As I declared when we launched the COO Roundtable podcast in late 2018, “Every advisory firm struggles with the goal of providing high-touch service to a larger and larger client base in a scalable and efficient fashion. It is the COO’s job to execute the owner’s vision through people and technology, and to execute that vision profitably.” I continue to have a chip on my shoulder when it comes to the overriding belief across our industry that Chief Operating Officers are merely “cost centers” and they are reduced to “really expensive tech people that don’t manage client relationships” and are, therefore, expendable. This is why, in almost every podcast interview I conduct, I try to mention the people side of the COO’s responsibilities because I believe they make up at least 75% of the COO’s job.
During our podcast interview, Stacey McKinnon recited a quote that drives her approach to her role as COO at Morton Capital, “You don’t build a business – you build people, and people build the business.” Heather Fortner echoed that sentiment during my interview with her when she said, “Very succinctly, my role (as COO) is to help create the vision and the strategy of the business plan of the firm and to communicate that strategy out to the team and the people who actually are on the front lines and make the firm run on a daily basis. And then, just to resolve issues and remove obstacles for them. My job is really about resource allocation.”
One thing we have heard time and time again during our interviews with COOs and other operations professionals is that their primary functions are around Culture, Strategy, and Change Management. Technology is not, despite many RIA owners’ beliefs, at the top of the list. As Susan Dickson, COO at Private Ocean, said during her interview, “It’s funny – the technology and the systems, while they’re challenging and they definitely are hard sometimes to integrate, if you keep the culture in a good place and you keep everybody bonding and bringing people together, and making sure that everybody knows that you know their participation is valued, it works really well.” Suzanne Williamson, also from Private Ocean, said during that same interview, “I think if you have happy employees, that comes across to your clients. And so, I think being very focused on the employees and the culture here and having it be a place where people want to come to work, promote a lot of learning, we give employees the ability to get feedback and share ideas…”
In my interview with Mark Tibergien and Karen Novak, COO of Advisor Solutions at BNY Mellon Pershing, Karen stated, “Matt, I cannot emphasize enough the importance of somebody in a role like mine where the people come first. It’s really part of our vision to be the employer of choice. We want to make sure that we are attracting employees to our organization that want to be here and that we are providing opportunities for their progression professionally and personally, and that we’re committed as an organization to investing in our people. I joke a lot of times with my team that I am the COO for the people.” Kristi de Grys, COO of Merriman, stated during my conversation with her, “Culture happens one conversation at a time. And that means being present and engaged with our employees one-on-one, every day. Helping them understand what they’re doing and how it ties into our mission.”
When I asked Brandon McKerney what he felt his primary role was as COO of Columbia Pacific, he didn’t hesitate to say, “My greatest impact is on our people, our culture, and our vision. I think the COO’s job is to empower the employees, make sure they have all the resources they need and all the support to be the best professionals they can be, but also make sure they can live their best lives outside of work. I think success starts with the people and I think it’s our job (as COOs) to be their support structure – whatever our people need to be successful.”
Mike Reed, COO at Dakota Wealth Management, echoed Brandon’s synopsis of the COO’s role when he said, “80% of what I do throughout the day is personal interaction… helping someone envision their professional path or dealing with an issue. It could be HR benefits, it could be workflow, it could be anything, but it’s really people-driven and I think my background as a caregiver has helped me enormously in this area.”
With regard to a COO’s role in change management at the firm, Scott Slater of Fidelity had great advice, when he pointed to the people side of the equation, rather than simply focusing on the new technology or new workflows the organization was looking to implement. “[COOs] who are going to be more successful really recognize that their role as change agent isn’t to come in and be a bull in a china shop and really shake things up, because most organizations, that’s not what they’re looking for. You have to be patient with the pace that you’re allowing this to go and to be more selective in the wins that you want to get, and then that way you can really immerse yourself in the DNA of the organization itself, and really help take its best qualities and create a more effective organization.”
To those advisors that fight me and say, “I don’t need a full-blown COO, I just need a tech expert to manage my technology stack,” I always reply, “OK, but who is going to be using those systems to provide your clients top-notch service?” In our article, “RIAs Are Struggling With Too Much Technology, Not Too Little,” we described the common frustration of an RIA owner throwing more and more technology at the staff, hoping the next technology tool will be the silver bullet that cures all. Without someone focused on the people and the culture, however, the firm has no chance of gaining adoption of these new systems. As Stacey McKinnon discussed in our interview, “Adoption only comes with trust, and so your team has to trust that the leadership of the firm is acting in their best interest, has the best of intentions, and that whatever new technology or workflow, new process that you’re implementing, is going to be in everyone’s best interest.”
Michelle Thetford, COO at Hightower Advisors, summed it up nicely with this quote, “This business, at its heart, is all about people.”