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Reinvention: Why It’s Required to Drive Lasting Success

Do you want your business to outlast you? Some advisers set this goal when they design a firm. For others, the focus comes as they anticipate transitioning their business to a new generation of ownership when they approach the end of their career.

There are no universals when it comes to timing for the business life cycle. The life cycle is the pace at which a practice evolves from inception to growth, maturity and eventually a final stage of decline. If there is no intervention to reinvent the firm, the natural life cycle of the business will rule. The length of each phase is unpredictable. For example, growth can come in a year or develop over many years. But is there a universal requirement for creating success that will endure? Yes. It’s the willingness to reinvent your business.

What Does Reinvention Require?

Reinvention requires a magnitude of change that ushers in an entirely new approach to doing business. For example, the introduction of the robo-adviser created a radically different way to work with clients. No matter what you think of this technology, it was radical enough to disrupt the industry. Since “robo-advice” was introduced, it has been continually improved. Today, the digital approach has morphed to add human service components. In turn, advice given by human advisers has shifted to include digital components. Another client-centric reinvention is the growing interest in responsible investing, as advisers respond to client demand by integrating environmental, social and governance factors into investment decision-making. These are only two examples of reinvention, but they demonstrate its essence: major transformation in response to market forces and industry changes.

Beyond Continual Improvement

Reinvention differs from the concept of continual improvement. Many advisers rightfully believe their business is improving all the time. Improvements may include streamlining the way data is collected from clients, implementing enhancements to customer relationship management, adopting new technology, updating forms for greater efficiency and enhancing internal communication. Although continual improvement is needed to run a solid business, it’s not as radical as reinvention.

Timing Is Everything

Every business is different, but one thing is clear: reinvention is essential long before a practice reaches the decline stage. If one waits that long, it will be too late to save the business. The faster the pace of industry change, the greater the need for reinvention. As such, an adviser needs to be prepared to reinvent his or her practice. In fact, it is likely that radical change will need to happen multiple times to keep a firm in the growth stage. The greatest danger is waiting too long to begin the reinvention process. Maturity can be a long or short phase. This means that strategic shifts should be part of every firm’s business planning process.

Is Age a Factor?

It isn’t a factor for everyone, of course. But as advisers age, some understandably do not embrace change with the same enthusiasm of their younger years. Many advisers keep all their energy focused on their next client meeting. Why stir the pot with worries of reinvention when business is good or when an adviser is moving to a lifestyle practice? Most advisers love meeting with their clients. The responsibilities of being the CEO and running a business pale in comparison. But if advisers lose passion for leading their business, it’s not likely that they will be leading the reinvention process. To guard against unforeseen problems, advisers entering the home stretch of their careers need to incorporate additional focus on strategic direction as part of the business planning process.

Nurturing the Life Cycle of Your Business

Some advisers might think that reinvention—a change of magnitude—is not possible due to the constraints of industry providers and government regulations. I believe that, despite these limitations, every adviser is empowered to adapt to change and adopt new tools, technology and practice models at every stage of a career and the life cycle of a business. The key is to embrace reinvention to keep the firm in the growth stage.

Joni Youngwirth_2014 for web

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network in Waltham, Mass.


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Learn to See Yourself Clearly Through the Johari Window

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Michael Futterman speaks at a general session at last month’s FPA Retreat.

When I’ve watched Phil Jackson coach basketball teams, it always struck me as significant that Michael Jordan didn’t go that route. Jackson and Jordan had great synergy and Jordan offered so much guidance to the Chicago Bulls.

Then again, it’s easy to attribute positive qualities to professional athletes. These hard workers are usually filled with a drive for excellence, they work well around people with a shared intensity, they have a unique ability to thrive under pressure and they condition themselves to rise to challenges.

Many of these skills helped my client, a former professional athlete, become a successful adviser. Branch management recognized his growth and recommended he take on a partner and two or three junior advisers to further grow his business.

Unfortunately, not every athlete is meant to become a coach. Being good at something doesn’t mean you are good at teaching it. Tragically, many skilled people fail to see the limits of their capability. As we train clients to build superior teams through the Knowledge Labs™ Elements of Extraordinary Teamwork, we often find that a healthy dose of self-awareness can help put people on the right track to working better with those they need to help grow their business.

A few short months later, I sat in my client’s office listening to him express frustration and anger with his junior advisers. Exasperated, my client said, “I emailed how I do it! I don’t get what’s so difficult to understand!”

What is the Johari Window and How Can It Help?

As I listened to my client explain the problems at his office, I realized a tool called the Johari Window would have come in handy before the new staff members joined his team. Created by psychologists Joseph Luft and Harrington Ingham, the Johari Window is composed of four quadrants:

The open quadrant: things you know about yourself and peers know about you. The open quadrant contains obvious or explicit information. Although it’s helpful, this material can obscure or influence the information in other quadrants. For example, one might see my client, a successful adviser, and assume he will be adept at training junior advisers.

The hidden quadrant: things you know about yourself that other people don’t know. Based on his background, branch management felt my client would be comfortable engaging in the journey that growing a new team often requires. I asked a couple of questions and learned something my client knew, but his peers didn’t.

I asked him why he chose to email directions to junior advisers, instead of talking with them, and he revealed that he felt sitting down and walking them through things step by step is frustrating. “Do you always get frustrated when you’re teaching people?” I probed.

“Yes. I had to get my son a math tutor because I get angry if he doesn’t pick things up fast enough,” my client said.

This response gave both of us insight into something we hadn’t recognized, but I’m sure his junior advisers were privately frustrated by every day—his unapproachability. The Johari Window model refers to this quadrant as a blind spot, which means your peers know something about you that you don’t know about yourself. While branch management might have quickly realized he was overmatched in the role of leader or coach, the client’s pride and quick temper made it difficult to tell him that.

My client is a great team player and highly motivated self-starter, who never had a management role. The fact that no one knew he would be poorly suited for the task illustrates the last quadrant of the Johari Window, the unknown.

Unknowns are things that neither you nor your peers know about you. The value in developing greater shared awareness is that it allows us to more quickly address the unknowns when they come to light. Creating strategies to increase illumination of the blind and hidden quadrants is our goal.

In this case, my client’s partner became responsible for the day-to-day people management, so my client could focus on his other strengths. Developing self-awareness before you bring on new team members is key to understanding what kinds of personalities work best in your office. Additionally, seeing yourself clearly in a situation can help you determine if your message and your method of sharing it are effective for your team.

In my client’s case we used the Johari Window to help us discover that being a great adviser comes as naturally to him, as being a great basketball player came to Michael Jordan. But the Michaels around us need self-awareness to help the team thrive.

Editor’s note: This blog post originally appeared on the Janus Henderson Blog. See it here. Michael Futterman will also present a Knowledge Circle webinar “How Self-Awareness Impacts Team Functioning,” on May 30 at 2 p.m., EDT. Mark your calendar or simply join the Zoom meeting at that time. A workbook for the call is available also. FPA members can download it here.

Michael Futterman

Michael Futterman is an assistant vice president, Knowledge Labs™ Professional Development at Janus Henderson Investors. In this role, Futterman works with the Professional Development team on research and curriculum development for the professional development programs. He is a frequent speaker and coach to adviser and client audiences. Futterman leverages his experience with Outward Bound, management consulting firms and the financial services industry to bring innovative, engaging and thought-provoking content to his clients.

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The Science of Systems: 3 Steps to Develop a System

As a financial adviser, it can be easy to lose sight of what you are doing during the day due to constant interruptions, market fluctuations and your regular day-to-day operations. Oftentimes the day unfolds, you get busy and before you know it, hours have passed. It’s important to take a moment or two each day to track what to-dos aren’t getting regularly accomplished or obstacles you are encountering and evaluate how effective your present systems are in handling them. Ask yourself, do you run your business or does your business run you?

Most financial advisers don’t take the time to analyze what I refer to as “the science of systems,” which defines that every task you do should have a system assigned to it and that all systems need to be constantly refined in order to produce consistent positive outcomes. The vast majority of advisers use a “wing it” approach, which is a recipe for disaster. In order to obtain your goals, you need to optimize your systems and not leave your business success up to mere chance.

Author Orison Swett Marden says, “A good system shortens the road to the goal.” But, what if you don’t have a system for creating systems? If so, use the following steps to develop any system.

Step 1: Determine Point “A”

Point “A” is simply a description of what you are currently doing or where you currently are in any particular facet of your business.

When I was a rookie adviser, I wanted to branch out and try seminars as one of my primary forms of prospecting. At that time, my Point “A” (current activity) was doing about three seminars a year—maximum. As a result, I was only earning a small percentage of my new business utilizing this form of prospecting. I had heard that other advisers in the office had built successful businesses via seminars, but I didn’t know how to manage an effective seminar system on a larger scale. I did, however, know that I needed help.

Step 2: Determine Point “B”

Point “B” can be described as where you want or would prefer to be. In other words, it’s your end goal.

In this case, my Point “B” was to have 10 seminars a year. That was a lofty goal, so I decided to find out what other successful advisers—both in my direct office and the company as a whole—were doing. Surprisingly, I found a few advisers who were reducing their overhead costs by offering their services to associations and corporations as a keynote speaker at their events. This gave me new insight into how to obtain my goal.

Step 3: Re-engineer the Steps

The final step is to map out an updated system. Ironically, what I have found with any system is that it’s best to actually begin with Point “B” in mind and map out the steps, but in reverse. Let me show you what I mean.

I knew that it took, on average, about six weeks from start to finish to market, coordinate and plan to put on a seminar. So I grabbed a calendar and circled all the first Tuesdays of a month, excluding the three summer months and December. That left me with eight seminar dates. Next, I backtracked what specific items I needed to be sure had to happen in weeks five, four, three, two and one, and I put those into my contact management system. Then, I determined that on some weeks I had to work simultaneously on various steps for multiple seminars, since there was overlap with back-to-back months. In addition, I added in prospecting to associations and corporations to see if they needed a keynote speaker so that I could add at least two additional seminars during the year for free. Lastly, I set up my time to work on my seminar system to be at the same time each week so nothing slipped through the cracks. I did 10 seminars that year.

Why the Science of Systems Works

The reason why the “science of systems” works is because you have a repeatable process for attaining goals. I realize that this line of reasoning may sound simple—and in essence it is. We tend to make things harder for ourselves when simple solutions exist.

If you would like a free coaching session, email Melissa Denham, director of client servicing.

 

Dan Finley

Daniel C. Finley is the president and co-founder of Advisor Solutions, a business consulting and coaching service dedicated to helping advisers build a better business.