It pays to take time to define, assess and manage your staff's capabilities. Beverly Flaxington and Mike Slemmer are principals of The Collaborative, a Medfield, Mass.-based business consultancy to financial-service firms and software companies.

By their very nature, investment firms have to focus on the financial aspects of their businesses: how best to invest client funds, what investment models to use, how to charge fees, how to manage expenses for greater profitability. But many firms overlook an important hidden asset that has nothing to do with stock or bond picks.

We're talking about people, staff.

So why don't more firms focus on this important asset? Why do so many well meaning organizations trundle along without trying to ensure that their staffing structures are effective so that its employees are suited to their roles and, as a result, happy contributors to the firm's success?

Hands, heads, hearts

In fact, many firms shy away from the "people" component because it's hard to control. Asset allocation can be implemented by following models; staff management requires an understanding of the individual employee's strengths and weaknesses and a |image1|plan for exploiting strengths and minimizing the effects of weaknesses -- and this is anything but an exact science.

Remember Henry Ford's comment? "Why is it that I always get the whole person when all I really want is a pair of hands?"

Bottom line: there's just no easy approach to balancing employee satisfaction with a desired level of productivity. 

But firms can increase the likelihood that they manage their people as well as they manage investment processes. It calls for a two-step approach: assessing what you've got and planning for what you want to have.

Ensure you have a well thought-out organizational structure. What roles do you really need for "best practices" management in your market and for the products you offer?
Make people's roles and responsibilities clear. What's expected of each role and what are the expectations for the person in that role? Even if it's not a formal job description, these should be documented and communicated so it's clear what area each staff member is responsible for.
Assess the capabilities of the person filling each role. What does each staff member do well? In what areas might coaching or mentoring pay off? Some kind of performance assessment process is necessary. Again, it doesn't have to be a formal process, but taking time to sit with employees on a regular basis to provide feedback, assess their contributions and solicit input on ways to improve is a good idea.
Set expectations -- and put in place a reward system so people know they're doing well (or not). Employees grow dissatisfied when they feel they're not getting recognition for meeting or exceeding expectations.
Think about your firm's culture. Approaches to communication, openness to feedback and change management are defined by culture. One firm may thrive in an open and "anything goes" culture, another may more formal communication through defined channels of command. Don't be passive about this: create the culture that works best for your firm.

Hiring, retaining and motivating the right people can be the key to success. But, just as a good investment process doesn't happen by chance, neither will getting the right people into the right roles and ensuring they stay there happen "just so."

Managing your people as you would an investment portfolio -- according to a sensible and feasible plan -- will result in significant benefits to your firm over time. -FWR

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