Are You Building Leaders, or Just Better Followers?

SUMMARY

As advisory firms grow, they inevitably reach a point where success is no longer defined by the capabilities of a single individual, but by the strength of the people surrounding them. What begins as a practice built on technical expertise, client relationships, and personal production eventually evolves into something far more complex. At that stage, growth is no longer constrained by knowledge or skill, but by leadership capacity. This episode of The Rare Advisor explores that pivotal transition and challenges advisors to rethink not just what they are building, but who they are building.

The conversation builds on a progression of leadership concepts, beginning with delegating responsibility instead of tasks and creating environments where ownership can flourish. However, the discussion moves beyond ownership to a deeper and more strategic question: who within the organization is being developed to lead? For many firms, this represents a significant blind spot. Talent may exist, and individuals may demonstrate strong performance, but performance alone does not equate to leadership readiness. Without intentional development, even high-potential individuals may never evolve into capable leaders.

A key distinction emphasized throughout the conversation is the difference between followers and leaders. Many advisors, whether consciously or not, may prioritize creating more capable support structures—individuals who can execute tasks efficiently and reduce workload. While valuable, this does not build long-term capacity. Leaders think differently. They take ownership of outcomes, influence others, make decisions independently, and ultimately help expand the organization’s ability to grow. The shift from building support to building leaders is central to sustaining a firm’s future.

One of the most important insights is that leadership does not develop naturally through time or tenure. Longevity does not guarantee growth. Instead, leadership is the result of intentional exposure to meaningful experiences, guided coaching, and opportunities to make decisions. Advisors often assume that high performers or loyal team members will eventually “figure it out,” but without structure and development, that progression rarely happens. This creates a risk where firms believe they are preparing for the future, when in reality they are simply maintaining the present.

Another challenge highlighted is the frequent misidentification of leadership potential. Top performers, particularly strong producers, are often assumed to be natural leaders. However, the traits that drive individual success—focus, independence, and personal accountability—do not always translate to leading others. True leadership requires a broader perspective, including emotional awareness, the ability to unify teams, and a willingness to prioritize collective success over individual output. Recognizing this distinction is critical when identifying who to develop.

The episode introduces a practical framework for leadership development centered around four core experiences: ownership, influence, decision-making, and development of others. These experiences serve as the foundation for building leadership capability. Ownership moves individuals beyond task execution to outcome accountability, encouraging proactive thinking and problem-solving. Influence develops communication skills and the ability to guide others without relying on formal authority. Decision-making builds judgment, allowing individuals to navigate ambiguity and make confident choices within defined boundaries. Finally, development of others completes the cycle, as leadership multiplies when individuals begin to elevate those around them.

Central to this framework is the concept of judgment. Leadership is not about having all the answers, but about making thoughtful decisions in complex situations where there is no perfect solution. Developing judgment requires more than observation; it demands participation. Team members must be allowed to engage in real decisions, reflect on outcomes, and learn from both successes and mistakes. Advisors who continually position themselves as the “answer key” limit this process, unintentionally creating dependency within their teams.

The importance of environment also plays a recurring role. Leaders must create spaces where experimentation is encouraged, mistakes are treated as learning opportunities, and communication is open. Without this environment, individuals may hesitate to take initiative or avoid stepping into leadership roles altogether. Empowerment, in this context, becomes a critical driver. When individuals feel trusted and supported, they are far more likely to grow into their potential.

Retention emerges as another important outcome of leadership development. High-performing and ambitious team members, particularly next-generation advisors, seek growth, challenge, and a clear career path. When these elements are absent, they often look elsewhere for opportunities. By investing in leadership development early, firms not only strengthen their internal capabilities but also improve their ability to retain top talent.

Ultimately, the conversation leads to a broader strategic realization. Leadership development is not just a management function; it is a core component of firm strategy. Firms that remain dependent on a single leader—even if they are highly successful—face limitations in scalability, sustainability, and long-term value. In contrast, firms that cultivate leadership at multiple levels create resilience, adaptability, and continuity.

A simple but powerful test is introduced to evaluate leadership effectiveness: what would happen if the lead advisor stepped away? If progress stalls or decisions are delayed, it reveals a dependency-driven structure. If the organization continues to function effectively, it indicates a leadership-enabled environment. This distinction underscores the ultimate goal of leadership—not to be indispensable, but to create systems and people that can succeed independently.

The episode concludes with a call to action. Advisors are encouraged to look within their existing teams and identify individuals who may have leadership potential, even if it is not immediately obvious. Leadership often emerges in those who demonstrate initiative, communicate effectively, and show a desire to elevate others. By providing the right experiences and support, advisors can begin developing these individuals before the need becomes urgent.

In the end, the future of an advisory firm is not defined solely by its client base, assets under management, or revenue growth. It is defined by the strength of its people and the leaders it produces. Great leaders do not simply build successful businesses—they build other leaders who carry the vision forward. And it is through that multiplication of leadership that firms achieve true continuity, growth, and long-term impact.

TRANSCRIPT

Aaron Grady, Advisor Consulting Director at USA Financial - Welcome back to another episode of the Rare Advisor, where we help financial professionals create recurring and repeatable events that deepen relationships, elevate the client experience, and build referable practices. I'm your host, Aaron Grady, and with me again today is Steve Phillips, Chief Practice Management and Development Officer at USA Financial, and Alan Oehrlein, Practice Management Consultant at USA Financial. Gentlemen, thank you so much for joining me. I know this is not the first time you've been part of the Rare Advisor. You've been co host with me many, many times, but I felt this was a topic that I thought it was important to bring all of us together. So I appreciate you both taking time to be here.

Steve Phillips - Fantastic. Thanks for having us.

Allan Oehrlein - Absolutely.

Aaron Grady - so to kind of bring the audience up to speed, over the last few episodes, we've been talking about and walking through a progression that over time every growing advisory firm is eventually gonna have to face. And in the first episode, we talked about delegating responsibility instead of delegating tasks. So the idea of not just handing off activity, but creating ownership of outcomes.

We then talked about creating the environment where ownership can truly thrive. Because understand, ownership doesn't just happen because you assign it. It happens when people understand the vision, they know the boundaries, and they're trusted enough to step into greater responsibility. But today we're gonna we're gonna add a layer deeper into this conversation. We're gonna we're gonna talk about how growing firms, how they don't just need people who can own outcomes.

Eventually they need people who can lead, people who can influence others, people who can make decisions, people who can help carry the culture, the standards, the client experience, and the vision of the firm forward. And so the question for today that we're really going to focus on addressing is who are you developing in your team? Or I guess the other way to say it is who are you developing before your firm needs them to lead?

Allan Oehrlein - And I'll tell you that's such an important distinction. this isn't this not only a succession conversation to have. it's not just about who takes over someday. It's also about whether your firm is building leadership capacity right now. Because if leadership only lives in the founder or within the lead advisor or a senior person, the firm may be a bit more fragile than it actually appears.

Aaron Grady - You know, I that's a that's a great point, Alan. and look, this means a lot in a different a lot of different ways, but understand that this matters for succession, but it also matters long before succession ever plays a part. This matters for growth, this matters for team retention, for client experience, for increasing enterprise value, and for next-gen advisor development, which we spent a lot of time talking about as of late.

Today, though, we're talking about developing future leaders inside your firm and why the future of your firm depends on who you develop today. So when when we think about it, most advisors think about the future of their firm. They often think about it, think about it in terms of the numbers, right? They talk about I need more clients or more AUM or more revenue, maybe more referrals, or as we would say,

more introductions, better margins, a higher valuation of the practice, and understand: look, all of that is important. But at some point, the future of the firm becomes less about what the founder or the lead advisor can personally produce, and more about what the people around them are capable of carrying. Let me say that again. At some point, the future of the firm becomes less about what the founder or lead advisor can personally produce.

and more about what the people around them are capable of carrying. Because look, that's where leadership development becomes more than a management topic, it becomes a firm strategy.

Allan Oehrlein - And honestly, I think that's where a lot of advisory firms, you know, unintentionally get stuck. You know, they may have talented people. They might have a very promising next gen advisor and a waiting in the wings. or they might have a really strong operational or operations leader. they may have a service team member who's consistently doing more and showing some great initiative, but talent and leadership are not the same thing. Right? Potential and development are not the same thing.

Aaron Grady - Mm-hmm.

Allan Oehrlein - And just 'cause you're giving someone more work, it's not the same as preparing them to lead eventually at some point.

Aaron Grady - And and that's exactly right. Look, a a lot of firms see potential and assume time will turn that person into a leader. But leadership usually doesn't develop by accident. It develops through intentionality, it develops through in excess experiences, coaching, feedback, decision-making opportunities, and most importantly mentorship. if if no one inside the organization is becoming more capable, more confident, more decisive and more prepared to lead then the firm may not be building the future it thinks it's building.

Allan Oehrlein - And this is why that

Steve Phillips - You know, I might jump in here guys for a second. I, in the first, in the first couple of minutes, there's, I knew this was going to be just a phenomenal topic, but there's so much to unpack already. Just listening to some of the really keen observations that you both make. We talked about ownership and leadership. could also, there's a huge discrepancy between managing and leading. And so I think that there are, you see that happen in a lot of firms and certainly we've,

Aaron Grady - Yeah, absolutely.

Steve Phillips - We've had that experience. I've had that experience. People that manage don't necessarily become good leaders. The idea of owners and here's it and you talk about intentionality, Aaron, and I would use the word organic and we might get into that in a little bit. I have this sort of deep seated belief that leaders recognize leaders. It's hard.

There's so many incredible owners and builders that we have had the privilege to work with over the years. Few of them I would call great leaders in the definition that we're talking about. How do they empower others? And the other thing I would say about, and we'll get into more than just empowering other people, the other thing I would say about leadership compared to the typical succession of the firm who's going to take over when the builder and owner steps aside is that the leadership

growth track is quite a bit longer. I think there's a lot more to consider. I think there are a lot more experiences that have to happen. Aaron, also mentioned, gosh, revenues and introductions and the sort of the standards of what are the key components of KPIs, if you will. I think there's a lot more that goes into leadership. I think there more people capable of managing to all of those things that you mentioned.

without having the ability to lead people. And I think that we're gonna get deeper into that conversation. So it's longer, it's a longer track, I think, than managing. It's a different track than ownership. And I think there are very specific personality components to it.

Aaron Grady - I agree wholeheartedly. And and Alan, you know, kind of piggybacking off what Steve said, I know you believe strongly in how the next gen component fits into this conversation.

Steve Phillips - Thanks.

Allan Oehrlein - A hundred percent. And that's why always considering that next gen angle is is so very important, right? Younger advisors, they don't just need more exposure, they need development, right? They need a path. They need to have those opportunities to contribute in very meaningful ways. And honestly, if they don't see that path, which again we've all seen numerous times, if they don't see that specific path for them, eventually they may start wondering whether they need to find it somewhere else.

Steve Phillips - Well, here's another thing. Can I jump in again? This has been our experience on the protocol team and prior even to USA Financial. The people that you're speaking about, are not looking most times to be leaders. You're talking about next gen and we can think of some of these young bucks that are coming up that want to generate revenue and perhaps they do want to become the owner. That is a whole different thing. And it's something that we're going to get into because

If you take some of the owners that we work with, some of the builders, they are, none of them that I think we're working with currently are specifically, there's maybe one or two I can think of, specifically asking us, how do I find and develop a leader? They're after next gen and.

And I think that we all know their version of next gen is who is that person that's gonna take over for me and be the rainmaker and do those types of things. Huge difference, huge difference. No one is out there going, you know what? I think I wanna find this younger person, this up and coming generation person and mold them into leadership. That's a dramatically different thing.

Aaron Grady - Yeah, I agree. I think you know and we're and we're gonna talk more about this today. And actually it kinda led into a com a question I was gonna ask you, Steve, specifically from your point of view. you know, the idea of it's it's not just about

Having people on your team that may have already raised their hand or maybe they've identified themselves as wanting to be a leader, but being able to see that leadership potential in others that may not already see it. So I think that's an important distinction. You know, so so as we continue our conversation today, one of the things we're gonna do to help create some practical framework around this is we're gonna talk about five key leadership shifts that advisory firms need to make if they really want to develop future leaders.

And the a the here's a key word here or key phrase, before they need them. and I think that's a distinction. You know, if we're waiting until we get to the back end when all of a sudden now I need a leader in place, now we're chasing. And so I appreciate you joining us today for this conversation, Steve, because I know you've spent, you know, a big part of your career leading, mentoring, and developing people in eat at the broker at the brokerage firm level, you know, at the team level. you've run organizations and so you've spent a lot of time in this. And so kind of

Allan Oehrlein - No.

Steve Phillips - Thank

Aaron Grady - You know, would there be anything you would add if I so you know you've already kind of touched on this already, but I still want to kind of frame the question. You know, before we get into the actual framework, when you hear the phrase the future of your firm depends on who you develop today, you know, what does that bring to mind from your leadership experience?

Steve Phillips - When you had shared that with me, the words I wrote down was that's absolutely the truth. because, and this is what we're, I think that this is something that we're trying to do through protocol team and again, separating next gen from leadership. But I think that the whole idea of the future of your firm depends on who you develop today.

And it could be circumstantial for a lot of teams and a lot of owners or current leaders is that there's a time component or there is a capacity component. Who are we going to hire? The next-gen rainmaker or somebody that can sort of oversee everything that's going on and have some influence in all corners of the building? That to me describes more of a leader than it does the next-gen next advisor. But to your point.

Aaron Grady - Yeah.

Steve Phillips - G, it's that develop both. And yes, and I do think the leadership thing is a longer track. I can teach, I can take my next gen, I'm the rainmaker, I've been generating sales and revenue and bringing on new clients for years and years and years. I think all of us agree, especially with the coaching that we do, that those are tangible processes in a lot of instances. Leadership tends to be a little bit more intangible and sort of philosophical.

Aaron Grady - Yeah.

Steve Phillips - It demands a real connection to people, emotionally, philosophically, level of maturity, all those types of things. And so I think it would be fair to say that it's for that reason, it's a longer track.

Aaron Grady - I love it. And I think that's a great setup. because I think it leads directly into the first shift, advisory practice shift that we're gonna talk about. You know, you said it, you know, most successful advisors know how to build a practice, right? They they've built trust with client relationships, they've built revenue, trust, systems, they've built a team out. But eventually the question changes, it's no longer just what am I building? It becomes who am I building? And so the first leadership shift I would say in kind of the framework that Alan and I were laying out was shifting your mindset from building a practice to building leadership capacity

Steve Phillips - Yeah.

Aaron Grady - Inside of your organization. You know, most advisors spend years building the practice. You know, as we said, they build the client relationships, they build referral networks, they build planning processes. You mentioned that, Steve. You know, they built the service model, they've developed their team. Ultimately, they're increasing the enterprise value.

And and that all that work matters. It's very foundational, it's important. But eventually the practice reaches a point where the founder or the lead advisor can't be the only source of leadership. Not because they're doing anything wrong. And I think that's the key thing here, too, is it's not because they're doing something wrong, it's because the business has become too complex, too valuable, too important, too dependent on one person's judgment, energy. And and Alan, you and I talked about this. This is the word that I would circle on the page. Availability.

Steve Phillips - No question.

Allan Oehrlein - Yeah.

Aaron Grady -This is the moment leadership capacity becomes critical.

Allan Oehrlein - And remember leadership capacity is is very different than staffing capacity, right? A firm can they can hire more people and still not have more leadership. You know, they can add a servicing advisor, they can add a paraplane or a CSA, and still every meaningful decision comes back to that lead advisor, right? So the question is not just do we have enough people, the better question is are we developing people who can think, who can decide and influence and ultimately lead?

Aaron Grady - Mm-hmm.

Steve Phillips - Yeah.

Steve Phillips - You know something, going going to, I, this just hit me and I don't, I don't want, this is not going to change the track, but I just, I just was thinking of all the people that I have been privileged to work with, the people that have contributed to my leadership growth. And as I seek to find future leaders and that kind of thing, if we went to all the advisor teams that we work with, which are many right now, I think it would be interesting. Number one,

to ask them define leadership. And what they would, most of them would say, the answers would be managing or selling or owning. It wouldn't be, and so, and this is probably down in the conversation, but I just wrote it down and I don't want to forget it. If you asked me, and the two of you are working with me currently and we're working with the teams, a lot of different teams, I think leadership is,

is everything but the tangibles. It's everything but the numbers and generating the revenue and all the things that management and different roles demand. I think the things that I focus on in leadership are the emotional capacity and the emotional standard and where we are emotionally as a team, especially with the way the industry has been up and down and up and down.

Are we all philosophically on the same page? Do we recognize each other's strengths sometimes? Not at the detriment, but recognizing that someone has a better strength than me. All of the things that I have been focusing on for a number of years in leadership has, the outcome is the numbers. Everybody's a part of that. Everybody's a part of growing the organization and performing. But I think what's lost is if that is the focus,

Steve Phillips - there'd be no leadership and there'd be no future to the organization. It's a very emotional, philosophical approach to people. That's what leadership is and it's empowering people. you don't, numbers and revenue and success is the outcome of empowering people emotionally and philosophically. So.

Allan Oehrlein - Mm.

Aaron Grady - Well, and and I I agree with you, Steve. I agree where you're going with that. And and I think kind of you you and Alan have touched on two halves of or two sides of one coin. And something that we've all revealed as we've done some complete consulting session with complete teams, when we start talking about the word capacity. And what do we start this this conversation with you know eventually comes a a capacity where the elite advisor can only do so much. Everything runs through the lead advisor. There's a bottleneck there. And so you're talking about the identification of it.

But

And Alan, you're talking to the other side of it. And I think I think there's a distinction here that we've we've identified when we've had these conversations with advisors. You know, here's the hard truth. Many advisors, when they say they want future leaders, what they really mean in their mind is they want more capable followers. They want someone who can execute what they tell them to do. They want someone who can support their efforts. They want someone who can take the work off their plate. How many times have we had that conversation? You know, someone who can make the advisor's life easier.

Allan Oehrlein - Mm.

Steve Phillips - Yeah, yeah, right.

Aaron Grady - And there's nothing wrong with needing help inside of an organization, but at the same time, it's not the same as leadership development. A follower can help you carry the workload. A leader helps you carry the vision. A follower completes assignments, a leader builds capacity. A follower, this is the big one, a follower waits for direction. Leaders learn how to create direction for others. And you know, the work we've done, Steve and Alan, is when advisors are saying, well, you know, I I need to hire that next next gen advisor for this. Well, sometimes it goes the other direction. Sometimes we identify that maybe it is just a support staff member.

Allan Oehrlein - Mm-hmm.

Aaron Grady - And and maybe that's the short term need. But what we're what the conversation we're having today is a lot talking about the long-term strategic vision of the practice. That if you don't ever put your focus towards developing some of those people into leaders, eventually you're just creating another bottleneck because everything's still gonna run through you.

Steve Phillips - Yeah. You know what I think too, gee, this is the thing. think it's possible that some organizations never need leadership the way I'm defining it. If this is an organization of three people and the roles are very clear and somebody is going to take over for that owner and builder, but it's gonna remain two or three people, I think that you probably.

Allan Oehrlein - Mm.

Steve Phillips - in a small organization like that, everybody has to be doing the tangible stuff, the day to day. And I think there's some leadership qualities perhaps that show up. I'm sure I say perhaps, but I'm sure that they do. But it's less of a, I don't think a two person or three person organization is like, where's the next leader coming from? It is the successor, it is the tangible, it is the numbers and that kind of thing. And I think that that's a relevant distinction between the two.

Aaron Grady - Yeah.

Allan Oehrlein - Mm-hmm.

Aaron Grady - I agree. I agree. now, Alan, you and I had this conversation before the call when we were talking about some of the conversations we've had with advisors who start pivoting their focus from okay, instead of just hiring another CSA, or maybe I've got an ops person, or maybe I've got someone that's a paraplanner or a support advisor, but maybe

Allan Oehrlein - Mm-hmm.

Aaron Grady - I really need to start giving them more responsibility inside of the organization, how it creates a bit of an uncomfortable feeling.

Allan Oehrlein - Mm-hmm. Yeah, and when you're looking to sort of create that new direction for people with within your firm, it can be an uncomfortable conversation, especially for the lead advisor slash owner, right? because if you're really developing a leader, that person may not always do things exactly the way you would want to do them, right? They they challenge your thinking. they may offer a different perspective, they may influence others, they may make decisions inside those boundaries that you've set.

but not always in the exact style that you would have chosen, right? that's the part of the transition from building people who support you to building the people who can essentially lead with you at that same point.

Aaron Grady - Well, and and relative to as we talk through the lens of next gen advisors, and I know Steve, you'd mentioned succession, which is is part of this conversation. Look, you know, for advisory, and we're gonna touch on it again later, but for advisory teams that are twenty-five years out from a succession event, it's more about developing the next gen. For advisory teams that are ten, five, you know, five, ten years out from a succession event, it's more about we need true leadership for the sake of

operating the practice. But through the lens of the next gen, we've had real life conversations with advisors who never want to give true authority or responsibility because they're afraid to let people have a different point of view. It's either my way or the highway. And and I think that's a that's a narrow focus and a narrow way to think of things. And so, you know, this is why next gen development has to be more than just shadowing meetings and learning the planning software. Look, that's a starting point and those things matter.

Steve Phillips - Yeah.

Aaron Grady - But if you're a young advisor, it it's if it's only learning how you do things, they may become technically competent without becoming leadership capable. Because look, leadership capacity requires exposure to trade-offs, decisions, client dynamics, team tension, accountability, communication. It requires moments.

Aaron Grady - Where they have to think, not just observe your modeling of what they're supposed to do. And so this is where I I pull you back in on this, Steve, because I know you you feel strongly about this. So where do you see organizations confuse high performing followers? You know, the ones that can you know really rain make in this example we're talking about next gen?

with true future leaders. And then the second part of the question would be is and what should advisors watch for when trying to identify true or real leader potential?

Steve Phillips - Yeah, it's a really, really good question. And it is the classic mistake. And I have made it several times. your, your hall of fame players can't coach. This is the number one, the number one mistake. Magic Johnson, probably top 50 all time NBA probably considered by many of the top 15. I think he coached for three weeks. Um, he couldn't coach wasn't his thing, but Larry Bird, I can go on and on and on. Um,

The mistake is, gee, you and I go way back. I've made those mistakes. if the best recruiter that we have, I should have that person lead a team. If our best salesperson could just lead a team and then communicate those skills, those people are wired a different way. And that's the other thing about leadership. You make mistakes along the way, which is fine. I don't think you can afford to make the same mistakes twice.

And that was a brutal lesson. And as I have worked with advisors, I tell them, you're not, your best producer is never going to lead. They are selfish people in a really good way. I don't mean that like, that's a broken personality trait. It's not. They're very focused on their tasks, their accomplishments, all of that. And you sort of have to be. You're not going to be the best recruiter or the best sales producer or any of that.

if you're worried about the whole other team around you. And the other thing that I had jotted down when Alan was making some comments, here's what I think leadership is, it's roping it all together. It's roping it all together. don't think, I mean, I don't know that I've ever really been good at anything inside the building, but the ability to see and understand what each corner of the building is doing and then trying to get those different teams.

to philosophically get on board the same thing, your role's different, we're all pulling the same way, that's a whole different thing. A whole different thing. If you're listening to this and you're thinking, oh my killer salesperson is gonna be a leader, not so much. Not so much. I have never seen it work.

Allan Oehrlein - Mm-hmm.

Steve Phillips - I think that was the second part of the question I was supposed to answer in this.

Aaron Grady - Yeah, yeah.

Allan Oehrlein - Mm-hmm.

Aaron Grady - I mean, this I think you touched on the second half of it. The second part of the question was just, you know, what should advisors watch for when they wanna when they're trying to identify true or real leadership potential. So instead of just saying picking the the brightest apple off the tree, which I would temper and I know you feel strongly about it, Steve, I would say it's more often than not that your top performer is not going to be able to fulfill that role. But look.

Where were most of these big successful firms built to begin with? For an advisor who was killing it out there and then they started developing talent because they couldn't do it all by themselves. So it's not saying it can't. It's just our experience says that it's usually not the the one that you usually get. But so the other half of the question was really just, okay, so if I'm if I'm looking for things to look for to identify leadership, are there any things that stand out to you?

Steve Phillips - Yeah, I think awareness of what's going on in the entire company. And most salespeople aren't that way. And so I need those people. And we think of the structure that we have now, and gee, we go back 20 plus years together. was, there are people that I need to have them 100 % focused on their role. It's that important. There are others that I need to understand kind of what's going on in all the different corners.

because that whole, I really believe that leadership is emotional capacity and philosophical capacity. And I think that that's also what tears companies apart that are on the verge of success is that there is, I don't want to say it's infighting, but there's, know, the support teams are doing all the work, the sales teams are just, you know, doing their thing. There has to be somebody that recognizes the significance, importance.

Emotional and philosophical components of every different department and find a way to bring that together I don't I don't hate my biggest producers for being solely focused. That's what they have to do The other thing is we don't ask questions I think it's sort of organically. Do you have you ever thought about leadership not managing? Have you ever thought about leadership? I don't you know, and this is something we were going to get to but I think Leaders

tend to recognize other leaders. And I don't remember the moment that I've had several good mentors in my career. I don't remember the moment where I thought, I think I could be a leader. The thing I would say is that recognizing things in people that they don't yet see in themselves is a gigantic step to not only being a good leader, but finding other leaders.

Aaron Grady - That's great.

Steve Phillips - And I have sort of focused on that my entire career. And oftentimes it's emotional how they feel about the role and what they want to do and the philosophical approach of binding things together. And there's a little sense of maturity ahead of their time. It's that kind of thing. But I'm sure there are great books out there that do all the specifics and stuff where my leadership has been more intuitional. And in that way, I recognize others that can lead.

And then you got to put him in the position and empower empower him and let him run and let him make the mistakes that I'm crashing to the wall all those things

Aaron Grady - Well I Yeah, I mean And and that's something we're gonna talk about for sure is creating the right environment for that. And we and we covered some of that in our last episode where we talked about creating an an a an environment that that you know allows for this kind of ownership and growth. I think for Alan and I, you know, when we talk about leadership potential in trying to identify it in key staff members, you know, they're simple things. It's the ideas of do they take initiative, are they coachable, do they communicate well?

Steve Phillips - Yes.

Aaron Grady - Do can they influence their peers? do they have any kind of decision-making ability or do they rely solely on you for every decision? And, you know, there's some of that selflessness, the ability to or desire to elevate others. You know, it's not which which is the thing that runs kind of counter sometimes when you talk about top sales performers who it it's it's all about me a lot of times, but when you have a a leader, it's also like like you say, Steve, you've said often is like it's you wanna see you wanna develop others.

Allan Oehrlein - Right.

Aaron Grady - see other people continue to grow. And I know, I know Alan, that's that's a key thing that you have those conversations with advisory teams specifically when you're trying to help them understand who might be a a good candidate.

Steve Phillips - Yeah, yep, yep.

Allan Oehrlein - absolutely. And you consistently have to remind them as you're having that conversation, right? That that distinction between performance and leadership potential is important. because you know, even when someone does have that potential, it doesn't automatically mean, like Steve was saying, that they have that leadership capability. Right? A lot of firms assume that if someone's again talented, loyal, around long enough, that leadership will eventually emerge and present itself, right? But that's not a development strategy at all.

Aaron Grady - Yeah. I love the thought that longevity does not translate into leadership. I've seen that I've seen that a bunch. well, yeah, they got tenure. Let's just go ahead and let's go ahead and let them them lead. The military doesn't do it that way. in fact, military actually, because I have lots of friends who are in the military, it's actually the opposite. If you've been around for a long time and haven't been promoted, they start pushing you out because you've not shown Yes, that that you're broken. So so this brings us kind of to our next

Steve Phillips - Hahaha. True. Yeah.

Allan Oehrlein - Right.

Steve Phillips - Yeah. Yeah.

Allan Oehrlein - Yeah, they think they think what's wrong with them. Yeah. Yeah.

Aaron Grady - you know, leadership shift as we talk about it. You know, we have to stop assuming that potential is going to develop on its own. And, you know, the key word that we always use in our coaching is you need to start being intentional. That's the key word, about how we develop leadership. And so the so the next leadership shift is the idea shift from assuming potential to intentionally developing it. You know, one of the biggest myths

Steve Phillips - Right.

Aaron Grady - in teaching leadership is that the right people will naturally rise to the top. And sometimes they do. Look, they sometimes you close your eyes and poof, there they are. Or you've identified them and you put them in, you know, kind of in a spot and they just they just develop on their own. And and good for you if that happens. But more often not, people rise to the level of the opportunities, coaching, feedback, and development that they're given. So you know that's a big belief you have, Steve, about people rise to the moment and you got to put them in the right moments. And and you know it's the the whole idea of how do you make a diamond, you know, heat and

Steve Phillips - Fair. Yeah. Yeah.

Aaron Grady - Pressure, you know, they take a lump of coal. So you got to put them in an environment to grow people. You know, potential is is not the same thing as development, though. And so an example is a talented next-gen advisor may never become a leader if they are never asked to do something or to sit second chair in and in a client meeting. You know, a strong operations person may never become a strategic leader if they're only rewarded for getting things done quietly behind the scenes.

Steve Phillips - Yeah.

Aaron Grady - a loyal team member may never learn how to influence others if they're never asked to lead a discussion, coordinate an initiative, or coach someone else. Not because they lack the ability, it's because no one's been intentionally developing their abilities.

Allan Oehrlein - Mm-hmm. And I'll tell you advisory firms are especially vulnerable because this type of advancement often happens through performance, right? They're doing well, so let's let's move them up the chain, right? The advisor who brings in the business typically gets elevated. We've seen it countless times. The technically strong paraplanner gets more responsibility in some scenarios, or the person who fixes problems becomes the default manager. the person who knows the systems becomes the operational leader, but

Steve Phillips - Thank

Allan Oehrlein - Being great at the work isn't again not the same as being prepared to lead the work.

Aaron Grady - It and look, I also understand that some of this, as Steve, you mentioned this earlier, is out of necessity, especially as teams are starting to grow from the ground up, and you may have an advisor and and one assistant and everybody's you know chief and cook, you know, chief cook and and bottle washer all at the same time. I understand that. Necessity breeds some of that, but as teams continue to grow and develop.

Aaron Grady - There comes a point where you need to stop being generalists and become specialists. And then again, as we start moving forward, the ability to start developing true leadership, not because there's no one else to do the job, but because you're building with purpose and intentionality. And so understand, technical competency may get someone notice.

Steve Phillips - Yeah.

Aaron Grady - Leadership competency determines whether they can succeed at the next level. And and this is where firms can accidentally set people up to struggle. And I know Steve, you you can weigh in on this too. Because they look, they they promote someone because they're capable and then they assume leadership will come naturally, but leadership n rarely develops through assumptions. It develops through exposure, coaching, feedback, and ultimately through reflection, which is that mentorship aspect that comes as part of this as well.

Steve Phillips - Great observation. Yeah. You know, I think that the more we have this conversation, the more I leadership really is about, I guess you would call vision a tangible thing, but I think of where I've been part of teams have had a lot of department leaders. We go back to all of that. It's true in a lot of companies and it's true in big advisory firms where you have people that are in charge of a team and in charge of a department.

but there's somebody else in the organization that is communicating a vision for all of those people. So I mentioned earlier that I think it's a bit intangible and I think that it is. I think you were going someplace, G, where it's, know, that organizations assume that people pick this up naturally as a leader. I can tell you one of the key components for leadership, I think, is the ability for a leader to remove themselves from the equation. What do I mean by that?

Allan Oehrlein - Mm-hmm.

Steve Phillips - I mean, remove yourself from the day-to-day business and influencing where you have to, but leaders, typically it's not about them. Now think about that for a minute. Most every role has a component that is about them. And I'm sure with leaders get paid and there's a future and all those types of things, but I think leaders have to really remove themselves from the immediate equation and be aware of what's going on.

Aaron Grady - Mm-hmm.

Steve Phillips - on these many teams. And I think that that's difficult. I think of the people that I have been lucky to surround myself with and people that I've helped grow into different things, all of them have passed me by in what they do and how successful they've been. And I think that's part of the component. See things in people they can't yet see in themselves. Make sure that you put them in the right position.

If a leader, as a leader, if I promote you, Alan, into some role that you cannot or will not do and you fail, that's on me. Leadership has to ask those questions. Leadership has to see that that's part of the vision. And I think I just sort of wrote this down a moment ago, removing themselves from the equation is key. That does not mean removing themselves from what's going on in the organization and having influence. But the vision that I have, the decisions that I make are

all about other people, other departments and bringing that all together. You might summarize leadership by saying it's the person that ties the knot, especially in a big organization. You got sales, you got ops, you got new business, you've got recruiting, you've got marketing, you got all this. Who ties all that together? That's leadership.

Allan Oehrlein - Mm-hmm.

Aaron Grady - It's a great point, Steve. And and as we get a little farther in this and as we get to a couple of the other shifts that we're gonna talk about, when we start laying out kind of a framework, there's an element of that of kind of stepping back and letting people grow that I think is important. So I think that's a good distinction. You know, Alan, I'll throw this question to you. You know, how do you think this idea of shifting your focus, how does this and this concept of developing leadership, how does it play into retention?

Steve Phillips - Thanks.

Allan Oehrlein - it's a huge component. it's it's something that everyone needs to be aware of and again keep front of mind. just think through there's a lot of young advisors that are that are hungry for opportunity and challenge, right? They they want a path. they want to know that there's a future for them. They want to continue to grow. But again, if the path is basically and we we mentioned this a bit earlier, if the path is, hey, wait your turn or just keep doing what you're doing.

Aaron Grady - Mm-hmm.

Allan Oehrlein - Eventually that becomes frustrating and they start to get, you know, wandering eyes and considering what else might be out there for

Aaron Grady - Yeah, that's a big point. The the whole just keep doing what you're doing. Eventually you're gonna get an opportunity. Look, a next a next gen advisor, it's not always about needing more compensation, and don't get me wrong, compensation is important, but they need development. I mean they wanna see a clear path to greater contribution inside of the organization. They they need clarity around what leadership looks like to them inside the firm, and they need to know what capabilities they're expected to build. This is you know, this is why one of the things that

We do and we've done with teams is to build, you know, kind of career tracks because now they can have clear line of sight to if I do X, then Y, then Z, this is how my development into potential ownership or leadership. And maybe there is never an ownership path, maybe there's never an equity path, but maybe there is a leadership, maybe senior, you know, maybe a partnership. But

Steve Phillips - Yeah.

Aaron Grady - Understanding what that looks like and then providing needed feedback and then opportunities to take those developmental steps.

They need someone to invest in them before they're fully ready because you don't want to wait until someone is ready to give their them leadership experience because leadership experiences are what help them become ready. So you you c you can't you can't wait to last minute because as you've g as you said too earlier that you wait too long and they may go look for it elsewhere. And so Steve, kind of back to you, and we've had this conversation that we've seen this honestly, we've seen this happen in teams.

Steve Phillips - Yeah, yeah.

Aaron Grady - You know, live fire, you know, what leadership skills do organizations often assume people will just pick up naturally? Kind of going back to where we started this conversation. But actually require coaching and mentoring and intentional development. What skills would you say you really need to focus on helping people develop?

Steve Phillips - Yeah. Yeah. I think so what I said earlier about removing yourself from the equation that I can I can get a little bit more specific. I think that leaders don't ride the ups and downs. I think that that and then in our industry and in our business, it's really about the ups and let's let's generate revenue and new clients and introductions and all the things that we coach to and all the things that all of our firms have been a part of. And I think that

Leaders tend to be, and I say less emotional, I'm very much emotional on my sleeve type of guy a lot, and a lot of the people that I've had the privilege to lead and work with, you guys, can see that. But I don't think that leaders really ride the wave. I think it's important that there's, when we're rolling along, that there's gonna be, if we crest the wave and come down a little bit.

We're not overjoyed by the growth. Everybody participates at, and it's a good thing. But I think avoiding panic and making short-term decisions based on short-term situations is something that organizations miss. And good leaders don't react to that kind of thing. And gee, think of the stuff that we have been through in previous lives and previous organizations. And there was a lot of sky falling.

at times if you ask around. I think that even you, nothing is the end of the world. That's what a good leader provides is stability no matter what the situation is. And this is the other thing why I think respect to the builders and the owners. And we know some builders and owners that have some really strong next gen and perhaps leadership coming up behind them.

Aaron Grady - Mm-hmm.

Steve Phillips - And there become these strong debates. If you're not doing it the way I'm doing it, or if growth is not going the way I want it to go, or as fast as I want it to go, that just short circuits what leadership is about. It's a long term play. And it has to be less emotional, more visionary, and kind of patient. And I think that a lot of the roles that our business aren't geared toward that. It's go, go, go.

Aaron Grady - Mm-hmm.

Steve Phillips - What have you done for me lately? Great month last month, Alan. What do you got this month? Let's get after it. Don't make any mistakes, that kind of thing. And so the more we have the conversation, the more some of these words pop out. Leadership is very patient in waiting kind of for things to develop. And that doesn't mean just let the whole thing run amok or run into the ground, but you do have to give people an opportunity to grow into their own roles to maximize their performance and the success of the company.

So take yourself out of the equation, don't panic, have a sense of vision beyond the moment. I think that those are key elements of leadership.

Aaron Grady - So if if if I was gonna cherry pick out some intentional development things that maybe don't develop naturally on their own, that an a lead advisor would want to help have a hand in development for a team member, I think some easy ones have done a lot of this, conflict resolution. You know, people don't naturally know how to work with other team meds, especially when they don't communicate the same, you know.

Steve Phillips -Yep. Yep. Yep.

Aaron Grady - Teaching leadership, you know, how how to lead peers, how to make decisions, coaching others, handling pressure. You know, when when when now all of a sudden you have when the outcome is on your shoulders, the pressure's different. When you're just like, I gotta stay in my own lane, I think it's a different conversation. So I think this, I think this is a natural transition into kind of what we would lay out as kind of the next natural shift in mindset for an advisor as they're kind of starting to move towards developing leadership in their practice.

And look, if we're saying that leadership has to be developed developed intentionally, then we have to be very clear about what we're trying to develop. And so I just listed a few topics there. But this is where I think sometimes firms, and we've seen this, Steve, firms jump too quickly to authority. So there's a distinction here. They they give someone a title, a bigger role, and more responsibility, but

Steve Phillips - Yeah.

Aaron Grady - The foundation of leadership is not necessarily authority. It's not necessarily, hey, you got the title in the big seat and you got an office now. The first thing they need to develop before they get that spot is they need to learn judgment. And I think I think that's I think that's a big part of the that. So I say that the next shift that I would lay out personally in the leadership shift would be going from giving answers. This is the whole removing yourself from the equation, Steve, that you keep talking about. So remove yourself from giving answers to

Steve Phillips - Yep, yep, yep, yep.

Aaron Grady - Shifting to developing judgment. So allowing people to fail forward and make decisions. Because look, leadership is not primarily about a title. It's not about seniority. It's not even primarily about being the most knowledgeable person in the room. Because quite frankly, we know a lot of smart people that don't lead teams. They are an important part, but they're not necessarily the leaders. Leadership's about judgment. can this person evaluate a situation? Can they weigh the trade off trade-offs, the pros and cons?

Steve Phillips - Yeah.

Aaron Grady - Can they make thoughtful decisions when there's not a perfect answer? Which I mean, the military, I brought mentioned military earlier, that's one of the big things when they look for leadership is, you know, not having all of the clear picture, but you can make a decision and move forward. Can they balance client needs, team capacity, firm standards, and business reality? And can they decide when to escalate and when to act? You know, that's when it becomes true judgment. And

Steve Phillips - Yeah. You know, and I'll add two, I'll add two words to the really, that's really good stuff, G. I would add the word, and you mentioned it a moment ago, react. I think, I think a leader has to have the ability to not react right off the bat in the moment, because oftentimes the short-term reaction is emotional or whatever, and it clouds judgment. The other thing, honestly, as I'm thinking about the conversation you and Alan are generating here,

Allan Oehrlein - Mm-hmm.

Steve Phillips - is something that we've all said to each other and that I learned from Duncan years ago. And I thought this is a leadership thing, because it's something that I was not good at and I'm much better at now that's listening. know, Duncan used to say that the secret to my success is I listen for the purpose of understanding. You listen for the purpose of getting to your point. Now think about the differentiation there.

and what would be significant in a leader when you're talking about conflict resolution, you're talking about judgment, you're talking about influence. How do you influence people? You listen to their side of it. How do you resolve conflict? You listen to both sides of it. You know, mean, no organization has a vision that's just about me, the boss, it's about everybody. So the ability not to react and to listen,

definitely fosters good judgment.

Aaron Grady - I like that. That a listening is a key component of it. And and look, I think as part of that, 'cause kind of where we're going with that this shift is you can't be the answer. And and I know most firms this is what advisors wanna do is if you're constantly the answer

you're you're holding back the opportunity for your your leaders, for potential leaders, to develop and judgment and and judgment is what future leaders need the most. And and I think you would probably agree with that, Alan.

Allan Oehrlein - Mm-hmm.

Yeah, and I think that's especially relevant when you're considering advisory firms because there's so many situations that aren't gonna be completely black and white, right? Clients upset, planning case becomes more complicated than you expected, something as far as a team member being overloaded with work, client transitions not going as smoothly, or just something d along the same theme of next gen, they just they want more opportunity, right?

Client relationship needs to be handled very carefully, right? There's not always going to be a specific script to follow. So again, that's something that comes with experience.

Aaron Grady - I think that's I think that's a key thing. You know, w as we and you know, I know you and I are working on kind of retooling some of our next gen coaching track of developing next gen advisors. And one of the things we always talk about is building a framework and and shortening the learning curve for a next gen or a younger advisor by giving them a scripted process that they can follow.

But I think the key thing is what you're saying is, and you and you said it is there's not always a script when we're talking about judgment. And that's where you go from being just a next gen or someone in this position that maybe it's following the bouncing ball. I've I've I've we've got a documented process. Now they're they've gotta be able to think on their feet, they've gotta use their own judgment. And and that's why I think why leadership development can't simply be about teaching people the right answer.

Aaron Grady - It has to be about teaching people how to think and think on their feet. You know, because a future leader has to learn how to navigate ambiguity ambiguity. I know I struggle with that word every single time. and that only happens when we stop solving every problem for them. You know, we talk about the open door policy with advisors where you, you know, hey, every answer is always running through them. You know, advisors are trained problem solvers. That's what the job is about. Clients bring them problems, advisors solve them. And that's part of what makes advisors valuable. But at the same

Steve Phillips - Yep, well done. Yeah. Yeah. Yeah.

Aaron Grady - time that instinct that makes an advisor valuable to clients can limit the development of the team. So if if every team problem comes to you and you immediately solve it, you may feel helpful in the moment, but over time you become the answer key. And when you become the answer key, people stop developing on their own and they stop developing their own judgment, which is one of the big

Allan Oehrlein - Mm-hmm.

Steve Phillips - Correct, that's so well said, G. I can think of three people, I can think of three people right off the bat that we work with that have pretty good leadership coming up underneath them and they short circuit it by, made a bad decision, it's not what I would have done, I'm not happy with that, literally in those words, and that young person or that next person's not interested in leading under those circumstances.

Aaron Grady - Mm-hmm.

Aaron Grady - Yeah. Yeah. And and the the ability to fail forward is a key one. And we're gonna in a in a moment we're gonna talk about kind of a framework to kind of be in intentional about some of these elements. so before we before we kind of make that transition, I'll throw it to you, Alan. Is is there any additional out insight when we talk about judgment that you would you would share?

Allan Oehrlein - Mm-hmm.

Allan Oehrlein - Yeah, I think one thing to consider here is that the shift needs to switch from answering to coaching, right? Simplify it. Instead of here is what I would do, ask what options do you see? Or, you know, what would what would you recommend? What concerns you most? What decisions are you avoiding? You know, those questions slow the leader down, but they also speed up the development.

Aaron Grady - Yes. Okay. Perfect.

Steve Phillips - Nice.

Aaron Grady - I love it. I I love it. You know, I I I use the I've used with teams before the one three one method. So when you're developing leadership and you're even if you're not developing leadership, just teaching your team to expand their their mindset, you know, they bring problems to you instead of immediately coming to their their rescue.

Steve Phillips - Nice, really good observation.

Aaron Grady - Give them the one three one. Bring me one problem, but before you do, and you before you step in my office, come up with three possible solutions that you thought of, and then we'll work together to find the one that's the best possible to work with. So they're part of the process. This teaches them judgment. It teaches them to do a little some critical thinking, which is what you want from good leaders.

Steve Phillips - Yeah. Yeah.

Aaron Grady - And I think this connects directly to next-gen development. You know, if a young advisor is always watching the senior advisor make decisions, they may learn what the advisor does, but they may not learn how the advisor thinks. It's different. You know, a next-gen advisor can sit in a client meeting for two years and still not develop judgment if no one ever debriefs the meeting, explains the trade-offs, or asks what they would have done if they were in that situation. Look.

Allan Oehrlein - Right.

Aaron Grady - Judgment requires reflection, and this is kind of what we talk about on the mentorship side of this. It it requires repetition, it requires feedback.

Steve Phillips - Yeah, great word.

Aaron Grady - It requires the chance to make decisions progressively in bigger ways. And so, you know, you've waited on this a couple of times, but let me throw you this. So so can you share an example of someone that you've developed strong leadership judgment with over time? Or you've seen them develop strong leadership judgment? And then I guess maybe differently would be what experiences or coaching moments helped them move from needing every answer to being able to make decisions on their own? Do you have anything come to mind as far as someone you've seen develop into that kind of a role?

Where before they were you were the answer key and then they eventually become a good leader on their own? And do you kinda s could you see what led to them doing becoming that person?

Steve Phillips - Yeah, so I was looking at Alan, Alan's looking at me. like, so, yeah, I...

Allan Oehrlein - Yeah.

Aaron Grady - I mean an easy one is and you said it already is the idea the the ability to fail forward, to make mistakes, the the and providing real time feedback. Look, you you said it.

Aaron Grady - If if someone is so afraid to make a mistake because they're gonna be crushed by that, they're not gonna make it. They're they're gonna wait always for the answer. And so you you give them guardrails, you provide, and we talked about this in the last podcast episode, is you don't give them carte blanche, but you give people a framework that they can work inside of to make decisions in a safe space where they can learn from it. It you mentioned it earlier, what'd you say? you were used a word that Mike Walters used. if if they had good intentions.

Steve Phillips - Yes. Yeah. And so being able to make mistakes and some of the notes that I written down earlier is open, progressive and direct conversation. And think of that. So open conversation, a lot of listening, progressive, relevant, where are we? Where is this thing going? Allowing for the other side of the conversation. And then I have, it's been my experience that oftentimes if that is done over

a period of months, perhaps years, I think those leaders come to their own conclusions and start to recognize it. And I've been, so for the last, the reason I was sitting there when you were talking, I'm like, I think this is gonna be, I don't know if this is gonna be appropriate and appropriate, but one of the people that I would say I've had really good success with, I think is you. And because we think of all the time that we've spent

Steve Phillips - and you really have come to your own conclusions. And I think there were moments where, this is a personal thing, obviously talking about you and me, but challenging your thought processes, not because they were wrong, but because look at the other side and then come to me with a decision that has included those things. those, I mean, I think of the progressive conversations that we've had over the years. And I think eventually what happens is you have to embrace it in yourself.

Aaron Grady - Yeah.

Steve Phillips - I came to a point in my career where I wanted to be a leader and I didn't want it to be about me. I take a greater joy in empowering other people around me to reach their maximum potential and capabilities. And I think that you're one of those people. And over time, those conversations and all that kind of stuff reveals it from both sides.

Aaron Grady - well I I appreciate the the one, the insight and the kind words as well. you know, I think this kind of is is leading us to probably where we need to go go to for our next leadership shift. and

Alan, what would you say would be the next big thing if we're if we're gonna talk, if we're gonna kinda lead practices to the right, you know, d continue to develop leadership in a timely fashion, what would you say the next big leadership shift we should help them focus on?

Allan Oehrlein - Yeah.

Allan Oehrlein - So I'd say the direction it needs to go now would be advisors need something very practical, right? What's the next step? So because it's it's one thing to agree that we need to develop this type of judgment. it's another thing to know how to do that inside a very busy advisory firm, right? And most firms don't have some a type of formal leadership academy set and ready to go, right? They've got busy client meetings, they got service requests, planning work, team meetings.

Aaron Grady - Okay. Yep. Yep.

Steve Phillips - Yeah, true.

Allan Oehrlein - compliance requirements. I mean the list is endless, we've seen it. So I guess the question I'll throw back at you is, you know, how do we develop leadership in the middle of working on a real business?

Aaron Grady - Yeah, it it's a fair question. And I think that's the right question as well. You know, as you were saying that, I was thinking about every single practice that I've engaged with that that nod their head along like this all sounds amazing, this sounds great. I don't even know where to start. I don't know you know, I can't put one foot in front of the other because I'm so busy working in the business, I can't work on the business. And now you want me to develop a training track for developing leadership inside of my organization. and so

Steve Phillips - Yeah.

Aaron Grady - I would say the answer isn't as simple as giving someone more responsibility. You know, if we're talking about judgment. It's

It's giving them the right leadership experiences, which Steve keep you've alluded to a bunch, is about creating opportunities. And again, we talked about this in our last episode about creating the right environment for them. But to create a simple framework, I think, for our fourth leadership shift would be this. And I guess the idea is shifting from more responsibility, so just giving them more stuff they can do, to the right leadership experiences. Because you can just give, hey, get more stuff done, but that's not necessarily going to develop into.

Steve Phillips - Yeah.

Aaron Grady - Leader. So let's talk about right leadership experiences. And I think that's probably the more appropriate or right word for what we're want to talk about. So if an advisor is listening and thinking, I agree with all of this, but what can I actually do with my next gen advisor, my operations leader, or someone I believe has leadership potential, this is probably where I would start. there are four leadership experiences over that.

Aaron Grady - That I should say every future leader needs. I would say, first off, would be some form of ownership, and and I'm not saying equity ownership, this is ownership of process, and we'll get in some details about this. influence, you mentioned that, Steve, having the ability to influence others. Decision making is very, very important, and then development. So ownership, influence, decision making, development. Each one of these builds a different leadership muscle, if we want to think about it in that context.

Aaron Grady - If one is missing, leadership grows slowly and it slows down completely at some point. So, so what I would say is the first one I would say is ownership. So if we talk about the first experience, it'd be ownership, and I would say it like this. this ties directly back to the first episode in the series. Not the tail, not task ownership, but outcome ownership. There's a big difference between saying prep prepare the review meeting materials and saying

You own the client review preparation process. Your job is to make sure that every that that the client, the advisor, and the team are fully prepared for a meaningful meeting. One is a task, the other is a simple outcome. They have responsibility for what happens.

Allan Oehrlein - And a quick thing to add here is when someone when someone owns an outcome, they start to think very differently, right? They anticipate the issues, they they look for ways to improve. they think more so about the client experience, which we're all huge proponents of, right? they stop asking, Did I complete the assignment? And they start asking, Did we achieve the desired result?

Aaron Grady -Mm-hmm.

Aaron Grady - That is a that's You know, again, as you know, Steve, you said it too, you know, as we have this conversation, it's getting my head thinking about even more things and it it's spot on. I've had this conversation so many times. It's instead of having people check boxes, right? I did what you asked me to do. Yeah, well, you did what I asked you to do, but was it the best way it could have happened? Or did we actually really achieve what we what the intended outcome was? No. If someone actually has the ownership of the outcome, they start thinking critically. You know, ownership teaches

Steve Phillips - Thanks.

Aaron Grady - Another great word, accountability. You know, future leaders need future leaders need to own something that matters, you know, whether it's client onboarding, client review preparation, service model execution, marketing calendar implementation, which is a big one. Hey, running events, team meeting rhythm, process improvement. The point is not to give them more work, the point is giving them responsibility for the outcome. you were gonna share something, Steve?

Steve Phillips - Yep. I'm sorry. Oh yeah. No, I was just thinking, mean, that's empowering them to make those decisions and allowing them to, you I think of all the mistakes that in my leadership career and even in early days of protocol and all that, I mean, you have to make the mistakes, you have to allow. And that's what I think when I said earlier when we opened, all the love to all the builders and lead advisors that we have been privileged to work with.

Aaron Grady - I thought you had you were gonna

Steve Phillips - It's difficult. The farther down the road you go, and I think we've mentioned this, before you start considering new leadership and ability to empower, if you get a condensed timeframe, you're less willing to allow for a little slip up in judgment. Made a wrong decision. Let's have a conversation about that because time is a constraint that really, I think, hampers empowering people to your point. They have to be able to make decisions, make mistakes.

Aaron Grady - Okay.

Steve Phillips - have that be okay and get down the road. If I'm trying to get rid of this thing and sell it and do all that in a year to 18 months and also looking for new leadership, it's not gonna, it just can't happen. It just doesn't happen that quickly.

Aaron Grady -Well in and decision making one Yeah, decision making is is what we're gonna get to. let's let's talk about the the second experience real quick, influence. so we said ownership, influence is the second one. look, I think influence is important. You've brought it up, Steve. The problem is I think of the ones we've talked about, because decision making keeps coming up, ownership keeps coming up, I think influence is one that's often overlooked.

You know, a firm may give someone responsibility but not give them a chance to influence others. And I think some of that is also because I don't think people quite understand what influence means in this concept and in this context. You know,

Steve Phillips - I know.

Aaron Grady - Leadership is not always authority. Leadership is influence at its at its at its base. The ability to influence someone else to make a decision or do something. You know, can a person lead a team meeting? Can they facilitate a discussion? Can they get buy-in from another person? Can they communicate change? Can they rally people around a goal? Can they lead without relying on a title?

Steve Phillips - Yes.

Allan Oehrlein - Mm-hmm.

Aaron Grady - It's that I think that's a big one too. It's, you know, it and again, I know I've used the military context, but it just it seems poignant, you know. battlefield leaders aren't always the people that have the the stars or the bars on their shoulders. It's people who lead by example. It's they influence others by their actions. And so those are real leadership skills.

Steve Phillips - Right. Yeah, that's the thing. Yep.

Allan Oehrlein - And I'll tell you this can be especially challenging in that advisor firm environment because you know teams are often very small. So someone may be moving from a role of just being a peer to a leader, or from a support role to a leadership role, or from you know second chair advisor to someone who now has a bit more influence over client conversations and planning or team behavior. So influence itself becomes critical because

Aaron Grady -Yep.

Steve Phillips - Yes.

Allan Oehrlein - they can't simply just demand cooperation. They kinda have to earn it.

Steve Phillips - Yeah, also well said.

Aaron Grady - Mm-hmm. That that is super, super important. I'm thinking about real life examples now where you had a junior advisor that joined the firm and now they're moving down a career path where they mention may may end up becoming a partner or maybe a succession part of the plan. And you've got a thirteen-year-old vet a 13-year veteran of the firm that was there long before this junior advisor, and now you're saying that I'm gonna report to this person or I'm gonna answer to them?

Steve Phillips - Yeah.

Aaron Grady - It's tough. So teaching influence and giving influence to show leadership capability before they step into having a role, I think I think it works. You know, future leaders need the opportunity to practice

Steve Phillips - Thank

Aaron Grady - Practice influence before they're formally expected to lead. Let them run them run that that team meeting, let them lead client event planning discussions, let them, you know, coordinate a service model rollout. Let them be part of the strategic planning conversation. let them debrief. Or help them, you know, look, influence ultimately is going to teach them communication. That's and that's that's the big thing. And look, communication is one of the core skills of leadership as well. But

If if we were looking if just to for the sake of brevity

And I know we've been going for a while today, but there's a lot when we kind of pull this all together. Experience number three of the of this process of this framework would be decision making, which Steve you've touched on. You know, and and this is not hypothetical decision making. This is real decisions with real consequences. That doesn't mean you hand someone the keys to the firm overnight. We talked about this guardrails. it but it does mean that they need a defined space where they can make the call, right?

Allan Oehrlein - Mm-hmm. And honestly, this goes back to the whole idea of authority has to match accountability. Right? If someone is accountable for an outcome but cannot make decisions related to that outcome, do they really own it? You know, they're responsible for reporting back to the person that actually owns it.

Steve Phillips - Yeah.

Aaron Grady - Yes. Yep. Steve?

Steve Phillips - You know when we've talked about how do I what's the training look like or how do I do that? And you guys just touched on something There are a couple people that I'm working with now that I Would say they're in leadership role, but I asked their opinion all the time And I want to know what what decision would you make here and why?

And so that's sort of that, and I think you both touched on that in different ways. It's that communication, it's definitely allowing for a different thought process and perhaps a different direction and allowing it fully that we could very much go the way that you're thinking about. And I think that that's a way to cultivate kind of leadership mindset.

is participating in these conversations and allowing this person to make a mistake where they're kind of protected. And I had kind of written that down as you're bringing up leader. And we've all seen leaders and you guys mentioned it that came from the ranks and other people are now reporting to me and I can't believe that's ever happened. And I think that you have to protect those people and make sure that the team understands and allow them to grow.

Aaron Grady - Right. Mm-hmm.

Steve Phillips - And so I think I said this too about sub leaders and some organizations they're big enough that perhaps a future leader could lead a smaller team of two or three making decisions, crafting a vision, perfecting their listening skills, which all of those things can be done. That's another track that can be taken, I think. And so whatever experience you can share with a person you see as a future leader is valuable.

Aaron Grady - Agreed. And and I think, you know, as as we talk about this, look, the the simplest form of that is future leaders need decision rights.

They need ownership, they need opportunities to influence others, and then they need the right to make a decision. And you can find different ways to do that, you know, to put the guardrails on it. Maybe you can make it simple and you baby step into it. Maybe they can make a recommendation as part of the hiring process. They can weigh in and give their opinion. You know, maybe they can help, you know, make some planning decisions when it comes to a new client situation. Ultimately, decision making, to reflect back on something we've already talked about, decision making actually teaches judgment. And so without decision.

Allan Oehrlein - Mm-hmm.

Aaron Grady -Decision making experience, people may understand leadership conceptually, but they will not be prepared to practice it on a day-to-day basis. And so that kind of brings us to our last experience as we kind of frame this out. So we had ownership, influence, decision making. The fourth is development. You know, the this is where leadership starts to multiply. You know, at some point, future leaders have to learn how to develop others. And this is something that I think.

Allan Oehrlein - Yeah.

Aaron Grady - goes missed a lot of times. This is this is the difference between someone who can personally perform and someone who can make others better. You know, future leaders should eventually mentor a new advisor or new team member. They can coach someone through a challenge possibly. They can help onboard new employees. They can teach standards. They can reforce reinforce culture, but because leadership, understand, leadership is not complete until it starts to reproduce itself.

Allan Oehrlein - Right. And nothing to remember here if I could just throw something in real fast. a firm does not become stronger just because one person becomes more capable. Right. It becomes stronger when that person helps others become more capable as well.

Aaron Grady - Yeah. That's fair.

Steve Phillips - Well done.

Aaron Grady - You know, I I love that thought because you're right. It's you know, we we get kind of narrow cast or narrow focus. Yes, because it's it's if we're just teaching this one person how to be a leader, but they're not actually leading others really. So, you know, ownership, so if we so okay, so that's a great kind of wrap-up to this thought here. So ownership is gonna teach the accountability, influence is gonna teach the communication.

Steve Phillips - That's the definition of leadership.

Aaron Grady - Decision making is going to teach the judgment, and then the development's going to teach the leadership. The kind of rounded up, how to lead others, I should say. So if you miss one of those experiences, again, leadership's gonna grow slowly and is gonna not be as dramatic as what we really want, because we're trying to shorten this curve. So we so Steve to you, of those four experiences, ownership, influence, decision making, and development,

Aaron Grady - Where do you see where firms fall short the most?

Steve Phillips - I think that they don't, I think I said this to the two of you when we were kind of talking about this. I think the word development is vague. And I think that's where people get lost. it's meaningful because I think the other three things that we were talking about feed in. So how do you develop somebody? You talk to them about ownership, you talk to them about influence, you talk to them about decision making and judgment. That's development. Development doesn't have a definition. I think it's all of those things.

And perhaps where I'm going here is that people that are rushing to the decision try to short circuit it by going, let's, we've to work on development. Well, it's a big thing. Which one of those things in our conversation, we've had a long conversation today, which one of ownership influences decision-making are you going to pull out?

Aaron Grady - So I think I think where clarity probably needs to be provided, and you're probably right. I think the description of the experience is probably where the the it falls short. It should really say development develop others is probably what it should say. Because it's not about developing so so I think that's really it. So have ownership, be able to influence others, be able to

Allan Oehrlein - Mm-hmm.

Steve Phillips - All right, that changes the game. Yeah.

Aaron Grady -make decisions and then be able to develop others. And I think that's I think I think that's where the disconnect is. So I I think that's clarity that needed to be provided. we we said it, but I think it's in the title and with the message is if the ability to develop others. So grow others outside of yourself. Teach mental

Steve Phillips - Yeah, I think organizations that have good leadership are lucky because I think that leaders recognize others. That whole thing that's where we started and maybe that's where we end is that, you know, it's seeing things in people they don't yet see in themselves. And then empowering that through decision making and let's talk about judgments, have conversation and listening and all of that. you know, and you're right, it is about the people.

Steve Phillips - and said, you know, developing others. It's said a different way, but it's true.

Aaron Grady - Well, let's let's let's talk about our last leadership shift and kind of bring this thing all back together. And and kind of we've talked about this topic, but I think we really kind of need to, this is probably where we could end the conversation. Is here it's all of this is not just about making one person more successful. It's not just about making a next-gen advisor more productive, it's not about helping an operations leader become more efficient.

Understand the bigger goal is building a firm where leadership doesn't just live in only one person. This is what creates continuity, this is what creates capacity. We talked about capacity, this is what creates op optionality, which is an interesting word.

Allan Oehrlein - Uh-huh.

Aaron Grady - and this is what allows a firm to become less founder dependent and more leadership enabled. And so the shift is shift from being a founder dependent to a leadership enabled.

Allan Oehrlein - Mm-hmm.

Aaron Grady - Founder dependent to leadership enabled firm. Because look, the true measure of leadership is not how many, and the Steve, you you say this all the time. The true measure of a leader of leadership is not how many people you that follow you. It's how many leaders exist because of you. And that's a very different scorecard if you're keeping track at home. most advisors are still measuring revenue, AUM, new clients, client retention, and profitability. And again, those are all big important business metrics, and I'm not diminishing any of them.

Steve Phillips - Yeah. Yeah. That's a good one.

Aaron Grady - But leadership asks different questions. Who's better because of your leadership? Who's more capable today than they were two years ago? Who's making better decisions? Who's leading more confidently? Who's developing others? Those questions reveal whether leadership is multiplying inside of your organization or staying concentrated in one person.

Allan Oehrlein - Yeah. And if I can add something again, if leadership is still concentrated in one person, the firm may be a lot more fragile than it actually appears. Always a good thing to remember. And that again, even if the revenue is strong, even if the client relationships are strong, even if the team is busy and productive, because if the founder or the lead advisor is still the only real leadership engine, then the business may not be as scalable or transferable or even as sustainable as everyone thinks.

Aaron Grady - Yeah.

Steve Phillips - Yeah, well, that's great. That is

Aaron Grady - Well, and I think that's I think that's the leadership mirror, right? Look around your organization and ask the question: who could lead an initiative if I stepped back? Who could protect the culture? Who could make a hard decision? I ask that question amongst your team. Who could develop that next generation? Who could carry the vision forward? Who could sit across from one of our top clients and represent the future of our firm with confidence? And if the if the honest answer is I'm not sure.

then that's not just a staffing issue. That's a leadership development issue inside of your firm.

Allan Oehrlein - And this is where succession still matters, right? But it it fits inside the bigger conversation. So when you develop leaders now, you create more options later. You create growth capacity, you create retention, continuity, and again you're creating and building on that enterprise value. And yes, you create succession optionality.

Aaron Grady - Yeah. Yeah, exactly. Look, succession becomes one of the outcomes of leadership development. I know we haven't spent a lot of time there.

But we started today and we said, look, leadership solves a lot of problems. The key thing is not to wait until you're staring staring in the face. You know, we talked about this before we got on the call, Steve. You know, for some industries, if if you're short on a leader, you can go and pluck it off the tree of another firm that does exactly what you do. It's not always that easy inside of what we do. Especially, you know, there's there's cost constraints, but there's also integration. It's it's not the same as other industries. And so

Steve Phillips - Yeah. Yeah. Yeah.

Aaron Grady - Self-growing and self-taught leadership is so important. And as we said, succession becomes one of the just one of the outcomes of leadership development. But even if succession is years away, the need for leadership development is present right now. Because look, the future of your firm does not depend only on what you build, it depends on who you develop. And so kind of rounding out this conversation with you, Steve, when you think about leaders who had a big impact on you.

What did they do differently? How did they develop you as a leader rather than simply manage you as a person?

Steve Phillips - I think that they, I can think of a couple at the top of my head that empowered every idea that I had, that had some value, put me in front of teams or did that sort of sub leadership thing and gave me a ground to learn. One of them back in the day was

Aaron Grady - Mm-hmm.

Steve Phillips - significantly older than me and that's something that I would say to this to our advisors now. So good chance that the future leader of your firm is decades younger than you. And we see that more and more and more and not to be afraid of that or think that they're not capable and all those types of things. I was empowered to think outside the box from the very beginning. And I definitely was part of decision making but was sort of held accountable.

you know, share your work, let me see your work. And then if it's wrong, you gotta own that. It's not the end of the world, but you have to own that and then change your thought process. So I'd say I was empowered from the very beginning. I also wanted to be a leader. don't like the details. I think my coaching team is probably shocked. I'm not the detail guy. I'm more vision guy and who do we bring along and who do we grow?

Aaron Grady - Yeah.

Steve Phillips - And early on I recognized that about myself and I was fortunate that people saw something. Yeah, don't worry about the details. What's the big vision that we should be after?

Aaron Grady - You know, yeah, the use you used a word there, Steve, that I don't think we've used unless I missed it, I don't think we've used at all today, and it was the word empower. And I think there's there

Allan Oehrlein - Mm-hmm.

Aaron Grady - There's elements of that throughout what we've talked about today, of you know, the idea of teaching judgment before authority and you know the decision making, you're empowering people to make decisions and influ you're empowering them to influence others. But I think empower is a great word to help capture the spirit of what a lot of this is, is

when you're creating this experience for for leadership or creating the environment for it, as part of that is the empowerment of your team to continue to grow and develop as opposed to Yeah.

Steve Phillips - That's part of the protection and support too. My final thought would be as we get close to this, I think if you have a hunch that there's a person in your organization that could lead, take a shot. Take a shot. them, whether it's not 100 % of it, put them in leadership situations, decision making, conversations, all those types of things while they have

you around to make a mistake and try again. think that's a, if you recognize somebody, take the shot. And I think that more often than not, you can win that. Right, exactly, exactly.

Aaron Grady - Don't condemn coach, right?

Allan Oehrlein - No

Aaron Grady - So, so as we as we kind of bring this home today, I want to connect back to the full three-part series of what we talked about. You know, in the first conversation, we talked about develop delegating responsibility instead of tasks. That was about ownership of outcomes. The second conversation we talked about was creating the environment where people can thrive. That's about giving direction, not directions. And then today we've talked extensively about developing future leaders because ownership creates capability.

Environment creates confidence and leadership development creates continuity.

Allan Oehrlein - And another thing here, I I think it gives advisors a practical challenge, right? Don't wait until someone's ready to give them leadership experience. Just like Steve was saying, right? Leadership experience is is what helps keep or starts to get them ready in that spot. If you've got a next gen advisor, an operations leader, or just a high performer on the team, the question shouldn't be, are they ready? The better question to think about here is what experience do they need next?

Steve Phillips - Yeah.

Allan Oehrlein - Do they need a level of ownership? Do they need influence? Do they need decision making? and do they need a chance to develop someone else?

Aaron Grady - I love that. I I I think I think that kind of puts a bow on it perfectly is once you have identified the person, and I guess maybe I throw it to you, Steve, as it's kind of rap wrap up before we close out today, where would you tell people, you know, final thought from you to advisors listening who are wanting to start this developmental leaders track more intentionally, what where where would you say start this week?

Steve Phillips - I take the view that there is a leader in your organization and don't have any specific descriptors on it. Age, current role, whatever. If you looked at your team, no matter the size of that team, and were looking for leadership possibilities, I'd be willing to guarantee you there's somebody there that has those.

Does that come to fruition five years down the road, whatever? Maybe, maybe not. But I think if you went with an eye of who has the things that we've talked about, who is a good listener, who's a good communicator, who doesn't panic, who has the long-term vision, who has a sense of tying, influencing people and bringing them together, probably is somebody on your team. And if you need us to have a conversation with you and help you to kind of...

implement that, even if it was a temporary thing, I think it's worth looking at your team that

Aaron Grady - Yeah, I I think that's perfect, Steve. And I think that's probably a good place for us to kind of stop for today. Look, great firms don't grow beyond the founder through systems alone. I know we're big, big on process, but they grow because leaders are intentionally developing other people. And ultimately, the future of your firm will not be determined solely by what you accomplish. It's going to be determined by who you develop. So

Aaron Grady - As advisors, you spend years building your business, serving your clients and creating value. But some of the most important work a leader ever does is not only found in the clients they serve or the assets they manage, it's found in the people they develop. Because great leaders

Do not create followers, they create more leaders. And those leaders help ensure the impact, culture, client experience, the vision of the firm continues to grow beyond any one individual. So, with that, thanks again for joining us for another episode of the Rare Advisor Podcast. If you found value in today's conversation, make sure to like and subscribe and share it with other advisors who may be navigating the same leadership journey you are. And remember, as I always say, when the why is clear, the how becomes clear. So never lose sight of your why.

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The RARE Advisor is a business model supercharged by Recurring And Repeatable Events. With decades of experience coaching successful advisors, your host, along with other leaders in the industry, discusses what it takes to grow a successful practice. With the aim of helping financial professionals and financial advisors take their business to the next level, this podcast shares insights and success stories that will make a real impact. Regardless of the stage of your practice, The RARE Advisor will provide thoughtful guidance, suggestions for developing systems and processes that work, and ideas for creating an authentic experience for your clients.

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