Episode Transcript
Matt Sonnen [00:00:23] Welcome back, everyone, to the COO roundtable. We are recording Episode Eleven today. Our last episode was a recap episode. We went back and revisited the first nine recordings and shared some of the short audio gems that our previous guests had shared over the past year. There was some really great content in there, so I suggest everyone go back and take a listen to Episode 10 if you haven’t already done so. Hopefully that will prompt listeners to go and check out some of the previous episodes. We’ve had some fantastic guests and I’ve just been in awe of the practice management tips that we’ve been able to share with the industry. With the last episode being a recap, I’m really excited to get back into it. This month we have two great guests today and we’re going to tackle the COO role from a slightly different angle. We have with us Kelli Cruz, a big name in the industry. I’m sure all of our listeners know who Kelli is. She speaks at many industry events and writes a lot of articles that I know I’ve learned from over the years. Kelli touts herself as a financial talent guru, and I would agree with that. She focuses on org charts, making sure that the right people are in the right positions, she helps firms with compensation plans and hiring strategies. As we’ve discussed on this podcast many, many times, and as all of you hopefully know, we are in a service business. We don’t sell widgets in the RIA industry. So when you’re in a service business, your people are the most valuable asset. And so the work that Kelli does with firms is extremely valuable. And we’ll talk about all of that today. So, Kelli, hopefully, hopefully I haven’t garbled your value proposition too badly. But why don’t you in your own words, why don’t you tell us a little bit of your background and a little bit about the work that you do with RIAs?
Kelli Cruz [00:02:01] Sure. Well, thank you so much, Matt. I’m excited to be here on the podcast. We’ve talked about doing this for a little while, so I’m glad we made it happen today. So I’ve been working with the RIA and advisory industry since 2007, which means I joined right before, you know, the big downturn, so to speak. And it’s been just a great experience. And I’ve been thrilled to work with advisors in a variety of capacities. I founded my own consulting firm back in 2013 so that I could really pursue my passion, which is working with one advisory firm at a time, although I love these opportunities to expand beyond just one firm at a time and do some thought leadership around, you know, what really are some of the best practices or the things that make a firm great. So I work with both small and large firms. Usually, people reach out to me when it gets to be a little confusing when there’s more than just a few employees. And knowing that most founders, owners, and partners got into this business to work with clients not necessarily around human capital or human resources. I work with firms to help them do that, to put some really great processes in place and practices to help them really get the best from the talent on their team and to be able to attract really great talent and to retain it over time. So that’s what I do, I at Cruz Consulting Group and I’m really excited to be here to talk specifically about the COO role.
Matt Sonnen [00:03:48] Awesome. Thank you. And you’ve brought one of your clients with you today. Someone you worked with to help them think through their needs for a COO as they were rapidly growing and looking to close a substantial acquisition. Kelli, why don’t you introduce Jim and then we’ll let Jim give a background of his firm, Newport Advisory.
Kelli Cruz [00:04:06] Sure. So Jim and I met back– I think, Jim, it was back at Impact in maybe 2017. I’m dating myself a couple of a couple of years ago. Jim runs Newport Advisory Consulting out of Newport Beach. And Jim and I met up after I did a session on compensation and he was interested in finding out more about how I worked with firms at the time. And I’ll let Jim tell his story. But at the time, he had successfully completed a merger with another firm and really felt given the size now of the combined two firms that he really wanted to focus on putting some process, some structure in place around the talent management. So Jim and I have worked on and off with his team over the last few years and have really had a great time putting some good stuff in place for him and the team there.
Matt Sonnen [00:05:05] Perfect. So, Jim, why don’t you tell us a little bit about the firm?
Jim Regitz [00:05:08] Sure, thanks for having me. I appreciate that. I’ve been in the industry since 1984 and left for the independent world in the mid-90s and formally set up Newport Advisory in 1999 in Newport Beach, which was just me and one person back in those days. And we’ve kind of grown over the last 20 years or so. And our AUM number currently sits at about somewhere in the $700-800 million range. We have twelve employees and two offices, one in Los Angeles and one down here in Newport Beach. But they operate as one operation. Our ideal client is, you know, generally somebody in the high net worth or ultra-high net worth area. A good chunk of our clients are focused into the entertainment business in some capacity, either directly with the studio or in one of the supporting industries, advertising or something along those lines. One of the commonalities of a lot of our clients are that there are people that have complex assets in their life, being real estate or corporations or stock options and things along those lines that make it more difficult than just a traditional plan type of thing. And our work really is at the starting spot is really focused on the planning side around that before we get to asset management. Historically we kind of grew very much as traditional people would do with referrals and through accountants and attorneys and clients and things along those lines. And probably in the last five to seven years, we started to grow by acquisition. And due to some relationships we had, we started with a couple of smaller ones and then a fairly sizable acquisition about five years ago and that went fairly well. And then just about two years ago, we did the ones you were referencing, which is more significant. And so that kind of ended up having to be just about where we are today. So it’s been a pretty significant growth level. And so with the last year and a half or so, two years, we’ve just been trying to absorb that. And Kelli’s been kind of helpful for us, trying to think through structure and who does what and how we’re going to get things done and what is the big picture kind of look like in the future. And so we’ve kind of worked through that here the last couple of years.
Matt Sonnen [00:07:44] Congratulations on the 20 year anniversary. Not many registered investment advisors have been around since 1999. So congratulations there. Kelli, you participated in our COO White Paper that we published a year ago this month during our research for that paper. You and I talked about something that we talk about on the podcast all the time, and that’s the fact that COOs are typically the H.R. department at most RIAs. And you mentioned advisors often say, I didn’t get into this business to manage people. So they typically are looking towards the COO to handle the recruiting and the training of talent. And the COO is typically the person in charge of managing the org chart, ensuring the firm is delivering an efficient client experience to a large number of clients, etc. So, Kelli, can you give us your thoughts on the COO role and how RIAs typically are leveraging that position?
Kelli Cruz [00:08:36] Absolutely, and that’s one of the reasons why I thought Jim would be a great guest as well today because I didn’t have to convince Jim of this. Jim made the decision to bring on board a COO before he and I didn’t even work together. And I think a large part of the success we’ve had with you know, again, I’ll refer to it as process and procedures we structure, we put in place around defining roles, defining the comp plan, career tracks, setting up goals and measuring results for folks has had a lot- a large part due to having that structure with a COO. And Jim also has an Operations Director as well. But I do find that it’s an extremely important role. And part of the work that I do is helping to take a look at blueprinting what your current org structure looks like and then helping to evolve that structure as we see naturally things happen over time. And one of the things that I always like to bring up is, you know, once you reach about $4 million in revenue or as you prefer to think about it as AUM, $500, about $550 million in AUM, that’s really when you begin to see cracks in the structure when it comes to being able to give people direction, coaching, feedback– if you don’t have any real supervisory or management structure in place. A lot of times what I see are firms that, you know, the founder himself or herself or partners are all trying to wear the hat of, you know, supervisor-manager, as well as, you know, key rainmaker, having the majority of the top clients through the firm that they meet with, trying to sort of all wear the hats of the C suite roles. And what ends up getting kind of left behind, I think, is that focus on creating a true team and talent management. And so, you know, I think it’s a really important role, whether you call it a COO initially or it’s more of a Director of Operations and then you grow into the COO. You know, about $875 million in AUM or around $6 million in revenue, around 20 employees we’ll see that combination of COO and Jim’s going to talk a little bit more about it and a manager. So now we’ve actually got to two roles, if you will, dedicated to the structure of managing and supervising the team. Most of the time we’ll see that, you know, that management structure for the operations, the administrative you know, the client service, admin team, technology and systems compliance, cybersecurity, all of the things the day to day running of of the firm in the office or the offices separate from the client-facing roles. So I cannot emphasize enough and I appreciate the opportunity to be able to do so that it is a critical role. And you talk about this in the white paper that you put together, that it’s a critical role if firms are going to continue to evolve and grow and be successful with their clients.
Matt Sonnen [00:12:13] Yeah, I think we all just beat into our core that clients first, clients first, clients first. But then like you were saying that the employees kind of get left behind sometimes and nobody’s really manning the ship and thinking about job descriptions and workflows and career paths, etc. So, yeah, I mean, that’s the whole point of this podcast is to talk about how vital this role is. So we’re preaching to the choir, but I appreciate hearing your perspective on it. It’s fantastic. So, Jim, what led you to realize that your firm needed a full-time COO?
Jim Regitz [00:12:49] Well, it’s kind of a long path as we kind of grew. I guess I’ve always been fairly aware of my own shortcomings and have tried to hire, you know, administrative folks to kind of fill in those holes. But as we started to get bigger, one of the early acquisitions that we did, I did it with another person, and as we did the acquisition, it looked really good together on paper. And he had some administrative staff. And I did. And we kind of took off with it. But when we started working together, we realized the synergies weren’t right, that he was had a different model for how he did business. And, you know, the employees that were involved. It wasn’t– it didn’t fit very well. We had a kind of a cultural problem. And it really didn’t work. I ultimately let him buy us out of that and then we went onto some other acquisitions. But as we went on to the other acquisitions, I knew we were going to do it differently and that we needed to have, you know, key management that was going to be able to run the firm day-to-day. Because as you said earlier, your focus is with clients. And that’s generally where most of us are very good at and not necessarily good at all the other things like accounting and H.R. and compliance and the rest of it. And I knew for us to be able to grow I had to get out of that because I was finding my time was not being allocated towards the front-end client. And so that kind of led me down the path of looking for the right person. And so when this other acquisition kind of took place, I knew I needed to bring that person in immediately. So I found the right person and hired her and then we just started to work through what the role was going to who was going to look like. And it kind of started off with her doing more of the things that I knew I just wasn’t going to have time to do. You know, over the last couple of years, it’s really evolved into the role she’s in now.
Matt Sonnen [00:14:56] Perfect. So, Kelli, I think what Jim is really talking about is self-awareness. He was self-aware of the goals he had for the firm, but more importantly, self-aware around the roles and responsibilities that he knew he could, and that he wanted, to handle and what roles and responsibilities he wanted to hire for. So that doesn’t always happen, right? The advisor isn’t always self-aware. So in your experience, working with many RIA owners. Where do you think they go wrong when they’re evaluating the COO role?
Kelli Cruz [00:15:27] That’s a great question. And I just want to emphasize that Jim has done a really great job of finding the right candidate. And I think part of that had to do with having worked with her before, having had some history and knowledge. And I think there’s a huge trust factor. Both I think, Jim, that you have with Kathleen and Kathleen has with you and the rest of the team there. And I think that’s a really important ingredient in the combination of a successful, you know, transition with a COO and in getting that role in the person in it set up. Because it’s important that the partners or partner who’s doing a lot of the COO work that the running of the firm be willing to delegate and give up control, and where I’ve seen this role not be successful, I’d put it kind of in two categories. One would be, you know, not not setting the person up for success by delegating and giving them the correct amount of authority that they need to establish themselves in the role and to take things on and then also giving them the resources they need to be successful. So setting up the role so it isn’t a big hodgepodge of all the stuff you don’t want to do, but really delegating and creating the role around the key areas of running the firm and then structuring such that there is the correct resources for that person to be able to be successful. And the other thing is making sure you recruit somebody in who is definitely a culture match with the firm and that doesn’t have to be somebody who necessarily comes from the industry, then it’s just those those traits and characteristics that really are the blueprint for success in the firm and making sure that you’re bringing somebody in that has those traits and those core competencies of somebody that can be successful in your culture. And I think Jim, Jim has just done it. He did an excellent job in picking somebody and then letting her step into the role, letting her embrace the different aspects of it and letting that happen over time, not overwhelming her. You know, with everything on Day One, but really making sure that she could step into the role and be successful in it.
Matt Sonnen [00:18:14] You talked about giving the person resources, but not another super valuable piece you mentioned is giving them authority. We had David Canter from Fidelity on and he said, unfortunately, I think he’s right, he said, “I think the failure rate of COOs in the RIA industry is about 50%.” And one of the things he pointed to– there is that there’s a lot of factors that go into it– but the owner doesn’t really want to change. And so when this person comes in and they believe that it’s their job to bring about change in the organization, the owner doesn’t want to do it. And so the employees very quickly realize this person doesn’t have any authority here, that they’re trying to get us to do things, but we can tell from the higher-ups, from the owner of the organization, that he or she doesn’t really want to do these changes. And so very quickly, the COO– just they have no voice, they have no authority. So, yeah, that was all that was all fantastic. Jim, what do you think you did well, in empowering Kathleen to do her job and run with her capabilities and how have you two divided that the division of labor between you two?
Jim Regitz [00:19:23] I hired Kelli, I think that’s what I did right. But on a serious note, you know, this was, you know, a very large acquisition and it almost tripled our size and it was a major undertaking. And so bringing in people from the outside to help us kind of think through like how we were going to do this, I knew there was not a chance that I could do all of this. And so to sit back and look at what we were needing to get done and to look at what people were doing now and look at where the human capital was being applied and to figure out how to do that process we ran through with Kelli. And we really got buy-in from everybody. And I just kind of stepped back and let that process take place. You know, I’d love to tell you it was all on purpose, but part of it was also some was just let me just be very focused on the acquisition and be running around, seeing clients and meetings and, you know, not as available. It was kind of more of, you know, passing a hot potato to Kathleen, you know, she kind of ran with it. But she took the areas which I was weak in. And that’s that’s kind of the key is that she took the areas that she’s very detailed and very good at and let me go do the things that I was really good. I was really just kind of running the advisory team and letting us go focus on clients and getting those processes cleaned up. And she did everything else. And and it worked really, really well. And it kind of moved to another level when, you know, somewhere through that process with Kelli, we kind of brought in one of our other people into our full-time kind of management role as kind of the operations person. And so between her and Kathleen it’s really evolved into a point where things are functioning very smoothly and very cleanly.
Matt Sonnen [00:21:23] That’s great. So Kelli, Jim’s talking about the main impetus for considering hiring a COO was this M&A transaction. Obviously, we all know the industry right now is so hyper-focused on M&A. What do you see? And we’ve talked about a lot on the podcast. But what do you see as the COO’s main function in an M&A transaction?
Kelli Cruz [00:21:48] Yeah, it’s also a great question. And before I kind of get into that, I just want to say I’m so glad you’re asking these questions now because I don’t think it’s discussed enough in our industry. You know, there’s a lot of sex appeal to doing an M&A transaction. And Jim’s probably chuckling right now. It’s you know, it’s an exciting thing to do and yet I don’t think enough thought and care and feeding is given to– like, Jim, as pointed out, you know, the size of his firm tripled– And that’s a structure that needs to be in place. There needs to be a structure in place to manage that. And if you’re just continuing to try to cobble it together like you did prior or before the merger, it’s going to create a lot of problems. And so I think that there is a lot of time and energy spent talking about mergers and acquisitions and doing the deal and the clients and the transitioning of the clients, but not a lot of care and feeding to the transitioning of employees into this, you know, new joint venture, this new firm. And I think one of the things that I see that’s very successful and again, Kathleen did this. And Jim, they really focused on each of the individuals that were now a part of the team. So Jim had his team that he had been working with for quite a while. And now the new combined teams and what was nice about this merger, I think, Jim, you’d agree, is some of the folks working in the two firms knew each other because Jim and the partner that he merged with, they knew each other for many years. So there was relationships that had been established, which I think, you know, is ideal. If that can be the case. It isn’t always the case, but it can really make the transition smoother. But one of the things that they did was we really focused on blueprinting, what everybody’s job was, you know, before the merger and then what the role was going to be going forward, because understanding how work got done, what systems were used, what processes, work workflows, all of that, and then to have that be combined into how we’re going to do this going forward. And there was, what, Jim, at lease about a year, year and a half of sort of that transition of this is how we’re gonna do it before we actually have the new process of how we’re going to do it as a combined firm. Would you say that’s true?
Jim Regitz [00:24:38] Yeah, about– that was about a year.
Kelli Cruz [00:24:41] Yeah. So there was this transitional period that everybody had to work in. And I think people were excited about it because of the way in which Jim and Kathleen and Alison approached it, which was, “okay, there’s going to be this great opportunity for everybody as a combined firm”. And so people really bought into that it’s an exciting time. Yes, there’s lots of change. Yes, everyone’s going to have to roll up their sleeves and work really hard. But there was this sense of, wow, this is going to be not only great for our clients, but great for all of us. And Jim, to his credit, has a younger workforce. And so that that ability to show people, you know, we’re going to recognize what you’re doing today. We’re going to recognize how hard you’re working during this transition. And oh, guess what? There’s going to be this career path, once we get through the transitional period. I think most firms in our industry right now with M&A are missing that piece and it starts to happen after the fact. And maybe as an “oh, wait a minute, we got to do something here because people are working really hard and they don’t know what the future looks for them now in this in this combined firm”.
Matt Sonnen [00:25:59] You’re exactly right. It’s all about– I’ll do a shameless plug here. But we just did a three-part blog series, it was called Fear of Change just, we’re trying to talk about it more in written form and on the podcast. Just everyone’s so hyper-focused on technology, especially around that CoO role. But it’s really all about the people. And so we did a three-part series, The Fear of Change snd we talked about the fear of breaking away, the fear of implementing new technology. But Part One, because it’s exactly right with what you’re saying. Part One was the fear of, the emotions of an M&A transaction. And it’s not just the employees of the seller, “oh, geez what’s going to happen” with the employees of the buyer are just as nervous of, “well, there’s only two of me now who’s who’s going to win out here”. And so it really comes down to all the communication, not only having the plan, but actually communicating it to all the employees because yeah, it’s just so much is tied up in this. And there’s so much uncertainty swirling. If you get the communication wrong, it really leads to problems down the road.
Kelli Cruz [00:27:02] And I think to your question about, you know, what the main function and I’m curious, Jim, since you’ve been through this, you can weigh in as well– but it’s change agent. It’s communicator. You know, it’s chief communications officer. It’s keeping everybody, you know, on the same sheet of music, you know, working together to to make the client transition as smooth as possible.
Jim Regitz [00:27:30] I would agree with that. It’s you know, I think on our end. From a firm level, I mean, it was kind of a combination, you know. I tried to communicate periodically on a large scale vision, like what’s going on and what are we doing and what are we trying to accomplish? And then particularly as Kelli jumped in and started working with Kathleen and Leo and Alison, you know, the people around us were finding that, you know, we were bringing them into the process of what we were trying to accomplish, not trying to run off and build, you know, functions and then tell them what’s happening. And I felt they kind of felt part of that. You know, the change in the new direction and ultimately is that kind of manifested itself into new job descriptions, new compensation, you know, career paths for everybody. You know, ultimately the where it all led to a change– it led to a change of culture. And that’s what it’s about. And now that’s a place where, you know, people feel kind of empowered. I think they feel part of our team because they helped build it. And, you know, there’s a path for everybody, including, you know, into the ownership realm at some point if if that’s someone’s desire. And I think that that culture is really what’s kind of been evolved. And that’s probably the key to why we’ve been fairly successful to this point.
Matt Sonnen [00:28:56] Hopefully one plus one equals three and you get that exponential growth through that change of culture. I think that’s exactly right. So, Kelli, Jim, chose to hire from outside the firm rather than promoting from within for the COO role. What’s your opinion on the pros and cons of hiring from outside the firm? And then one step further. Do you have an opinion on whether the COO should come fro outside the firm, but should they be within the industry? Or does it work bringing someone from outside the industry, someone who could potentially provide a fresh perspective, assuming a lot of people assume will operations experience is transferable across industries? So a two-part question. One, hiring from within versus hiring without the firm and then hiring within or outside the industry.
Kelli Cruz [00:29:45] I think part of the answer lies in, you know if you have someone internally who can step into that COO role and not try to have a death grip on every responsibility they’ve ever done for the firm. You know, in other words, they’re willing to give up the job they’re in to move into the role of COO, where I’ve seen the internal promotion and the COO not go, well, is when that doesn’t happen. So the person just takes on more and more responsibility and they don’t ever shed any of their prior responsibilities. And it really then doesn’t give them that opportunity to truly elevate into a more strategic role, because the COO, although it takes care of the day to day running of the firm, it still needs to be a strategic partner. There needs to be, you know, this role of having a hand in the strategic planning and looking out beyond, you know, how. Day-to-day the firm is operating. And I think that, though, one of the mistakes that happens with internal promotions sometimes are that, again, the person isn’t allowed to step into that role or they may not have the capability to give up, you know, some of their responsibilities and to really become more strategically oriented. So it isn’t that I would say an internal COO can’t work because I’m thinking of one right now. That has just been phenomenal. She came up to actually the client service side. But part of that was her want and desire to take on more responsibility, to get herself educated, to, you know, learn about technology, to learn about the human resources, different aspects. But she had she had the ability to give up her prior role. And I think that’s key. The external hire, if you can find again, Jim mentioned this the right cultural fit. He mentioned culture, culture being important. But the cultural fit. I think that that’s key. So whether that’s someone within the industry or outside the industry, if you’re hiring from outside, they’ve got to fit with, again, those core competencies that are, you know, that make for someone being successful in the firm. I think if you’re going to look outside the industry, it needs to be a very seasoned person who again, can have a high degree of confidence working in an industry that they may not know backward and forwards. And so that does take someone that has been successful, that has a successful track record and doesn’t have to get into the nitty-gritty detail of everything. To learn it and to be able to manage functions in our industry is very complex. It’s highly regulated. Compliance is a big driver of everything we do. So I feel that it definitely can do it. I’ve worked with a number of firms that I’ve hired from outside our industry. But again, it took someone who had had a lot of success in prior roles running, you know, businesses and wasn’t put off by the fact that, you know, they hadn’t worked in our industry for, you know, 10 or 15 years.
Matt Sonnen [00:33:30] You nailed the answer. That was a trick question. It really does come down to the individual. And so you got it exactly right. So, Jim, let’s talk about Kathleen specifically. What qualities did she have that made her the right fit for your firm and for the role of the COO?
Jim Regitz [00:33:47] Even though she came from the outside, she was somebody that I had known for, you know, 20+ years. We had worked together on a number of occasions. And she was in the industry. So she knew a lot of what we were about. And. What we were trying to accomplish so that that was very helpful. I’m realizing we were doing an acquisition by trying to merge the two firms kind of together at the same time. I knew there was going to be some issues with personalities and people just worried about things. But, you know, she’s an extremely intelligent person. But she also didn’t come in and just try to lay out a game plan. She’s compassionate and she’s empathetic. And you took some time to get to know the people around her and what they were trying to do. And probably the most important piece you just listened. You heard what the people were telling her. And so she gathered that information before we started really building a game plan. And so the combination of those things that I knew those things about her before. And so that’s why when I found out that she was available, there really wasn’t much of a decision on my part of who to hire. She was the person we wanted. And so and it worked out perfectly for what we were looking for.
Matt Sonnen [00:35:13] That familiarity with one another, that definitely helped for sure. So Jim, Kelli alluded to it earlier and we talked about it in our pre calls for this for this interview. The age demographic at your firm tends to skew to the younger side. Can you speak to the advantages and disadvantages of having a younger workforce? Do you have any tips for other firms looking to hire for the next generation?
Jim Regitz [00:35:40] Sure, absolutely. It’s etc. It’s skewed younger. It’s barbell-ed. It’s you know, there’s those of us who are, you know, the old folks, and then we’ve got the other end of the scale who all of the, you know, the younger, younger people at the firm. And it makes it kind of an interesting mix there. But, you know, this kind of goes back to one of the things I just mentioned about Kathleen. It’s about kind of listening. I’ve been to enough seminars over the last couple of years– two, four, five years. And now and hearing about the millennials and all the you know, the the dynamics of having them, you know, working in an environment. And, you know, this came down to me being able to say, you know, am I willing to operate differently? You know, I came into business a long time ago and came up a certain way and things were done in particular in a particular process. But, you know, the world is different now. When I started, we didn’t even have pieces. We worked on an HP-12C. So it’s a little ridiculous for me to think things are going to run the same way. So, you know, was trying to understand like what they’re what the work environment needed to be like and what were the things that, you know, we’re going to motivate them and, you know but at the same time, keep our values, you know, trying to find that balance. And I think we’re able to do that. And I think Kathleen and Kelly, along with Alison– we ended up doing a really good job of figuring out what was going to motivate folks at that level and build a career path and giving them direction. This is one of the big things was, you know, just having a clear game plan and how they fit into it and what their roles were going to be was massive. And once that happened, I think people really kind of felt more empowered to go do their thing. And, you know, it’s worked well for us, but it definitely creates somebody at the top having to be able to stop and say, you know, it’s a different environment now and we’ve got to be able to operate differently or we’re not going to be successful or we’re all just going to grow old and retire and the firm will all go away. And that’s not what we wanted to see happen.
Matt Sonnen [00:37:46] Perfect. So, Kelli, this is this is right in your wheelhouse. What advice do you have for firms trying to appeal to that younger generation?
Kelli Cruz [00:37:53] I think, again, Jim’s firm is a great example, and Jim was just talking about some of it, which is, you know, that engaging them, you know, in the process, it’s interesting because millennials, you know, there’s so much written about them, I’m not sure all of it is true. You know, they apparently, as I’m told and I think Jim will probably confirm some of this as well. You know, they they’re used to having a lot of direction if we want to talk in generalizations as they grew up. And so they look for feedback and coaching. And so if you don’t have a lot of structure, if you just sort of, you know, put jobs together and people sort of do whatever, and there’s not a lot of accountability and structure around that, it’s not going to be an environment in which millennials will thrive. So, you know, having job descriptions and goals and ways of measuring results and then providing feedback on a very just-in-time basis and, you know, on-going is really important. And as Jim has done in his firm is letting them have a voice at the table, you know, solicit them to collaborate around the people practices in the firm. And I’m not suggesting they get to, you know, decide everything, but getting their input and collaboration is really, really important. So I think that being open-minded with your structure and being open to change and flexibility are things that are really, really key. You know, millennials want to be comfortable. They want to work in an environment that inspires them. And, you know, the ability to collaborate without the fear of being criticized. And that means you have to be open as firm owners and partners to change. And maybe not always thinking you have everything completely figured out and know that you’ve hired this fresh, you know, talented person who’s going to come into it with a fresh perspective and a new way of looking at things. And I think Jim would agree with me that, you know, it creates some really great dialog and solutions for clients as well. When you’ve got a bunch of different people thinking about it that look at the world a little bit differently than we do to come at solutions in a different way.
Matt Sonnen [00:40:49] Perfect. Yes. These are all of this has been amazing. Thank you both. We came at it from a different angle, and I really appreciate that. So thank you both. Jim, you’ve provided a perspective we have not had on the podcast yet. Thank you for walking us through your thought process and in realizing you needed that COO position and then describing how Kathleen, specifically better organization. So thank you, Jim.
Jim Regitz [00:41:16] Sure, happy to do it. Thanks for having me.
Matt Sonnen [00:41:17] And Kelli, this you mentioned it at the beginning. We’ve been you and I’ve been talking about doing this for it for a while. So thank you so much. Doing a deeper dive into the H.R. components. I know I sound like a broken record. I say it over and over and over again on this podcast. But I believe 75 percent of the COO’s job is tied up in human capital. It’s not just the technology job that so many people assume it is. So thank you for being here and helping us spread that word.
Kelli Cruz [00:41:44] Thank you. It’s my pleasure.
Matt Sonnen [00:41:46] Well, speaking of millennials, listeners, we are excited to announce the COO Roundtable is now available on Spotify and Stitcher. I don’t even know what either one of those is, but we’re on Spotify and Stitcher and we’re still available on Google Play and iTunes. You can listen to us at Iris.xyz and obviously on our own website, pfiadvisors.com. So thank you, everyone for listening and we will talk to you soon.
