Nineteen years ago, I returned from my family’s winter holiday, unlocked a small, empty, rented office, and started my own tax and financial planning firm.
I knew what it would take for my business to succeed. I would have to become the best financial adviser I could be. I would also have to attract enough clients and the right sort of clients to support a growing company, as well as my young family, since my wife was staying home with our two young daughters at the time. And, at some point, I was going to have to build a staff that could take the business to places I would never reach alone. Otherwise, I would not be creating an enterprise—I would merely be keeping myself gainfully occupied until retirement. If I had wanted to do that, there would have been no reason for me to leave my former job at a big accounting firm in the first place.
Thankfully, things worked out. Today, Palisades Hudson Financial Group has 22 employees, with offices in New York, Florida and Georgia, and clients nationwide and overseas. Our investment advisory unit has more than $1 billion in assets under management. We’re already making it onto lists of the top independent financial planning and investment advisory firms in the country, and we’re on track to meet our goal of becoming one of the leading independent national firms in our field by the end of this decade.
But something unexpected happened to me along the way. Though I had been a senior manager at a big accounting firm, I discovered, as our new firm grew, that a lot of my management techniques were counterproductive. I wanted to have the most talented, dedicated and long-tenured team of colleagues possible. But the high-pressure, high-turnover, hierarchical nature of the big firm held me back every time I replicated elements of its work environment at my firm, even though my goal was to produce similar work of equally high quality.
It no longer mattered how good a financial adviser I was. For Palisades Hudson to succeed, what mattered was how good a manager I was. So, as the years passed, I tried to become the best manager I could be.
And teaching management to the rest of our team became as important as teaching taxes or investment planning. Last year, we put all our managers through seven days of intensive in-house training, covering topics such as behavioral psychology and fostering creativity, as well as traditional areas such as marketing and human resources. I helped design and teach most of our courses, but that does not make me some sort of management guru—far from it. Running a business and making the mistakes that go with that job have shown me how much I benefit from the counsel of competent people around me. But I think I have come far enough to share some thoughts about what management really is and how I learned to be better at it.
What makes a good manager?
A good manager sets goals and priorities and, each day, brings unlimited opportunities that must be addressed with limited resources. Without clear goals, it’s easy to get bogged down and lose sight of the larger picture. Without priorities, you can find yourself ignoring big opportunities while you chase small ones.
Just because goals are long term does not mean they should be exempt from change. AOL met its goal of becoming the Internet access industry leader, and it had a great business when people used dial-up to get online. AOL also succeeded in transforming instant messaging from a convenience into a mass-market tool. But it missed the move to broadband and failed to adjust its revenue model before dial-up faded away. Yesterday’s goals were important yesterday, but they should not ossify and obstruct the goals of tomorrow.
Every business of every size requires management. If you’re a one-person shop, you have to manage yourself. You only have 24 hours a day and you can’t spend all of them working. Having goals and priorities lets you decide what work is most important and the best order in which to tackle it, whether you’re managing your own tasks or coordinating an entire team.
A good manager establishes a path to reach goals.
Management is fundamentally about planning. How do you make the most of your opportunities and resources while minimizing distractions and threats? A manager must create a clear and achievable plan to reach the enterprise’s goals once they have been established. A good manager asks, “What does this team need to succeed and how do we get it?”
Plans and goals must be flexible to adapt to circumstances, but not so transitory that they become meaningless. Goals should be changed only after much thought and deliberation, whereas plans to reach those goals typically require more frequent adjustment.
A good manager wins commitment by earning trust.
We all say we want “team players,” but many managers forget to act as part of the team. It’s important for your workers to trust each other, but it’s even more important that they trust you as their manager.
A few basic steps can help build trust.
- Be considerate. Employees have lives and families that take priority. Respect that fact and accommodate it as much as you can.
- Be transparent and consistent. No one can be expected to commit to an employer who is arbitrary, or whose agenda is opaque. In the absence of information, people protect themselves by keeping their work conservative and trying to avoid being held responsible for errors.
- Be fair. Avoid having favorites and scapegoats. Critique the work, not the person.
- Be constructive. Everyone makes mistakes. Use them as learning opportunities. The manger’s job is to create systems and structures that keep the inevitable mistakes at a tolerable magnitude and frequency.
- Be realistic. If you ask an employee to do something he or she cannot do, the employee will fail. Set people up to succeed, not fail.
- Be decisive. Not everyone is cut out for every job. If someone simply can’t succeed, diagnose the situation early and move that person out—it’s better for everyone in the long run.
Avoid turning work into a zero-sum game, where someone’s success must come at another’s expense. At Palisades Hudson, we promote associates to the level of client service manager when they are ready to take responsibility for delivering advice directly to clients, even if they have no staff to manage. The position is a function of the responsibility they assume for client work and satisfaction. People do their best work when they know they are valued, and everyone benefits from helping others succeed.
A good manager helps people achieve their potential.
Find ways to help your staff succeed. Such strategies include training, coaching and arranging responsibilities to play to individual strengths as you make adjustments for weaknesses. The idea is to make workers better at their jobs over time and to match their positions to their talents.
Don’t try to make everyone work the way you do. Recognize different communication and learning styles. There are as many styles of work as there are styles of management. Help people do their best in whatever style comes natural to them.
A good manager shares credit and accepts responsibility.
Praise should always flow down and responsibility should always flow up. While it’s easy for managers to abuse their power to cover their mistakes, it’s never a good idea. Be quick to give credit to those who work for you. You don’t need to hog the limelight.
Praise in public but criticize in private. When doing either, always focus on the work, not the person. Feedback should never become a matter of whether a worker is “good” or “bad.” Instead, focus on specific achievements or particular problems and offer constructive suggestions for improvement.
A good manager often delegates but never “dumps.”
You can delegate work, but not responsibility. As a manager, you’re not only accountable for your staff ’s work, but also for providing all the tools you can give them to ensure their success. This means you have to train them when they lack the skills or experience you have, and you have to explain objectives and issues so your staff is prepared to address them. Be clear about your requirements, standards, objectives and timeline—these should be stated at the beginning of the project and should change as little as possible.
A good manager sees opportunities in problems and lessons in mistakes.
When did anything in life ever go perfectly? It’s just a matter of time until something goes wrong. Be prepared. Make certain your staff feels safe—and encouraged— to bring you bad news quickly. A manager’s worst nightmare is the problem they cannot address because they don’t know it exists. The sooner you’re aware of trouble, the better your chances are of minimizing the damage and getting things back on track.
Sometimes problems will arise because you or your staff made mistakes. Mistakes should be acknowledged and serve as learning experiences. No one benefits if you respond to errors with anger and assign blame. Instead, consider what you and your staff can gain from the experience, even as you contain and address the current problem. This does not mean you cannot hold people accountable for their performance, but since everyone makes mistakes, even a large but isolated error says nothing about an employee’s long-term value.
A good manager manages on multiple levels simultaneously.
I have come to see management as having three components: administrative, operations and strategic.
Administrative management deals with ordinary, but essential, day-to-day tasks, such as making sure we have all the information for each tax return we prepare, and that each return is completed and sent to the client on time. When I first started the firm, I took care of this task. Later, I delegated it, but only after I set up a system to ensure it was done correctly.
Operations management involves getting all the necessary tasks done as effectively and efficiently as possible. In our tax return business, operations management includes deciding how many people to assign to a return and which staff members to assign. Operations would also include having the technical skill to identify all the issues and planning opportunities that a return preparation assignment might present.
Strategic management looks to the longer term and the bigger picture. For senior managers, it’s where you want to focus your energy once you know operations and administration are in good hands. In our tax practice, strategic management included my decision to not outsource our tax work overseas, and a more recent decision to re-evaluate the software tools we use to prepare our returns.
As our firm’s top manager, I take responsibility for all three of these levels of management, but I spend most of my time on strategic issues where I can do the most good.
A good manager learns to do better work through other people than she or he could do alone.
You may have been a great lawyer, salesman, accountant, chemist or engineer before you became part of management. Your talent in your former position may have been why you were promoted, but it’s no longer central to your work. Your job is not to be the best technician anymore; it’s to make everyone else as good as you were or, preferably, better. The sooner you learn this, the better manager you will be.
Do I long for the era when I was the office expert on all financial and business topics? Not one bit. I have talked with many fellow professionals over the years who say they would miss the hands-on aspect of drafting every will, approving every investment, signing every tax return. Some of them say they want to do this until the day they land face down in their bowl of cornflakes.
I guess I dreamed bigger. I wanted other people to devote themselves to the company I started and, for that to happen, the company had to become bigger, better and more durable than I could ever be alone. I wanted our clients to know that Palisades Hudson will be here for them even when I am not. I wanted to watch and help young colleagues become better, individually and collectively, at my old work than I was.
The professional credentials in my byline mean that I am still a Certified Public Accountant and Certified Financial Planner. But somewhere along the line, I came to realize the most important credential on my resume is the one that does not begin with a capital letter. My most important job is to be a good manager
