Leadership And Management Positions: Who Does What?
What types of leadership and management positions are firms adding, and what responsibilities do they typically assume? Let’s look at a few of these roles, from the most common to the more sophisticated (and typically hard-to-fill) positions.
Office Manager. As a firm’s production grows, the number of support staff typically increases as well, even in a solo practice. A firm’s first management hire tends to come around employee four or five—usually some type of office manager who handles operational, training, and HR questions and issues for the advisor’s support staff. Up until that point, single-advisor firms may find themselves in a kind of limbo; the firm’s production might allow for hiring several staff members, all of whom take their direction from the advisor, but not a dedicated manager to supervise the support staff. A certain percentage of the office manager’s time may be dedicated to doing client service work and filling in when other staff members are out. Once production increases to a certain level, the advisor may decide to have the office manager focus solely on supervising other staff members. (Although many advisors say they don’t want to be involved in daily operational issues, some find it difficult to delegate the responsibility for managing staff.)
Practice Manager. The responsibilities of this midlevel position typically go beyond those of an office manager. In addition to taking charge of HR matters and daily operational paperwork, a practice manager might oversee some of the firm’s key processes and deliverables, like managing staff charged with implementing the marketing calendar, as well as making decisions regarding marketing expenditures. The practice manager may also handle some duties that an office manager would typically be responsible for, such as dealing with office maintenance and the cleaning crew; interfacing with technology service providers, coffee distributors and other vendors; and ordering office supplies.
Chief Operating Officer. Falling somewhere between a practice manager and a CEO, a COO would tackle many of the items on the lengthy list of management responsibilities above. Typically, the COO oversees all operational issues for the firm, taking charge of daily workflow so that the advisor is truly free to spend the vast majority of time meeting with clients. As opposed to working with the advisor to determine workflow, the COO researches how other firms pursue daily operations and proposes changes and improvements within the practice, in collaboration with the staff. Although the COO usually isn’t the lead on defining the firm’s culture, as a manager, he or she influences how that vision is brought to life.
Chief Executive Officer. Although plenty of advisors understand and appreciate the role of a CEO, few aspire to be one—especially once they give it a try. Since serving as CEO of a larger firm involves all of the activities listed above and more, little time is left over for client work and the revenue-generating activities that drew most advisors to the profession in the first place. I’d guess that fewer than 10 percent of advisors are a strong fit for the role, with the rest lacking either the inclination or the skill set. Of course, that doesn’t mean the owner of a firm is willing to pay someone else to handle the management tasks he or she has attempted to do all along, successfully or not. The decision to hire a dedicated CEO is therefore one that only a few very sophisticated enterprises are likely to embrace.