As noted in my May 2001 column, benchmarking is used by companies throughout the world to match their performance to the best firms when it comes to critical aspects of operations. This month, it's our turn to do some benchmarking as we search for an answer to the question, “How do you measure success?”
Benchmarking often takes us to new arenas, and that is certainly the case here. We turn to Dr. Avedis Donabedian of the University of Michigan Health System. He is an internationally known health care expert who has become a champion for health care quality — primarily because of what he experienced while he was a cancer patient himself.
In a June 12, 2001, New York Times article titled “An Expert On Health Care Evaluates His Own,” Donabedian emphasizes what he calls his seven pillars of quality:
Efficacy — improving a patient's well-being.
Efficiency — obtaining the greatest improvement at the lowest cost.
Optimality — balancing costs and benefits.
Acceptability — adapting care to the wishes, expectations and values of the patient.
Legitimacy — providing care acceptable to society at large.
Equity — distributing care fairly.
Cost — providing the greatest benefit at the lowest cost while optimizing the cost/benefit ratio.
It's safe to assume the health care system is well aware of Donabedian's seven pillars, but awareness is never enough. Implementation is what matters. And success only occurs when health care providers study the seven qualities, openly and honestly benchmark them against their current practices and then make positive changes.
In the brokerage field, production at the end of the quarter is perhaps the most common industry benchmark. But we must change this benchmark and how we measure success. You can't wait on your firm. Measuring production tells you absolutely nothing. You have no documentation as to why you achieved those numbers. Consequently, you also have no indicators that will help you adjust and improve the next quarter. Production is worthless as a measurement. There is a better way.
Set up a Metrics Scorecard to give you measurements that are the real indicators of future success. Those indicators include things such as:
Bringing in a specific number of new ideal clients,
Upgrading a specific number of existing clients to ideal clients,
Bringing in a certain amount of new money,
Developing a certain amount of fee business,
Having a specific number of ideal prospects in your pipeline, and
Producing a specific production number that is a reasonable expectation resulting from the other indicators.
If you tie these benchmarks into a series of specific activities for which you are held accountable, your business will grow significantly.
Developing Your Parabroker
Adhering to my assumption that you are targeting affluent investors and working to become a multidimensional financial adviser, you will not succeed without upgrading the role of your parabroker.
Can you envision a day when your former sales assistant is a CFP, compiling sophisticated financial plans to present to your ideal clients? How will you close the gap between where your parabroker is now and where he or she needs to be? The times they are a-changin', so you must change how you benchmark and measure success in the performance of your parabroker.
Matt Oechsli is president of The Oechsli Institute in Greensboro, N.C., a sales consulting firm, and author of “Winning the Inner Game of Selling.” He can be reached at Matt@Oechsli.com.