Inspiring Leaders 13: Michael Smith

By: David Scarlett
The Soul Millionaire

David Scarlett, The Soul Millionaire, talks to Michael Smith, CEO of Financial Planning firm, Chamberlyns. Michael started his firm at the age of 25 and made his first acquisition, Chamberlyns, at 26.

Listen out for:

  • Why it’s so important to understand the difference between managing and leading people
  • Why life-long-learning is so closely linked to success in leadership
  • If you’re not seeking constantly to learn from your people … then you’ve probably got this ‘Leadership’ thing wrong.
Here is the transcript
David Scarlett:

I’d like to welcome Michael Smith from Chamberlyns. Michael is the CEO of Chamberlyns. Michael, welcome to the Inspiring Leadership podcast today. Perhaps it’s still appropriate to start with how the coronavirus lockdown has affected the nature of your leadership?

Michael Smith:

Yeah. I think there’s lots of lessons that could probably be learned from this whole coronavirus situation in the last few months of all sorts, but from a leadership point of view, I guess what it’s really brought home to me is the importance of communication.

Also, the tying together of the vision, the mission, the strategy

I guess it’s fair to say that there’s been times where there seems to have been some clarity around the messaging from the government, let’s say, but equally there’s been times where things feel confused, they feel contradictory. And actually the implications of that are that you get questions around credibility and trust and it does affect people’s behavior as well.

Now I say these things from a point of view of wishing not to criticize, because it’s very easy to throw stones from the sidelines when you’re chucked into a situation that frankly you’re probably ill prepared for … I know what I know about pandemics, which is nothing.

And I suspect that’s much the same as what a lot of the politicians and civil servants knew about it, but they’re the ones that ultimately have got the big responsibility for actually making decisions and taking action.

So I do recognize and respect how difficult it will have been, but equally it’s about what lessons we can learn, isn’t it, rather than criticism per se. And I like to think that as with all of us in all walks of life, we can all do better second time around. So hopefully if we ever face a situation similar to this again, then everyone could do better and learn some lessons from this time where communication and leadership is concerned.

David Scarlett:

So, how has this affected you?

Michael Smith:

I think in terms of the coronavirus specifically, it did have implications for the business and for the team, clearly, like every other planning firm. And I mean, we were lucky, to be fair, compared to a lot of businesses out there of all sorts.

We had a much easier time of it than many have

But equally, I think the strength of our team came shining through. I think the fact that we’ve built decent infrastructure over the years really helps. We were familiar with working from home. We had the set up to do those things, and the client relationships have remained very strong too.

But again, I think it reinforced the need for regular communication

The importance of the face-to-face aspect, albeit it was done using technology. Speaking to clients as well, so carrying on as normal as best as possible, that familiarity and comfort that comes with clients continuing to receive the service that they’re very used to receiving and have done for years.

Team members still being able to lean on each other, whether we can see each other face-to-face or not. And just basically trying to reassure everyone as far as possible, whether it’s inside the business or relating to matters outside the business, that everything will be fine.

We have the ability to deal with these things, whether we’re talking about internally or whether we’re talking about clients’ investments, for example, when they really did go through quite a troublesome period in March and April. I think it’s just reinforced the lessons that have been accumulated over the years really.

David Scarlett:

So what has surprised you about the skills needed in your leadership during this period?

Michael Smith:

A good question. I don’t know whether anything has surprised me. I think again, it might be more about reinforcement. So I’ve tried to do certain things that might be regarded as taking a lead.

But equally, I think one of the things that’s been reinforced is that good people don’t need managing

So I have less oversight, if you like, than ever, because I haven’t seen any of the team properly for a very long time. And I don’t have a manager mindset at all. I never have. It’s just not me.

I’m making reference to Michael, Gerber’s ‘The E-Myth’, where he talks about the entrepreneur, the manager and the technician.

The team, whilst maybe benefiting from some leadership, actually very little is required, because they actually manage themselves and they run the process. They can be trusted to run the process, and actually they’re better if they are just trusted and left to get on with it.

David Scarlett:

What does that suggest to you about your own journey from technician to this role of CEO? What has that meant for you?

Michael Smith:

This is an interesting one in a way, because I didn’t have a journey necessarily from one thing to the other. So my particular story might be a little bit different to some in that it wasn’t a chapters thing for me, so I did a few years of being the technician, and then I flicked over the page and then the next chapter is all about me being a leader. It ran in parallel with each other.

I set up in business at 25, and completed my first acquisition at 26

I didn’t start my first proper job in the world of financial planning. It wasn’t until I was 23. So I didn’t go into it straight after uni. I went traveling and so on. So there was only a two-year window where I was just doing the technical work. I didn’t have any particular responsibilities from a leadership point of view. So from that point of view, it’s always been something I’ve done in parallel with the technical work.

It’s more about a change of focus as the time has gone on. So the dial has moved from more pointing towards the technical work and now more towards the leadership side of the role as other team members have taken over some of the work that I once did.

David Scarlett:

Describe, if you would, the team. How is that structured? How does that report to you? How does it look?

Michael Smith:

So the team’s in a bit of a state of flux actually at the moment, because, as is the way it should be, progress is happening. So we’ve got paraplanners that are completing their journey into being planners.

Essentially we have, I suppose, me as Chief Executive Officer, Geoff Husaunndee as Chief Operating Officer, and then we have two financial planners plus two paraplanners (that really should be described as financial planners now). And then we have two paraplanners (that were four paraplanners). And then we have four client relationship managers, as we call them, administrative day-to-day type activities that they perform. So we have a fairly well-balanced team.

It’s a pyramid in nature, if you like. It’s pods, but it’s not hierarchical. We don’t have a hierarchical structure at all, which I’m very keen on.

David Scarlett:

So that’s what’s developed from when you founded the business?

Michael Smith:

I set up in business and Chamberlyns was the first business that we bought. There are a dozen of us.

David Scarlett:

What have been the biggest challenges for you as the team has grown?

Michael Smith:

There’s general challenges and then there’s specific challenges.

So in terms of general challenges it all came at me, I guess, quite quickly, and I had to learn very much as I went.

I’ve got two young daughters. They’re nearly eight and six. And they say things to me like, “Dad, when I grow up, I want to be a such-and-such,” so it might be a firefighter or a hairdresser or a cricketer.

And while they’re not affected by those self-limiting imposed beliefs that we develop and are subject to as adults… So Ellie doesn’t talk about being a fireman. She talks about being a firefighter. Naomi doesn’t talk about being a hairdresser because that’s a girl’s job. They don’t think about cricket being a man’s sport. They also don’t talk about being a leader.

So no one wakes up one morning and determines and declares that that’s who or what they want to be. People become leaders and have all sorts of backgrounds and intellectual make-ups and personalities and so on. So I think it wasn’t a case of I had leadership training or whatever.

It was just something I did. So that was a challenge, I guess

In terms of migrating from technician to that role, it was things like in the early days, we genuinely didn’t have the infrastructure for me to just step away from the technician role.

I had to put the infrastructure in place bit by bit. I think also I am quite a perfectionist, which meant that there’s this reluctance sometimes to let certain things go. I think the technician in me does like the work as well. And actually the introvert in me tends to favor a small number of fairly deep relationships. So in other words, I’m loyal and caring towards other people that I’ve become close to.

So I didn’t necessarily want to see clients less

Another thing is, from a business owner point of view, a lot of business owners have a high degree of control-freak DNA. To be clear, for me, that’s about outcomes and it’s not about people and every last detail of processes or workflows.

As I’ve said, I don’t have a manager mindset at all, but letting go of control of the technical detail of the work, as well as leading client relationships, wasn’t always easy. You transition by retaining control the orchestration and oversight, which is fine, and then you gradually let go of that from a client work point of view. And then it’s focusing on orchestration and oversight from a more strategic, business-led point of view.

David Scarlett:

And the most difficult of all of that has been what?

Michael Smith:

What comes to mind here actually for me is there’s a quote by Darwin Smith, who used to be the CEO of Kimberly-Clark, the paper people. He said that what he did was he ‘never stopped trying to be qualified for the job’.

I guess there’s an element of that for me, whether you want to call it imposter syndrome, you’re pleased, but not satisfied, it’s that sort of thing. So the difficulty is, I suppose, feeling happy that you’re doing a good job. It’s letting go of certain things. It’s focusing on the things that you know you ought to focus on rather than what you might like to.

You think about Eisenhower’s decision-making matrix, urgent versus important, all that. It’s a whole combination of things that I guess if I look back on, I found a challenge, and still have to think about and grapple with, and probably always will do, I guess.

David Scarlett:

And I wonder what your style is, Michael, in engaging and involving the team in a lot of your strategic responsibilities. How do you do that?

Michael Smith:

Oh, it’s very much a collegiate approach that we take. So I mentioned a moment ago that it’s a very non-hierarchical structure. And non-hierarchical is not the same thing as there being no leadership, the same as leadership and management are not the same thing.

I very much like to consult the people, the team, particularly those that are going to be affected by certain things, and seek their input before going away and thinking about things and ultimately coming up with conclusions.

But I do like people to have autonomy and I’ll talk about freedom within a framework.

This is a Jim Collins principle, which I think is enormously helpful. So I don’t wish to impose controls or coercion on people, and I do wish to seek their input, and it’s important that they know that it’s valued. And I don’t know whether that’s something that’s particularly different to Chamberlyns, but it’s something that is genuine and heartfelt.

I believe it’s the right thing to do. Part of being a leader is learning from the people that you work with. If you’re not learning anything from them, you’re probably doing it wrong. If you believe you don’t have anything to learn from them, you’re probably doing it wrong as well.

David Scarlett:

That’s interesting. I’d like to just poke that a little bit more. Imagine I’m a listener for the first time to your podcast. How do I see that happening? Is that an informal thing that everybody just understands? Or is there a formal setting for drawing out the best thinking from your team? How does that work?

Michael Smith:

I guess it’s definitely more informal than formal. And I think rather than it being process-driven, it’s a cultural thing, I guess. It’s a knowing, a feeling. So everyone on the team knows that they can put their hand up and talk about whatever it is they want.

There’s a nonjudgmental environment at Chamberlyns, and they know that either they’re going to say something if they feel there’s something they want to say, or that before long, I’m going to ask them something.

I will want their input and their thoughts on something. Big, strategic decisions never happen without consultation to the team, which is one of the reasons, I think, why we all get right behind what we’re doing and we all believe in it. We all want to take our part in executing it.

I’ll come back to the manager thing. I don’t do one-to-ones and appraisals and stuff

I’m not saying they’re not important. It’s just not for me. One of the things that happens a lot is team members will say stuff like, “Oh, thank you for your time.” And I don’t like people saying that particularly. I don’t like people calling me the boss. It might be that I am, technically. It might be then my email footer says that’s what I am, but I don’t see it as, “Oh, I’ve done something that’s particularly special by giving people my time.”

I’ll regularly have one-to-one conversations with team members that will go on for an hour or an hour and a half in just free flows, talking about whatever it is that’s important to them, to the business, to their development, to clients, whatever it might be.

And I’ll do that on a one-to-one basis or I’ll do that in small groups or whatever. So they know this is part of just the way things are at Chamberlyns. It always has been, and I hope it always will be.

David Scarlett:

That’s fascinating. And what I’d love to hear more about, you introduced the phrase just now. “It’s a cultural thing for us,” you said, or something like that. Help us understand more about culture. How have you consciously and actively created this culture of yours?

Michael Smith:

Well, I suppose the only way that I ever felt that we could create a culture, or I could take responsibility for helping to create a culture, so there was building on the good that already existed when we bought Chamberlyns and trying to take the good from other acquisitions we’ve done subsequently.

But if I go right back to the early days, being 25, 27, 29, whatever age I was, clearly, I couldn’t lead from a place of seniority and vast experience. So it had to be something else.

It had to be about capability and credibility and trying to consistently show up and do the right things … authenticity

I think the culture has just been built on the good that already existed, but it’s never really been about me and how great I am. It is about the team.

If I consider, what is it about the culture that maybe is different or something that I can be pleased with, at least, if not necessarily proud of, what do I think that is? I think one big thing for me is it’s about youth and experience. And this is something that flows from the point I just made. So someone said to me a few years ago,

“You’ve had the same amount of experience in 10 years as some people have in 30,” which was quite a startling thing to say to me, but also quite a nice thing too.

And because my journey started from having to do everything from a young age, and believing in that principle that if you’re good enough, you’re old enough, I’ve always wanted that to flow through the DNA and the culture of Chamberlyns.

It’s about youth and experience. It’s no good saying, “Well, I don’t know what I’m talking about, but it’s okay because I’m young,” in the same way as it’s no good saying, “Well, the whole team’s two years away from retirement, but it’s okay because we’re really experienced.” That doesn’t make any sense either.

David Scarlett:

Right. If I was to sit with one of your team, which I frequently did with my executive clients, and just ask them the question, “Tell me about the values in this company. What’s the belief system?” What do you believe they’d say to me? That’s a tough question.

Michael Smith:

It is a tough question, but I hope what they would say is things like excellence and continuous improvement. So we want to be good, but we always want to be getting better.

Ken Blanchard who wrote The One Minute Manager, he talked about catching people doing things right. And I love to do that. I love the good outcomes, the good effort and intent, and highlighting and praising those things when we find them. I think that’s the culture and values thing. I think belief and humility. So we know what we believe. We know why we go about things the way we do, but equally we want to be open-minded. It comes back to that continued improvement. And again, we’re not necessarily evangelical about certain things. We still want to continue to learn and still believe that others are better than us and so on.

I think sensitivity and integrity. So this is things like always telling the truth, even if it means awkward conversations are required, even if it means potentially jeopardizing a relationship. You need to find an empathetic, sensitive, professional way of having conversations with clients, but you mustn’t back away from telling people the truth that they need to hear. Dependability and fun, I think, are also things that are important. So I often say that you can hear often coming from one of our meeting rooms is laughter, which I think is great. But alongside that, it actually has to be dependable. You have to be delivering a quality service. It’s like, to use a car analogy, you want it to be an Audi and an Alfa Romeo. It needs to be dependable and work, but you want it to be fun and nice to look at as well.

I hope if you spoke to anyone in the team and said, “Well, tell me about the sorts of things that you think define the values, the standards, the culture and ethos of Chamberlyns,” I hope some of the words that they would use are those sorts of words that I’ve just described.

David Scarlett:

So what I love about that is I was hearing, as you went through the sets of beliefs, the paradoxes. You seem to be balancing, as entrepreneurs and leaders often do, opposites. What’s seen as opposites, but actually balancing them to make a whole. Is that how you thought it through? Is that what you’ve learned?

Michael Smith:

It’s a combination. Absolutely right, absolutely right. And I think it’s a combination of things that I happen to believe, but also the learning that I’ve done and the merits of trying to always see things from a balanced, rounded perspective. I do believe that there is value in that also, I suppose. It’s one of those things you learn when you’re… So I did history at university and one of the key parts of that is creating balanced arguments, understanding the weakness in your position and being able to articulate it and account for it, but still coming out with overall a conclusion. It’s things like that. So yes, absolutely. That’s something I believe in, but it’s also something that from a number of places I’ve learned.

David Scarlett:

And what’s also come out and come through many of your comments is, “I read about this in when I was studying Jim Collins, I read about that studying Ken Blanchard.” So that leaves me wondering. Michael, I’m wondering who have been your greatest influences as you’ve developed in this role?

Michael Smith:

Yeah, so I think influence is definitely a word, and this is a good time to acknowledge the influence that other people, other institutions, have had on me. So I suppose it’s direct and indirect. So if I think about directly, two people particularly come to mind. So there was Ian who founded Chamberlyns. And I guess what influenced me with Ian was it was about a way of doing and thinking and acting and delivering financial planning and looking after clients. And he was one of that Paul Etheridge cohort of planners that really started to change the way things were done in the UK way back in the 1980s. And I got a huge education from Ian. Again, a very fortunate time when I was young to receive it. And I suppose what I ultimately developed from that was it gave me a great foundation from which I could then layer up my own growth and development as a professional and ultimately some more responsibilities for running a company and for leading.

So Ian certainly, and I think also I would say Brett Davidson. So Brett, again, lucky enough to work with him, a great point on the journey and he helped with things like the vulnerability. So Brené Brown talks about the importance and the benefit of rumbling with the vulnerability, as she calls it and she’s so right. Showing where the weaknesses were, helping me to realize how I could improve in a number of areas. And I’m actually in Brett’s case, he probably doesn’t realize what some of those things were, because while some of it did come from direct things that we might have been working on, actually a lot of it came from what I observed by being around him. And I would absolutely give him credit for those things.

So while they’re the direct influences, if you like, the indirect influences, like you mentioned a minute ago, it’s people that I’ve been lucky enough to spend time around or hear from on the one hand. So I mentioned Paul Etheridge from the planning community that definitely influenced the way I do things. The IFP, people like, Tim Hale and David Jones at Dimensional.

Again, I met David when I was 26. It was about six weeks before we completed the acquisition of Chamberlyns. and I’ve always got on really well with him. He was a great person to meet at that point on my journey. Now the things that he’s gone on to, your average 26-year-old probably would struggle to get a meeting with David now. So that’s just blind luck on my part. But all sorts of people like him … Doug Carter and Barry Levalley and Dan Sullivan.

But beyond that as well, you talked about the reading thing. And in the leadership context specifically, it’s things like your thinking, beliefs and behaviors have all been influenced by great teachers that I’ve never met:

  • Dare to Lead by Brené Brown
  • The Effective Executive by Peter Drucker
  • Good To Great by Jim Collins
  • The E-Myth by Michael Gerber

It’s such a cheap and impactful education.

I have no idea why anyone wouldn’t take advantage of it. So yeah, a lot of this stuff, as ever, is not original or unique to me. It’s things that I’ve picked up, either deliberately or by accident, consciously or unconsciously. As the saying goes, good artists copy; great artists steal.

I’ve unashamedly stolen and leaned on the wisdom. I’m quite into stoic philosophy. So the whole point of that is it’s about taking the lessons and the answers that wise people from 2000 years ago figured out. So none of it’s particularly down to me. It’s all about what I’ve picked up along the way.

David Scarlett:

Two of the characteristics and qualities I learned were humility and courage. It seems to me that those of you that I’ve interviewed in this Inspiring Leadership podcast all seem to have had the humility to ask themselves the question, how can I change? And the courage to go and seek mentorship, influence, all over the place in order to answer that question.

So thank you for that. Two questions before we conclude, Michael, and thank you very much for your time today, because I know you’ve got a lot on your plate, whether you’re working remotely or not. Incidentally, why were you so ready for remote working? That’s not one of the two questions.

Michael Smith:

Well, I guess it’s because we’ve always, for as long as I can remember, years, been very happy with the principle that the team should have the flexibility and freedom to work from home. Particularly on Fridays, but often it would be other days in the week. Again, it comes from that lack of a need to manage and to control.

Good people don’t need that, so that’s who we’ve tried to surround ourselves with. And also being prepared to spend the money, to put the infrastructure in place, I guess. I guess simply they’re the reasons why we were ready to hit the ground running with this stuff. And I feel very grateful that we were ready to hit the ground running with it.

David Scarlett:

Thank you. And that would encourage some people to think about the future a little bit more carefully. So the two questions were, if I can remember them in the right order, the profession. Whether it’s you or your ideas, how would you like to influence the profession over the next five years? How would you like to see it changing?

Michael Smith:

That’s a good question and goes right to the heart of something that actually matters to me and has always driven me along. I would like to make a positive difference.

For me right now, there’s three areas in which I would like to make a positive difference and feel like there’s a chance I can. So in the years gone by and up to this point and looking ahead, one of those has been via Chamberlyns, via that work that chartered and accredited firms would do out there looking after clients. Developing new entrants to the profession, all that stuff.

I think the future’s great for financial planning, and why shouldn’t it be? Done well, it makes a meaningful, positive difference to people’s lives. And the reason I think that is not just because I’ve read a book that tells me that. I think that because I’ve seen with my own eyes the difference it makes to people. So through Chamberlyns, through proper planning is one way I would like to make a positive difference if I can, in our own small way.

Another way is something that I’ve been working on in collaboration with a few others. And this is quite early to talk about this, but I think I will because it’s just happened to have come up.

One of the things that again has been happening on the inside of Chamberlyns for a number of years now is helping clients to deploy their capital in accordance with their values.

We talk about this being something around which financial planning should be formed, so the client’s goals and values. And if you have an opportunity to help clients deploy some of their capital in accordance with their values, from a financial planning point of view, I think this is something you simply must be trying to look to embed in your processes and in your business, if you believe the things that I believe and lots of others say that I believe.

So I’ve been working on a project with a few people from different backgrounds that basically share the same mission, to try to create a service that helps planners to embed the ability to help clients invest in a genuinely impactful way that they can trust and have confidence in.

They can be professional buyers of this service. It doesn’t revolve around being a professional seller, all that stuff. And that hopefully we’re going to launch in the autumn. And I would love for that to be a success, because I think it’s so complementary to what proper planning should be all about.

And then there is a third way as well.

And again, I’ve had preliminary conversations with someone who’s well positioned to help to bring this about. And I probably shouldn’t say too much about it, but it’s ultimately about helping planning firms to thrive to the greatest of their ability. And it’s about helping clients to receive the most comprehensive, joined-up service that is possible, and that clients actually need or want, because I think that’s a big weakness in terms of the service delivery and offering of planning firms at the moment.

And there’s a number of reasons for it, but if I could make a dent in three ways over not just necessarily 5 years, but hopefully long enough to make it more like 20 or 25 years, they would be three ways that stand out for me as something I would love to do and I will certainly have a go at. Even if it doesn’t work out, I’ll certainly try.

David Scarlett:

My goodness. So is it possible to just briefly summarize those three ways again, for those listening to this?

Michael Smith:
  1. The first is around the work that we do as planners in terms of making a difference to clients, helping other planning firms to progress, if we possibly can, helping bring new entrants into the profession and trying to give them a journey through, to help them benefit from some of the things that I was able to benefit from from a really young age.
  2. There’s also the ability to embed impact investment into planning firms and help to make a positive difference out there in the world, but also help in the individual clients, individual planning firms, because this is both a bigger problem for them at the moment in terms of being able to do it with confidence and credibility and so on, but also it’s a big opportunity. So I think this could make a big difference. It seems a virtuous thing to try, and I’m really looking forward to what we’re going to launch hopefully in the autumn.
  3. And then the other way would be… Again, I don’t want to say too much, but it’s ultimately about connecting in a proper, thought-through way that everyone can have confidence in. Professional firms, accountancy firms, planning firms, and possibly law firms as well. So connecting the right people together so that everyone can have confidence in it and understand the way each other work that the clients can ultimately benefit from. It’s that multidisciplinary practice thing. But helping each of the key players in that understand what good looks like, helping them to hold each other accountable, foster and develop those great relationships, and ultimately lead to better outcomes for clients in terms of the quality and the pricing and things like that. So that one’s the next big project for me, if I can manage to get working on it after the impact investment project.
David Scarlett:

Wow. Do you know what? I think it was a great place to conclude. That’s exciting. The future, rather than necessarily the things you’ve learned in the past. They sound really powerful to me. And I’m sure those listening to this will be intrigued to find out what on earth does that really mean? What does that look like? So I’m hoping those that have listened right through to the conclusion of today will be watching you very closely and hopefully joining you in that mission to change the face of the industry, to change the way it’s viewed and how it works. Michael Smith, CEO of Chamberlyns. Thank you very much for joining us today. I appreciate you taking time out of your busy business to impart some hope and some guidance to those yearning to be better leaders.

Michael Smith:

Thank you. Thank you very much. I’ve enjoyed it. Hopefully it’s of some small help in some way. And thank you for having me on. It’s been great.


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