolution
• Ability to adapt to change
• Time management
• Work-Life Balance
• Attention to details
• Emotional Intelligence

In closing, perhaps an epic leader, Gandhi, said it best and eloquently pointed the way as to how interconnected our beliefs, thoughts, words, actions, habits, values and destiny are all intertwined.

Our beliefs become our thoughts,

Our thoughts become our words,

Our words become our actions,

Our actions become our habits,

Our habits become our values,

Our values become our destiny.

For more information on how to prepare your next generation of leaders, contact Bill Kica at bkica@hightoweradvisors.com