How does the leadership team at your firm feel about failing?
I hope they embrace it. Failure can play a central role in shaping future success.
Silicon Valley runs on failure. Every successful tech company, including behemoths like Facebook and Google, nurtures what is known as the “culture of learning.” This corporate mindset encourages teams to think freely, develop ideas without limits, and take chances.
These businesses view their teams’ inevitable failures not as a loss or a negative, but as a chance to try again with more data, insight and experience. Similarly, when considering a possible tech investment, venture capitalists often view the entrepreneur’s previous business failure as a positive; as a valuable learning experience.
The financial advisory industry needs to adopt a similar mentality. If we are going to survive the challenges of the future, including increased competition and heightened service expectations from clients, we need to get comfortable taking chances, failing and learning from our missteps.
I suspect some of our collective aversion to failure comes from our natural and healthy prudence regarding our client work. We don’t want a family’s investment portfolio to be any sort of learning experience.
But when it comes to our internal operations, including technology and processes, a culture of learning will serve us well. Engaging in a constant cycle of trying, failing and trying again is critical to developing the tools we need to meet higher client expectations with an efficiency that will protect our margins. Our clients will increasingly demand the instant gratification they receive from other businesses in the internet age. That means, among other things, immediate responses from their advisors and rapid, easy access to requested documents and information.
I have no doubt our industry can meet those expectations, if we can set aside our complacency and fear of change. I too often hear colleagues argue that their firm’s practices are legit because “we’ve been doing it that way for 20 years.” Can you imagine someone at Amazon saying that? Without getting fired? Another common objection to change and innovation is fear that a new process or technological solution will go sideways and upset a client. Well, yes, that could happen. But screwing up a video call meeting with a client isn’t on par with missing their retirement goal. A process mistake or tech hiccup is an inconvenience. The client will forgive you, especially if you have built a strong relationship with them.
In fact, your clients will do more than forgive you. They will appreciate your efforts to improve their experience through innovation. Adoption of client portals, text messaging, and video interaction platforms such as Facetime will all make life easier for your clients. And rest easy – they already know these modern wonders come with glitches.