Sunday Email: Operating Models / Getting Deeper with Clients

Read time: ~6.30 minutes

Happy Sunday!

Every Sunday I offer strategies for the week ahead and a thought to fuel your action.

Our industry is evolving at a rapid pace. The days when a small, family-owned advisory firm could thrive with just a handful of clients are quickly fading into the past. Today, we’re witnessing a shift toward larger, more sophisticated operations.

The data tells the story: Between 2009 and 2023, the number of firms with 0-10 employees grew by 17%. Meanwhile, firms with 10-50 employees saw a staggering 113% growth, and those with 50-250 employees grew by 110%.

This growth comes with added complexity. More team members mean more moving parts. What used to be a quick hallway conversation now requires systems, processes, and intentional communication to maintain quality.

Yet, the silver lining is clear—we’re helping more families. Firms that once served fewer than 100 clients grew by just 1.7% over the same period. However, firms serving between 100-1,000 clients grew by 41%, and those serving 1,000-10,000 clients grew by 121%.

With this growth, we’ve expanded our impact, but we’ve also encountered new challenges. Chief among them is maintaining consistent client experiences while effectively developing our teams. As firms scale, the founding leaders inevitably find themselves more distanced from the day-to-day client interactions and the training of new employees. I’ve felt this shift firsthand, grappling with one of the most challenging aspects of leadership: delegation.

I’ve always considered myself a novice delegator—a work in progress. Like many of us, I fall into the common traps. When faced with the time and effort it takes to teach someone how to do something, I often think, “It’s quicker if I just do it myself.” Sound familiar?

Sometimes, I take an even less effective route—I abdicate. I hand off tasks with minimal guidance, assuming the other person instinctively knows what I expect. Of course, they don’t. And why should they? They interpret the goal and task from their perspective, not mine. The result is almost always a mismatch between expectations and outcomes.

I had a wake-up call about my delegation skills when scaling our technology company, Benjamin. We hired an experienced sales leader, confident that his extensive background with larger, more structured businesses would help us build the needed sales process. We were in startup mode, and I naively assumed that his experience alone would bridge any gaps in expectations.

I gave him broad directions:

• Connect with the team.

• Talk to clients.

• Sit in on how I do the process and then build a repeatable sales process to help us hit our targets.

I had been doing all of the selling but never documented it. I assumed we were aligned, but we weren’t. The process never fully materialized, becoming a persistent source of tension. The fault wasn’t his—it was mine. I gave him a blank slate, expecting him to read my mind. Even seasoned professionals need clear guardrails and defined expectations. I had abdicated rather than delegated, and it showed.

As entrepreneurs, we often struggle with letting go. We’ve been doing things our way for so long that explaining it or trusting someone else to do it feels daunting. But this is the challenge our industry faces as firms grow. We’re increasingly distanced from the execution of critical tasks, whether it’s client service or operational duties, and that distance can lead to a decline in quality and consistency.

We build our businesses on trust, and more people mean more opportunities for that trust to erode. I’ve learned through experience that trust doesn’t stem from having all the answers. It comes from consistency and clarity— having your sh** more together than others, regardless of how many people are involved.

One framework that resonates with me is the concept of the 4 C’s of trust: commitment, Caring, Consistency, and Competence. These pillars ensure trust, both in client relationships and within our teams.

• Commitment: Are you reliably following through on promises?

• Caring: Do your clients and team members feel valued and important?

• Consistency: Are experiences with your firm predictable and repeatable?

• Competence: Can you deliver on your promises, even when challenges arise?

As we scale, these pillars become more challenging to maintain. Different people interpret them differently. For example, a founder might effortlessly deliver “white glove service,” but when other team members step in, their interpretation of that same service could be miles apart. If someone hasn’t experienced that level of care, how can they be expected to deliver it? Consistency and commitment become even trickier when team members have different definitions of “as soon as possible” or processes aren’t clearly defined.

This complexity isn’t unique to wealth management.

Peter Drucker, the pioneer of modern management theory, spent his career studying what makes businesses succeed as they scale. His work continues to influence how we think about managing growth. The Drucker Institute developed a ranking system to evaluate public companies based on customer satisfaction, employee engagement, innovation, social responsibility, and financial strength. We need to focus more intensely on these areas as our firms expand.

Microsoft topped the 2022 rankings for best-managed companies. What stood out was their long-term commitment to cloud computing—a strategy they began investing in back in 2013. It took nearly a decade to bear fruit, but it was no accident. Their success resulted from a carefully aligned operating model that kept the organization moving toward a shared vision.

In my own experience, adopting an operating model has been transformative.

Our firm has been using the Entrepreneurial Operating System (EOS) since 2019, and it’s been invaluable as we’ve grown from 35 to over 100 people. The structure EOS provides helps us navigate the complexity of growth while staying aligned on our long-term vision. Many I speak with are adopting EOS to some extent. Based on the search history for EOS, we can see how it’s gained in popularity over the past few years.

The key benefit of EOS is that it gives us a common language and framework. We have regular check-ins, quarterly goal-setting sessions, and clear accountability charts. Our weekly meetings are focused on data, issues, and next steps, ensuring that we stay on track without getting bogged down in bureaucracy.

More importantly, EOS reinforces the 4 C’s.

Our proven process (a tool developed within EOS) ensures consistent client experiences. The “Followed By All” (FBA) documents prescribed by EOS outline expectations at every stage, minimizing the risk of oversight. The 5-5-5 meetings (a quarterly meeting cadence suggested via EOS) provide ongoing feedback loops, helping team members grow while keeping standards high.

When my dad started our firm nearly thirty years ago, the business was simpler. Today, as we transition from young and straightforward to mature and complex, the need for operational frameworks has never been greater.

We’re not alone in this challenge.

Large companies have navigated this transition before us, sometimes successfully. The lesson is clear: structure matters, not in a bureaucratic sense, but in a way that aligns people, processes, and goals. Whether you choose EOS, OKRs, or another system, what’s important is that you choose one.

Our industry’s needs are evolving, and the demands on our businesses are higher than ever.

Embracing structure isn’t about stifling creativity or flexibility—it’s about creating the foundation needed to continue serving clients at a high level as we grow.

A Thought To Ponder This Week

I went to the doctor the other day.

He asked the inevitable question: “how many drinks do you have on average each week?”

In my early days it was harder to answer this, but I still get uneasy answer it.

I probably had more than 6 glasses of wine in the week (I’ve got some young kids! Give me a break!)

But I felt that may be too high in the eyes of doc.

So, I said about 3 - 4 glasses per week.

Why did I care?

Something innately in all of us drives us to answer questions in a way we perceive others will find suitable.

This is mainly in regards to more taboo topics.

Money is taboo.

Despite the doc being the professional, I didn’t give him direct information.

The same is likely happening between us and our clients every day.

They don’t want to be judged on their decisions or they don’t want to be exposed to a reality that challenges their current beliefs.

So, as we head into the week, think about some ways we may be able to go deeper with our clients to remove this barrier and ensure that we get the truth and all of it.

The best is ahead!

-Matt