Cresset's Susie Cranston on Aligning Passion, Technology, and Leadership to Scale a Multibillion-Dollar Firm

Guests: Susie Cranston, President and Chief Operating Officer of Cresset, a family office RIA firm with more than $50 billion in assets under management. Susie oversees Cresset’s Wealth Advisors, Client Service, Operations and Compliance.

In a Nutshell: In Life-Centered Planning, advisors encourage their clients to think about what their money is for. That’s a question that advisors should also ask themselves as they think about the future of their firms. Your passion for the business and the quality of service that you’re delivering have to scale along with the size of your business. Otherwise, what’s all that hard work — and AUM — really for?

On today’s show, Susie Cranston shares her insights on the essence of great leadership, including why servant leadership is is one of the best models for a professional services firm. Susie also talks about why many of the most successful leaders have aligned their careers with their personal passions, the role that positive psychology plays in how you react to the world around you, and navigating the key inflection points that all firms face as they scale.

.Susie Cranston and I discuss:

Lessons on connecting passion and leadership from Susie’s 20-year career, including interviews she conducted with leaders from all over the world for a book she wrote at McKinsey & Company.
Why Susie believes in servant leadership and positive psychology.
How Cresset maintains and coordinates its “minihubs” all over the country.
Evolving from a worker who does the job to a leader who gets the job done through effectively managing other people.
Syncing growth targets with tech implementations — without disrupting the client experience.
The importance of owning your own data.
Empowering advisors to serve their clients their way.
The Rule of 3X and 10X for building support systems at key growth points.

. Quotes:

Susie Cranston on the strategic power of culture:

“I really believe that servant leadership is the best way to lead an organization like Cresset. And as I think about what comes next for Cresset and what we’re going to focus on, I think that the secret sauce is always the culture. I’m a big believer that when people come to work every day happy and energized and excited to do their part for the organization, that is where the magic happens. And, as a former McKinsey strategic consultant, I would even go so far to say that I think culture is more important than strategy. Cresset has been successful because it’s built an extraordinary culture and the co-founders have really done a magnificent job of holding the bar, making sure we bring on people that share that sense of culture and that importance of putting clients first. And first and foremost, maintaining that as we continue to grow is a really important piece of this.”

Susie Cranston on technology vs. process:

“I think it is a very common mistake in our industry to say that technology will solve a problem when actually the process is what needs to be solved. So it’s very easy if a process is chaotic to say, ‘Oh, we just need to automate it.’ But what I think people fail to realize often is that technology is the hardening of process. So if we say we’re going to automate how to open new accounts, that means we’re going to take all the steps that people take today manually, and we’re going to make those forced steps that everybody takes in lockstep. And so what happens a lot of times is three people on the team are actually opening accounts in different ways. And if you’re opening an account in three different ways, which one do you choose to code into the technology? And what happens on a larger scale is, let’s say you’re a hundred different teams and you’re automating the new account-opening process. If you do that in a way that only one team likes, it can be a real disaster and kind of a waste of money. What you need to do first is say, ‘What is the single approach that we all want to take for how we open accounts?’ And then that should be the technology that you automate. I completely agree with the observation that process is often the heart of any technology failure because the hard work wasn’t done up front to align the process before you tried to automate.”

Susie Cranston on preparing your firm for the future:

“My ultimate conclusion, coming out of the last 10 years, is that the financial needs of family offices are going to be best served in the RIA channel going forward. Part of why I say that is that the banking industry is getting increasingly regulated; it’s always been highly regulated, but the regulatory environment is not slowing down, and if you look at what family office clients need, it’s going to be challenging for some of those needs to be serviced by banks. For example, banks can’t handle all the taxation pieces. They can’t do certain parts of the alternative management process if the alternatives are not part of the bank’s offering. I think that there is an evolution going on around where these large families are going to get their services in the future. I think one lesson is that we’re going to see movement out of some of the traditional, more bank-affiliated investment shops into the RIA space, and that the services that clients are going to want are increasingly how firms will differentiate and compete. I think another lesson that I took away from the last decade of my career is that clients don’t always see the investment piece as differentiated. It’s a table stakes item. You have to have an incredible investment platform. That’s absolutely the case. And you have to do well at the investing piece. But what differentiates a lot of firms is the service that’s provided on top of that.”