Upgrading Your RIA Operating System for 2023
It’s likely a new year has made you think long and hard about your firm’s goals for 2023. If these plans include big ambitions to scale and grow, you’re going to need a robust operating system to make it happen.
Here’s a look at the importance of your operating system and what you can do to shore up your systems and meet those growth goals for 2023.
First, What Is Your Firm’s “Operating System?”
Before we dive into upgrading your operating system, it’s helpful to review what, exactly, an RIA operating system actually is.
Essentially, this is the core of your business — even if it’s something you haven’t necessarily defined yet. It’s made up of a bunch of small, yet meaningful, decisions and tasks that turn a group of individuals into a unified team of people who operate a profitable firm.
Think of your operating system in terms of these three questions:
What are we doing?
How are we doing it?
Where are we going?
What are we doing? In your day-to-day, consider what you and your team members actually do. This includes how you communicate as well as what channels you use to do so. What are your business’s standard operating procedures (SOPs) and workflows? These are what help your team members know what’s going on, who to report to, and how to complete tasks correctly.
How are we doing it? You can easily define your team’s communication methods and processes, but what about their effectiveness? Are you measuring your successes and learning from your failures or mistakes? Even if you have SOPs written down somewhere, that doesn’t necessarily mean they’re being followed as intended. Is it possible there are certain workflows or processes that get forgotten when things get busy or new advisors are onboarded? For many firms, this is a common occurrence.
Where are we going? Simply put, what goals and objectives are your firm working towards? This is what should, ultimately, drive your operations and define your processes. Maybe you’re looking to grow to a certain AUM, build up the size of your team, or position yourself for a future M&A. Whatever it is, this should be considered an important component of your operating system.
Why It’s Important to Understand and Prioritize Your Operating System
Having a well-defined and efficient operating system becomes more critical for RIAs when they desire to scale or grow.
While new firms will experience an initial boom in business, there comes a point when RIAs tend to plateau and the next stage of growth gets harder and harder to achieve. If you find that your rate of growth has halted, it’s likely your firm has come to a crossroads. It’s at this point that your operating system could either make or break your firm’s goals.
In fact, your operating system - when used effectively - can be your firm’s “secret weapon” to improving efficiency and scaling with ease. Or, when gone unchecked and underutilized, it can be detrimental to your growth initiatives.
3 Red Flags of an Inefficient Operating System
#1: Your team communicates often, but members are still confused, frustrated, or feel “out of the loop”
The frequency of communication isn’t an issue for your team. You call, email, meet in-person, instant message, text, etc… yet messages still seem to get lost in translation or forgotten altogether.
It’s not that there’s a lack of communication amongst your team members, it’s that the communication is not happening in an effective manner.
#2: It feels like accomplishing important tasks is always chaotic and rushed
Your team may struggle to get big projects done. In order to achieve anything of major importance, the project needs to be presented over and over as a top priority and, inevitably, disrupts everyday workflows.
In the end, team members feel frantic and overwhelmed as they try to accomplish this task in a timely manner. The sense of urgency may cause people to skip crucial steps, neglect to document their progress, or create added confusion.
#3: No one is really aligned on day-to-day tasks or overall firm goals
Processes are loosely followed and mostly communicated via word of mouth. Because of this, most team members know what their daily tasks are, but they lack a bird’s eye view of what’s going on at a higher level. They may be siloed, which can cause them to feel detached from the firm’s mission and goals.
How to Upgrade Your RIA Operating System in 2023
These red flags tend to happen when RIA firms get stuck in a vicious cycle. They follow the same patterns by communicating the same way (even when it makes meetings or calls feel a little pointless), and they eventually make it to the finish line — but not without feeling exasperated, confused, and stressed.
Firms that find themselves in this position have still been able to function and grow to a point. And that can make it especially hard to break free. Trying to step back so you can rebuild or reimplement workflows may feel like a daunting and overwhelming task, especially if you’re attempting to go it alone. But in reality, neglecting to do so leaves you spinning your wheels without traction.
How do you stop spinning your wheels and get your firm in a position to scale?
By rethinking how your CRM plays into your business’s operating system.
It’s possible that, until now, you’ve considered your CRM as nothing more than a glorified Rolodex or client phonebook. But in reality, your CRM has the unique ability to serve as the hub of your firm’s operations.
By using your CRM to upgrade your firm’s operating system, you can better prepare your firm to scale successfully by:
Creating clear lines of communication
Documenting processes and workflows
Providing detailed task management and oversight
Creating critical pipelines for current and prospective clients
An optimized CRM puts all team members on the same page, creates baked-in accountability, and makes it possible for your firm to grow without the risk of any loose ends unraveling.
The Secret to Scaling? Turbocharge Your Operating System
Simply put, your CRM is the beating heart of your operating system.
When it’s customized to support your operating system and utilized effectively by your team members, your CRM has the power to transform inefficient practices into manageable workflows.
If upgrading your operating system is a goal for 2023, there’s no better time than now to get started. We understand that this is something not many RIAs have the capacity to take on alone. That’s why we’ve built a team of passionate CRM professionals who can help you take control of your firm’s operations and amplify your growth goals. Feel free to reach out to our team and learn more about how we work and what we can do for your firm.