Managing Growth – Answering the Perennial Question

There’s a painting hanging at our new office in Sydney that I’ve had forever. It’s by a French artist, Francois Anton. It’s called ‘Chicken and Egg’. Five dark suited men sit pondering the perennial question, which came first?

The paintings is in our office for a reason. The question is one we ponder often for our clients as we help them manage growth. Which comes first, the new person, or the portfolio? 

Under the pressure of growth, it's tempting to have a bet each way. The principal takes on an embryonic portfolio until it’s grown sufficiently to justify a new head count. But there are problems with this. The principal comes to resent the day-to-day responsibilities of managing schemes. It’s their time to fly and portfolio responsibilities are a dead weight. The clients aren’t happy either sensing they aren’t the priority, becoming fearful that they’ll soon be punted to a junior, perhaps the very reason they left their last place. 

So, is it people or portfolio that comes first? Based on bitter personal experience, I say neither. It’s profit, after-tax profit, that must come first. The safest way, the best way for your clients and your practice to grow, is to resist the temptation to add to your head count or your portfolio until you have achieved high-performance status and, as a result, have cash in the bank to fund expansion.

Cash reserves enable you to recruit the right person without the weight of incessant client demands. Cash enables you to chase the right new business and say no to the comparison price shoppers. Cash enables you to buy the right operating system to propel your practice forward. 

Achieving high performance status in strata management is no mystery. It’s a process that takes daily practice and discipline and it starts by avoiding the traps made by the many founders that have gone before you.