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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
Ray Sclafani (00:00.142)
Welcome to Building the Billion Dollar Business, the podcast where we dive deep into the strategies, insights, and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics, and mindset shifts that set the top 1 % apart from the rest. I'm Ray Sclafani, and I'll be your host.
Whenever we reflect on generational leadership transitions, we strive to focus less on titles or succession plans and instead focus on something far more basic yet far more powerful. Do people want to follow these individuals? It's a question we often ask the owners and CEOs of advisory firms as part of our coaching engagements. They see their next generation leaders showing up, executing, managing complexity,
and freeing the founders to focus on their own strengths and passions. Clearly, they have proven themselves to be next generation leaders who are effective and critical to the firm's future success. But the important question that's often overlooked is whether the rest of the organization views them in a similar light or instead sees them as just someone else who's executing. Why? Because there's a tremendous difference between execution and followership. The Harvard Business Review
defines followership as the ability to actively and responsibly support, influence, and strengthen leadership efforts in pursuit of shared organizational goals. It reflects a mindset of contribution, accountability, and commitment to something larger than oneself. And why does followership matter? Keep in mind that most next generation leaders cut their teeth in a culture that has encouraged and reinforced certain behaviors.
Ray Sclafani (01:57.922)
And over time, they learn from the people who hired them and mentor them what works and how decisions get made. That's not a bad thing. And it's the way most organizations operate. But the reasons and actions that help a company grow from say 10 to 50 employees are often very different from those that help it grow from 50 to 100 employees or more. And this is where followership becomes more important than execution.
Marshall Goldsmith described this phenomenon well in his book, What Got You Here Won't Get You There. Korn Ferry has also studied followership from a practical perspective. Their research on effective transitions for next generation leaders found that more than 80 % of leaders failed to transition effectively into followership roles for the first time. The reason isn't due to a lack of skills, but rather because they lacked the necessary organizational
influence. By improving these personal qualities, future leaders have an opportunity to increase team engagement by more than 40%, according to Kornferi Research. The simple truth is that it's influence rather than competence that defines the realm of followership. The next generation no longer needs to ask, can I be a leader? Instead, the question should be, will people choose to follow me? Mentors and founders face a similar question.
Are you developing someone to lead the firm into the future or someone limited to executing within the current system? To answer these questions, next generation leaders should focus on the following steps. The first is declare the leader you intend to become. This is where the process begins and where the next generation leader often jumps too quickly. Before followership can be evaluated, a leader must have a clear sense of who they are becoming.
not the role they currently hold, nor the role someone else has assigned to them, but the leader that the individual is committed to becoming. Mentorship is critical in this phase. Founders and controlling owners must contribute to the process by sharing their perspectives on the organization's future direction and the leadership skills required for success. Next generation leaders must likewise contribute to the process by offering a candid self-assessment, including their particular strengths and tendencies,
Ray Sclafani (04:22.518)
and growth opportunities. The dialogue will help clarify which skills and abilities are currently possessed and which need to be developed. If this exercise is not thoughtfully undertaken, the entire process can quickly become disorganized and turn into a personal critique rather than a growth opportunity. The second step is about assessing your current followership. You know, a proper assessment should include always three key inputs.
and honest self-assessment, feedback from a larger group, including peers, cross-functional team members, and others who interact with the leader in different circumstances. These individuals can provide insights that aren't apparent in one-on-one feedback. And then third, feedback from direct reports or their manager, depending upon the future leader's position. These are the people who would be most exposed to and therefore best positioned to assess consistent leadership behaviors.
When next generation leaders bring all three components of feedback together and mentors facilitate the process without filtering, well, the dialogue becomes much more meaningful, enabling future leaders to move from mere conjecture and opinion to tangible input and data-based insights. To help solidify the assessment, we recommend it client-wise using the following seven fundamental questions that focus on followership rather than leadership style. One, do people trust the leader's intentions?
Two, do people feel heard before decisions are made? Three, do people experience growth and development when around this leader? Four, do people see accountability when things go wrong? Five, do people feel like the leader is advocating for them even when they're not around? Six, do people understand what the leader expects of them? And seven, would people want to work for the leader again?
mentors will realize that these seven questions help establish a common language that eliminates ambiguity and focuses on followership, which in turn directly influences scale. Okay, and then the third step is design a focused development plan. While value can't be created by assessment alone, it can certainly be generated by synthesizing the self-assessment, the feedback received, and direct input into a clear development plan.
Ray Sclafani (06:48.962)
This step turns leadership development into a process. The plan must be specific, however, and should include opportunities to gain influence, not authority, chances to work with others, not to control them, and situations to test decision-making, communication, and trust building. It's this phase, especially where mentors bring considerable value to the process. They help the next generation leader identify the right leadership opportunities, the right risks to take, and the right moments to step forward.
or step back. When both the mentor and the next generation leader share the same data, the development process aligns with the firm's future, not with the firm's current pressures. One other item worth noting here is that this plan has to be shared with others. By sharing it with the individuals who provided the feedback, well, the future leader will increase his or her credibility and demonstrate a commitment to the development process. Remember,
Execution is always necessary. Without it, your firm wouldn't exist for long. Followership is the glue that will allow your enterprise to transcend its founders and controlling owners, not just live on, but thrive through future generations. For the next generation leader, this process provides clarity. For the mentors and founders, well, it's a disciplined approach to developing leadership skills without relying solely on instincts.
When a leader incorporates these three elements, the self-assessment, a multi-source feedback loop, and the development design, they gain a comprehensive view they can use to build the firm's future. With each episode, we like providing coaching questions from the content so that you and your team can have a chance to reflect. Today, there are three. First, beyond managing relationships and meeting operational demands,
What specific actions are your firm's next generation leaders taking to ensure their team members choose to follow them rather than merely report to them? Two, if you were to define the leader you intend to become, independent of your current title or the tasks founders or controlling owners have assigned to you, what three core values would define your leadership style three to five years from now? And the third question,
Ray Sclafani (09:09.994)
In a room full of your peers and direct reports, would they say you advocate for their growth even when they're not present? Or do they see you primarily as a high level executor of the firm's current goals? If it's the latter, what steps can you commit to taking to change their perception? Thanks again for listening and please share this with a colleague or a next generation leader who's working on their own development. And to learn more about the ClientWise Next Generation Leadership Series,
Feel free to reach out to our team at clientwise.com. Well, thanks for tuning in and that's a wrap. Until next time, this is Ray Sclafani. Keep building, growing and striving for greatness. Together, we'll redefine what's possible in the world of wealth management. Be sure to check back for our latest episode and article.