Posts Tagged ‘Harvard Business School’
Monday, December 3rd, 2012
Harvard’s #1 Strategy Guru: “The key decision to make your business excel”
Monday, October 29, 2012
by Dan Richards, ClientInsights.ca
Competition has brought many once-dominant names to the brink of survival– think General Motors, Kodak, Sears and Xerox. There’s an important lesson here that advisors ignore at their peril.
“For your business to thrive, you shouldn’t compete to be the best. Rather, you should compete to be unique.”
That was the key message delivered at a recent talk by Harvard Business School’s Michael Porter. The author of 18 books on strategy and six-time winner of the award for best Harvard Business Review article of the year, Porter is today’s undisputed leading voice on competitive strategy and positioning.
And he had an important message for financial advisors.
The flaw with being the best
Porter began by addressing the flaws with the goal of being the best, a notion popularized by former General Electric CEO Jack Welch, whose dictum was to exit any business in which GE couldn’t be number one or two in market share.
Porter presented a different view. The notion that you have to be the best comes from the world of sports and war, where there is one winner. The problem with that “winner take all” mindset is that the field is littered with the losers, with only one winner emerging. The battle to be the best also leads to a focus on operational excellence, where businesses strive to out-execute, doing the same things as their competitors, only better.
There are two big downsides to this approach. First, given the growing focus on industry “best practices”, this can be a difficult strategy to sustain over time. And second, focus on operational efficiency alone can lead to a downward spiral of price competition as firms try to squeeze other entrants by capitalizing on their lower cost structure.
In Porter’s view, a better analogy comes from the performing arts, where you can have many outstanding entertainers and actors, each building his or her own distinct audience. And by having multiple performers thriving, they expand the total audience as a result.
And he pointed to retailing, where it’s possible to have successful companies as different as Walmart and Costco on one hand and Tiffany’s and Coach on the other. The thing that successful retailers have in common: They have homed in on a distinct audience.
The problem with IKEA
Porter used IKEA as an example, a company on everyone’s list of retail success stories
But Porter hates IKEA – he hates the long drive to get to their stores, the huge parking lots, the unending winding trek inside the store with no ability to cut it short, the lines to pay, the trek to get the furniture home and then the hassle of assembling it. If it was up to him, he would never set foot in IKEA again..
But when his daughter was a university student in Washington DC, she loved IKEA — whenever he visited her during his trips to Washington, she asked him to rent an SUV so that they could make an IKEA run for her apartment.
Porter’s point: IKEA isn’t concerned in the slightest that he hates shopping there, because he’s not its target consumer. What IKEA cares about is that it’s put together a unique value proposition that appeals intensely to his daughter and her friends – because they’re the audience it’s targeting.
“Are you Sears or are you Target?”
The advantages of having a narrowly targeted audience are indisputable. Think successful retailers: Unique niche players are the first to come to mind — Apple Stores, H&M, Lululemon and Zara. Even within the realm of mass retailers, look at the success stories of upscale entrants Bloomingdales, Nordstrom, Target and Neiman Marcus at one extreme and lower end retailers such as Winners and dollar store leader Dollarama at the other. These each deliver a unique value proposition to a targeted audience – and present a dramatic contrast to the struggles of Sears and JC Penney in the U.S. and the Bay in Canada that cater to everyone and have strong appeal to no-one.
The problem is that most advisors look much more like Sears than Target — failure to be unique is arguably the biggest thing holding most advisors back. Indeed, when I ask advisors how they’d respond to a prospect’s question about what sets them apart, here are the most common answers:
“our focus on planning”
“putting clients first”
“a disciplined investment approach”
“our conservative philosophy”
While all of these traits are important, the difficulty is that they fail to be differentiating – if everyone uses the same words to describe how they work, nobody stands out.
What you do – or whom you do it for?
Note that all these answers focus on what advisors do rather than whom they do it for. Most advisors are generalists, dealing with business owners in the morning, clients planning retirement at lunch and retirees in the afternoon. That’s because this is how most advisors started in the business – trying to appeal to as broad a market as possible and indiscriminately working with any client who’d have them.
That may have made sense when advisors were starting out – but all too many advisors have failed to evolve, continuing to use the same approach as when they began. In fact today the primary basis on which most successful advisors target new clients is based on minimum assets and price sensitivity, almost never by need. And by trying to serve everyone, advisors are unable to fine-tune their practice to the specific needs of any one unique group.
Three things happen as a result:
1. Advisors fail to develop specialized expertise and operational efficiencies that come from focus and that would allow them and their team to develop a unique, targeted value proposition in their marketplace.
2. Consequently, they fail to serve anyone exceptionally well – and end up with clear competitive differentiation
3. The outcome of which is that advisors struggle to charge a premium price and are unable to build a strong reputation and get word of mouth going for them, the most powerful form of marketing there is.
Getting there from here
The challenge with a focused, unique value proposition is that it entails making trade-offs; to serve one group exceptionally well, you have to decide to de-emphasize other groups.
And Michael Porter pointed out that people resist making trade-offs: “People hate to choose” he said “because in choosing, they focus on what they give up rather than on what they gain.”
Porter finished by summarizing the essence of successful strategy that results in superior performance:
1. By narrowly defining whom you work with and the needs you address, you can achieve competitive advantage within the group on which you’ve chosen to focus
2. As a result, you create superior value for your target customers
3. And you capture some of that value for yourself
After Porter’s talk, I spoke to a Chairman’s Club producer at a bank owned firm who has a traditional generalist client base – but who especially enjoys dealing with successful entrepreneurs and their multiple holding companies as well as complex succession issues. That’s also where he feels that he provides the clearest, most concrete value.
This advisor has no plans to abandon the hard-won clients that currently pay the bills. What he is looking at, however, is a three year plan to shift the focus of the new clients he attracts to concentrate on entrepreneurs. That decision will shape the expertise he builds on his team, how he organizes his practice and where he focuses his networking efforts and marketing investments.
You don’t get to hear Michael Porter every day – his talk was the keynote at an alumni day sponsored by the MBA program at the University of Toronto, where I’ve taught for 20 years. Indeed, one of the other attendees told me he’d graduated from Harvard Business School 15 years ago – and heard more from Porter in his 90 minute talk than he had in the entire two years doing his MBA.
The limited opportunities to hear from today’s #1 thinker on strategy makes it all the more important that you pay serious attention to his message. If you’re frustrated by the failure of your business to excel, consider whether your problem may be that you’ve fallen into the trap of putting too much focus on operational efficiency and being the best — and whether you need to focus instead on being truly unique.
That’s the advice Michael Porter provides to the large multi-national companies that pay his million– dollar consulting fees – and chances are that’s the advice he’d give you as well.
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Tags: Analogy, Brink, Competitive Strategy, Dictum, Downward Spiral, Financial Advisors, General Electric, General Motors, Harvard Business Review, Harvard Business School, Losers, Michael Porter, Mindset, Operational Efficiency, Operational Excellence, Peril, Price Competition, Sears, Time Winner, World Of Sports
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Wednesday, October 24th, 2012
Tags: Anthony Lam, Chief Knowledge Officer, Client Relationship, Co Founder, Common Services, Covenant Group, Everyday Routine, Harvard Business School, Leadership Institute, Minor Details, Morriss, Organization Survey, Product Offerings, Quality Presentation, Service Co, Service Excellence, Service Management, Service Model, Service Models, Uncommon Service
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Wednesday, June 6th, 2012
Many of us have a love-hate relationship with our Smartphone.
We love the fact that it makes us more efficient. We hate the extent to which it has control over us.
But there’s a deeper, more fundamental problem at play here. There are growing indications that for some people, Smartphone’s lead not only to distraction but to burnout and reduced motivation. Ultimately, smartphones can actually reduce productivity rather than increase it.
And it gets worse: A growing number of users’ relationship with their smartphone fits the classic definition of addiction, causing the same outcomes as addiction to alcohol, drugs, gambling or food; obsessive preoccupation, continued use despite negative consequences and denial. Extreme Smartphone use meets another criterion for addiction; immediate gratification and short-term rewards, coupled with delayed negative effects and long-term costs.
Happily, there is a solution. Recent research has unveiled a simple strategy that allows users to enjoy the benefits of Smartphone’s while significantly reducing the negative effects.
Addressing always-on fatigue:
Harvard Business School faculty member Leslie Perrow has studied this issue at length. And in her recent book “Sleeping with Your Smartphone: How to Break the 24–7 Habit and Change the Way You Work,” she describes a successful experiment to address the mental fatigue that accompanies an always-on psyche.
The research was conducted with high-powered consultants at strategy firm Boston Consulting Group, implementing something called PTO; Predictable Time Off. The essence of PTO is to agree to afternoons or evenings completely cut off from work and wireless devices; predetermined blackout periods when emails are neither sent nor read and uninterrupted time periods that allow for greater focus.
Four years later, what started off with one team had spread to 900 teams in 30 countries. The reason, quite simply, is because what happened to key attitudes among participants in the PTO experiment:
As you think about your own situation and that of your team, consider whether predictable time off could function for you in the same way that it did for Boston Consulting Group, both at work and at home. By implementing this one simple strategy, you could become happier and more effective in both your business and your personal life.
And there’s another benefit also, you could avoid being viewed as a “hapless zombie.” A phrase used in a very funny April article in the Wall Street Journal on the impact of the no-smartphone rule at the US Masters golf tournament. Here’s how the article began:
Navigating a no-phone zone:
“Everybody knows that smart phones have inhaled civilization; sure, there’s a certain, breathtaking level of convenience, and Boggle for the iPhone deserves a Nobel Prize, but it’s time to admit that we’re all incurably addicted, that we look like hapless zombies pecking at them all day, and would probably be at least 80% happier if we drove to the nearest bridge and chucked it in the river. We’re losing our ability to socialize and even speak—phones ruin dinners, meetings, weddings and even honeymoons, to say nothing of the deadly crazies who break them out in the driver’s seat.”
“Phones have also sucked energy out of sporting events; you can’t go to a game without seeing hundreds of fans with their faces buried in tiny screens, sending texts and Tweets and taking horrible photos to prove on Facebook they’re actually there.”
Here’s a link to the full Wall Street Journal article:
And click here for an article describing the PTO research:
Tags: Afternoons, Alcohol Drugs, Blackout Periods, Boston Consulting Group, Burnout, Business School Faculty, Faculty Member, Fundamental Problem, Harvard Business School, Immediate Gratification, Mental Fatigue, Negative Consequences, Obsessive Preoccupation, Perrow, Smartphone, Strategy Firm, Term Rewards, Time Periods, Uninterrupted Time, Work Tomorrow
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Wednesday, February 22nd, 2012
Standout success is rare in every industry, including ours. Part of that is just the reality that by definition most companies and most financial advisors are average performers.
But the problem runs deeper than that relating to human nature. Most businesses and most financial advisors start with huge drive and the willingness to take risks. As success comes and businesses and financial advisors become comfortable, however they often lose that drive; as well as the appetite to take even modest and carefully defined risks in their business.
A recent poll of business school professors pointed to Peter Drucker and Harvard’s Michael Porter as the most influential thinkers on corporate strategy. Both Drucker and Porter have written about the tendency for successful businesses to become complacent and resistant to change. I see this mirrored in the reluctance by many advisors to move from the comfortable status quo and to make choices about more narrowly targeting resources and focusing their day.
The importance of making choices
Most advisors start as generalists with an “all things to all people” approach. That strategy can create a base of clients and a level of success that will allow people to stay in the business; but at some point, most advisors using that approach hit a wall.
It’s at this point that I often hear from advisors, looking to sit down to talk about their situation. Even when I suggest they consider evolving their client focus towards a tighter direction that has the potential of dramatically accelerating revenue and profitability, most advisors resist this change. Quite simply, they prefer the security and comfort of their current “all things to all people” approach to the uncertainty of changing direction for a more targeted business model.
The Harvard Business School’s Michael Porter ranked today’s top authority on strategy has this to say: “Strategy is about making choices and trade-offs; it’s also about deliberately choosing to be different.” Making choices was also identified as a key to success by Peter Drucker, widely considered the twentieth century’s leading thinker on business strategy. Among his comments on the topic: “Efficiency is doing things right. Effectiveness is doing the right things.”
The common traits of top producers
In my years in the industry, I’ve spent time with many multi-million dollar producers. These highly successful advisors bring different philosophies and approaches; attack different client segments and utilize a broad range of business models. The one thing that most have in common is an incredibly high degree of focus in their business.
· In most cases they concentrate on a well-defined client base. Whether retirees or business owners, physicians or retiring university professors, CEOs or farmers; the most successful advisors typically bring a singular focus on one or two clearly articulated niches. And often the most successful advisors focus on micro niches; I’ve seen advisors successfully focus on snowbirds, divorced women and owners of Canadian Tire franchises and Toyota dealerships.
· Because they focus their business they can tailor it to the needs of their target group in a way that a generalist advisor never could. They understand the issues and speak the language of their clients; as a result they become the “safe choice” among their client community and become more referable as a result.
· Their focused business model identifies prospective clients and builds visibility among target clients. If you’re targeting car dealers, it’s relatively easy to put together a list of prospects in your community and to identify the association they belong to and the publications they read.
· They have focused policies and procedures in place to deal with prospective and existing clients. They have a consistent process for getting in front of prospects. They also have clear minimums on the clients they’ll accept and a well-articulated process for welcoming new clients once they’ve signed on, and for how they communicate with clients on an ongoing basis.
· They have a clear model on how they’ll run their business; including the role of fee based and managed money business, the formulation of investment recommendations and the role of financial plans.
The reluctance to leave your comfort zone
I’ve had many conversations with advisors about changing their business model or bringing greater focus to their business. While most acknowledge the potential benefits of a more tightly targeted and better defined business, the majority is reluctant to make the leap. Quite simply, the status quo is too comfortable for them to abandon it.
A stand pat approach can work very well in a status quo world, but the reality is today’s world is anything but that. The road is littered with once dominant companies who have been left by the wayside (think about iconic brands like Polaroid and Kodak; or one time retail leaders such as JC Penney or Montgomery Ward).
The difficulty was not that these companies didn’t try to alter course; each of these companies ultimately saw change coming and tried to adapt. The problem was that they waited too late, only embracing change when they were already in decline.
I’m not suggesting that successful advisors are going to go the way of Kodak and JC Penney. Inertia is a powerful force and if you have an established client base that you are serving well and evolve your business gradually over time, you can run a profitable business for many years to come; perhaps the balance of your career. What you can’t typically do with a traditional, generalist approach is to achieve dramatic growth. Advisors with unfocused practices tend to look very much alike. And if you look like every other advisor, differentiating yourself, challenging at the best of times, becomes almost impossible.
I sympathize with advisors who’ve spent 10, 15 or 20 years of hard work to build a successful business and comfortable lifestyle and don’t want to jeopardize it by moving to a significantly different model. The comfort of the status quo is incredibly seductive. In my view, deciding to take an incremental, evolutionary approach to changes in your business so as to reduce risk and stress is an absolutely legitimate choice; no different from clients who want to avoid market volatility by staying on the sidelines.
But just as those clients shouldn’t then complain if their long term returns are lower than investors who took greater risk; advisors who take a low risk approach in their business shouldn’t complain if they’re not growing as quickly as other advisors who have taken a more focused approach.
If you’d like more success, think about Michael Porter’s and Peter Drucker’s insights on how making choices drives successful strategy. And consider whether you need to evolve your business to one that has a sharper focus and clearer direction.
Tags: Appetite, Business Model, Business School Professors, Client Focus, Corporate Strategy, Financial Advisors, Generalists, Harvard Business School, Human Nature, Michael Porter, Peter Drucker, Profitability, Recent Poll, Reluctance, Standout, Tendency, Thinkers, Trade Offs, Will Allow People, Willingness
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Wednesday, February 8th, 2012
Recently, I attended a talk by Fred Reichheld, a long time partner with consulting firm Bain & Company (the same firm where U.S. Presidential candidate Mitt Romney got his private sector experience after graduating from Harvard Business School.)
Reichheld is one of the pioneers in the area of promoting customer satisfaction and loyalty as a core strategy to drive business growth. In 1996, he published The Loyalty Effect, one of the first attempts to rigorously quantify the financial payoff of satisfied customers.
In 2003, he published an article in the Harvard Business Review titled, “One number you need to grow.” In that article, he introduced a simple 12 word question and a resulting measure called The Net Promoter Score that correlate with customer loyalty and can focus organizations on creating higher levels of customer satisfaction.
12 words to measure loyalty:
The Net Promoter Score starts with one simple 12 word question that customers are asked to answer on a scale from 0 to 10. That question:
How likely are you to recommend us to a friend or colleague:
Customers are then put into three categories:
- Promoters: (score 9–10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives: (score 7–8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors: (score 0–6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
The net promoter score is calculated by taking promoters and subtracting detractors; what are left is your net promoters. So, if you have 30% of clients scoring you a 9–10 (your promoters), 50% a 7–8 (your passives) and 20% a 0–6 (your detractors), your net promoter score is 10.
In the US, net promoter scores north of 70% have been attained by USAA in banking, by Costco and by Apple. Other firms using the net promoter score metric to track satisfaction include Charles Schwab, Amazon, Intuit (maker of Quicken), General Electric and Procter and Gamble.
In a presentation at a conference, a senior executive of TD Canada Trust explained how they used the Net Promoter Score in the U.S. and Canada to shift from satisfaction-focus to loyalty-focus. With high satisfaction scores it was hard to identify issues and motivate employees to improve. By moving to a Net Promoter approach using willingness to recommend as the measuring stick, they were able to uncover new issues and identify the best practices of top performing branches. TD is now rolling out Net Promoter throughout the bank to include all functions that impact customer service.
The research behind the Net Promoter Score metric:
Below is an excerpt from the Net Promoter Score website that provides rationale for NPS.
“To determine a useful metric for gauging customer loyalty, Fred Reichheld did something rarely undertaken with traditional customer surveys: match survey responses from individual customers to their actual behavior, repeat purchase and referral patterns over time.
“Working with Dr. Laura Brooks of Satmetrix, a research team tested numerous different questions to see which one(s) would be the best gauge of future repurchase and referral behavior. The test was administered to thousands of customers recruited from public lists in six industries: financial services, cable and telephony, personal computers, e-commerce, auto insurance, and internet service providers. The team obtained a purchase history for each person and asked them to name specific instances in which they had referred someone else to the company in question.
“The results allowed the team to determine which loyalty questions had the strongest statistical correlation with repeat purchases and referrals. The team hoped they would find at least one question for each industry. They found something more; one question was best for most industries. “How likely is it that you would recommend [Company X] to a friend or colleague?”
“Next, the team looked at relative growth rates for competitors in a given industry. In the first quarter of 2001, Satmetrix began tracking the “would recommend” scores of a new universe of customers; many thousands of them from more than 400 companies, in more than a dozen industries. In each subsequent quarter they then gathered 10,000 to 15,000 responses to a very brief e-mail survey that asked respondents (drawn again from public sources) to rate one or two companies with which they were familiar.
“Where the team could obtain comparable and reliable revenue-growth data for a range of competitors, and where there were sufficient consumer responses the team plotted each firm’s NPS against the company’s revenue growth rate.
“The results were striking. In most industries this one simple statistic explained much of the variation in relative growth rates; that is, companies with a better ratio of Promoters to Detractors tend to grow more rapidly than competitors.”
Implementing this in your business:
In the question and answer period after his talk, Reichheld was asked about categories like investing or airlines where there are extraneous events (market downturns and snowstorms) that depress satisfaction in the short term. In those cases, should companies look at NPS scores relative to their industry to gauge how they’re doing, rather than absolute benchmarks?
His answer was that this is eminently reasonable in the short term. He went on to say, however, that industries that chronically have low satisfaction scores can be vulnerable to new entrants. Even if your customers are less dissatisfied than your competition’s customers (or as the old expression goes, “In the land of the blind, the one-eyed man is king”), this creates an opportunity for dramatically new business models to shift the competitive landscape. If you look at the collapse of traditional business models (the legacy airlines, the Big Three US auto manufacturers), dissatisfaction was masked by the lack of alternatives right until better alternatives presented themselves.
Reichheld also pointed out that you need to make it easy for customers to answer the Net Promoter questions honestly. Ask someone directly and their scores are higher than their real satisfaction levels. That’s why successful companies collect scores either through written or online surveys that go to third parties or by having someone else call customers to get their scores; in the U.S., Charles Schwab branch managers follow up with customers to get their scores, talk about their experience and determine how the advisors serving them can improve.
In fact, following up with customers is key; Reichheld said that asking customers for their opinion initially creates a boost in attitudes. After all, the person they’re doing business with is showing they care. If there is no follow up or indication that their opinion is being taken seriously, however, that initial boost quickly evaporates.
One final note: If you are going to follow up with clients to talk about their rating on the “How likely would you be to recommend us” question, it’s important that you make it clear that your motivation is to find ways to better serve them, rather than to get referrals to friends and family. Even if referrals aren’t your motivation, you need to clarify this to engage clients in an honest and frank conversation.
Tags: Amazon, Amp Company, Charles Schwab, Core Strategy, Costco, Customer Loyalty, Customer Satisfaction And Loyalty, Financial Payoff, Fred Reichheld, Harvard Business Review, Harvard Business School, Loyalty Effect, Negative Word, Net Promoter Score, One Of The Pioneers, Private Sector Experience, Time Partner, Unhappy Customers, Usaa, Word Question
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Wednesday, October 19th, 2011
Every January, the Harvard Business Review publishes ten breakthrough ideas for the year ahead.
Number one on this year’s list was new research on what really drives motivation. That factor: A clear sense that progress is being made.
In a multi-year study, researchers at the Harvard Business School first asked 600 managers from dozens of different companies to rank the impact of five factors that are normally associated with motivation — recognition, incentives, support from managers and colleagues, clear goals and a sense of making progress.
In this first phase of the study, recognition for good work was ranked by managers as the most important factor in motivation.
In the next stage, hundreds of knowledge workers in a variety of settings emailed 12,000 end of day diaries, rating their motivation level and talking about the kind of day they’d had. The researchers then dug deep to look at what these workers reported as having happened each day, especially on those days that respondents said were their “best days” and their “worst days.”
And the answer is.…..
The study showed that a sense of progress was the factor most strongly correlated with a strong feeling of motivation. Particularly interesting — out of the five options rated by managers before the study began as keeping people motivated , a sense of making progress was rated last
Here’s an excerpt from the Harvard Business Review article:
“On days when workers have the sense they’re making headway in their jobs or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.“
Here are the five factors that appear to drive motivation the most, the events workers said they experienced on their very best days:
Making progress 76%
Organizational support 43%
Interpersonal support 25%
Doing important work 19%
The researchers reported that negative events generally have a greater effect on peoples’ emotions, perceptions and motivations than positive ones. And the most prominent event on workers’ worst days was experiencing a setback.
And here’s what the HBR article had to say about recognition:
“As for recognition, diaries revealed that it does indeed motivate workers and lift their moods. So managers should celebrate progress, even the incremental sort. But there will be nothing to recognize if people aren’t genuinely moving forward — and as a practical matter, recognition can’t happen every day. You can, however, see that progress happens every day.”
This research has some important implications on how we and the people we work with can maintain motivation levels, even in the face of the inevitable frustrations we face each day.
When it comes to the people who work with us, the study’s authors advise managers to set clear goals and to be consistent in those goals, to give staff the resources they need and to be decisive in our decision making.
There is another implication as well — and that’s to set aside the time each day to acknowledge the progress you’ve made, large or small.
This can be done by maintaining a “progress journal” on your computer — taking three minutes at the conclusion of each day to write down the top five things you’ve achieved that day.
Another advisor prepares a list of things to do and clients to call at the beginning of each day — and draws a line through each with a yellow magic marker as they’re done. “I know it sounds silly” she says “but just seeing those yellow lines on that list of people to call gives me a bit of a boost.”
Along similar lines, one successful advisor starts each day with a short meeting of his four person team. At the conclusion of that meeting, everyone identifies the three most important things they need to get done that day — even something as simple as calling an important client can be on the list, especially if that call is overdue or is likely to be difficult.
The team members take turns making notes on those items — and five minutes after the meeting ends, everyone gets an email highlighting the goals they set. Next morning’s meeting starts with a review of how everyone did against those goals — and ends with people identifying their top three goals for the day ahead.
This advisor commented that two things have happened since they began doing this.
First, they’ve all become more focused on getting those top three things done — no one wants to be embarrassed the next morning.
And second, everyone walks away from that meeting more positive and enthused — because even after a tough day in the markets or difficult client meetings, they can still feel good about the tangible accomplishments they can point to inthe last day.
The implications of this research are very clear. As you think about how you and your team maintain motivation, by all means include recognition and rewards in the mix .… but in the process, don’t neglect the most important motivator of all, a sense that clear progress is being made each and every day.
Tags: Accomplishment, Breakthrough Ideas, Breakthrough Research, Compendium, Different Companies, Excerpt From, Harvard Business Review, Harvard Business School, Harvard Review, Headway, Knowledge Workers, Moods, Motivation Level, Obstacles, Respondents, Roadblocks, Spinning Their Wheels, Strong Feeling, Study Researchers, Target
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Tuesday, March 1st, 2011
Essential lessons from an Oscar winner
Recently, I came across an article by British executive coach Paul Rutherford, based on lessons from The King’s Speech, which swept the Oscars last night.
Rutherford began by referring to the classic book “The Trusted Advisor”, by Harvard Business School professor David Maister and consultants Charles Green and Robert Galford. This book is viewed as the definitive work on how professional advisors – lawyers, accountants, consultants, financial advisors – can establish and retain trust with clients.
He went on to write about how The King’s Speech made some of the advice in the book come alive for him, with the line:
Like lost car keys, learning can turn up in the most unexpected places.
I repeat the rest of Paul Rutherford’s article below, with his permission.
Geoffrey Rush plays Lionel Logue, the Australian speech therapist who helped Prince Bertie, the Duke of York (Colin Firth) — and second son of King George V — to overcome a debilitating stammer. To make matters worse, his elder brother (David aka Edward VIII) abdicated the throne to marry a divorcee, and Bertie became King on the eve of WW2 – at the time when the country needed a clear voice of leadership.
Like all great pieces of entertainment, it’s a movie that works on multiple levels: It’s the story of a man trying to conquer his daemons. It’s the portrait of a leader struggling to step up to his role. It’s a study of class and social hierarchy. It’s an essay on the impact of radio broadcasting on politics and society.
And it’s a masterclass in becoming a trusted adviser.
1 “TRUSTED ADVISERS ARE CONSISTENT”
It is Bertie’s wife, Elizabeth, who first approaches Lionel about treating her husband. She does so under the pseudonym of Mrs Johnson. He is direct and to-the-point with her:
LIONEL: Where’s Mr Johnson?
ELIZABETH: He doesn’t know I’m here.
LIONEL: That’s not a promising start
He tells her to have hubby ‘pop by’ to give his personal history. She says “you must come to us.”
LIONEL: Sorry, Mrs J, my game, my turf, my rules
ELIZABETH: And what if my husband were the Duke of York?
The penny drops for Lionel, but not his faith in his method and his success rate:
LIONEL: I can cure your husband. But for my method to work there must be trust and total equality in the safety of my consultation room. No exceptions.
It’s testament to Helena Bonham Carter’s performance that you can see the relief in her face. Here is an adviser that is different, confident and will not make exceptions. Whether addressing commoner or royalty, he takes the same approach.
2 “BE NOT AFRAID. CREATING INTIMACY TAKES COURAGE.”
Obviously, this could be a flagship Client for Lionel; in that era, the gravitational pull of deference would have been immense. But his method – his advice – is based upon a relationship of equals, which he makes very clear to Bertie when they first meet.
LIONEL: I was told not to sit too close. I was also told, speaking to a Royal, one has to wait for the Royal to choose the subject.”
Cleverly, Lionel is already chipping away at the protocol; even Bertie acknowledges, with difficulty, that with him it could be a ‘rather long wait’. It’s a light moment before the inevitable conflict arises as the Adviser tries to map out his territory, focusing on facts:
LIONEL: When did the defect start?
BERTIE: It’s always been that way.
LIONEL: I doubt that.
BERTIE: Don’t tell me! It’s my defect.
LIONEL: It’s my field. I assure you, no infant starts to speak with a stammer.
After setting out his stall – he is the expert – he goes on to provoke Bertie, because it breaks down barriers and is part of the solution; Bertie doesn’t stammer when he’s angry. It’s hardly likely to be part of a B2B Client engagement strategy, but it’s a memorable reinforcement of the need to be brave in the face of defensive aggression.
3 “ILLUSTRATE, DON’T TELL.”
After provoking his potential Client, Lionel sets him an exercise to record his voice (if you haven’t seen the film, I’ll spare you the details). The session ends frostily, with Bertie saying that the treatment is not for him.
However, in a scene shortly after, Bertie listens to the recording, and realises that Lionel’s methods – or at least his approach – can yield results.
No one has told him this, it’s not on a testimonial. He has first hand, personal evidence of success.
4 “EARN THE RIGHT TO OFFER ADVICE”
When Bertie returns to trial Lionel’s methods, the Royal couple set out their terms:
BERTIE: Strictly business. No personal nonsense.
ELIZABETH: I thought I’d made that very clear in our interview?
Lionel points out that the couple’s request will result in dealing with the issue at surface level, and is told that it will suffice. So rather than be precious, he agrees to focus on breathing techniques, physical exercise and tongue twisters. We know that it won’t address the core problem, but this is Lionel’s first steps in forming the relationship. He is earning the right to go further.
5 “FOCUS ON THE CLIENT AS AN INDIVIDUAL, NOT AS SOMEONE WHO IS FILLING A ROLE.”
Halfway through the film, Bertie’s father (King George V) dies. When Client and Adviser meet soon after, the conversation extends beyond the prescribed boundaries. As is his duty, Bertie has been presenting a formal face to the world, so he treats the meeting with Lionel as a form of release. Lionel learns much about his background, his upbringing, his relationship with his parents and his siblings – much of it the root causes of his impediment.
BERTIE: You know, Lionel, you’re the first ordinary Englishman…
BERTIE: I’ve ever really spoken to.
Of course, the subtext is that Lionel is the first person that Bertie has spoken to about these issues. Lionel has now reached the status of Trusted Adviser.
6 “BE SURE YOUR ADVICE IS BEING SOUGHT.”
The next time Bertie and Lionel meet, the prince is very angry with his elder brother. David is intent of marrying Mrs Simpson, a divorcee, so putting heart before duty. If it happens, Bertie will become King.
BERTIE: I am not an alternative to my brother.
LIONEL: If you had to, you could outshine David…
Lionel reaches out and gives Bertie a pat of comfort on the shoulder. Bertie pulls back in offended shock.
BERTIE: Don’t take liberties! That’s bordering on treason.
LIONEL: I’m just saying you could be King. You could do it!
BERTIE: That is treason.
They face each other, as though in combat.
LIONEL: I’m trying to get you to realise you need not be governed by fear.
BERTIE: I’ve had enough of this.
LIONEL: What are you afraid of?
BERTIE: Your poisonous words.
Bertie strides away, leaving Lionel to realise that he is no longer adviser to the man who is likely to be King.
It’s a brilliant scene, both dramatically and as illustration of a key point in Client intimacy. No matter how close the relationship becomes, there will always be areas that are off limits. Here, advice should only be given when invited.
7 “WHEN YOU NEED HELP, ASK FOR IT.”
Events turn in the drama, leading to a reconciliation between Bertie and Lionel. This happens at Lionel’s home, where he is visited by the royal couple while his wife is out playing bridge. Which is just as well, as Lionel has not told her of his ‘star’ Client.
Unfortunately, she returns home early, and finds Elizabeth in the dinning room. Bertie and Lionel are in the parlour, in a scene that reveals the latter’s vulnerability:
BERTIE: Logue, we can’t stay here all day.
LIONEL: Yes we can.
LIONEL: Look, I need to wait for the opportune moment.
BERTIE: (realising) You’re being a coward!
LIONEL: You’re damn right.
Decisive, Bertie stands and throws open the door.
BERTIE: Get out there, man!
And so the adviser is advised.
8 “JUST BECAUSE THE CLIENT ASKS A QUESTION, DOESN’T MEAN IT’S THE RIGHT QUESTION TO ANSWER.”
Bertie’s coronation is the first major test of Lionel’s methods. He attends the preparations at Westminster Abbey, and gets a very cold reception from the Archbishop of Canterbury, who takes an exception to this antipodean outsider. In the following scene, it’s obvious that ‘the establishment’ has done some digging into Lionel’s past, which they have fed to Bertie.
BERTIE: True, you never called yourself ‘Doctor’. I did that for you. No diploma, no qualifications. Just a great deal of nerve.
How does Lionel respond? By pointing out that when he was developing his methods (to help shell-shocked soldiers returning from the Great War) there was no training. He admits that he has no piece of paper, but asks Bertie to focus on his track record of results, and what they have achieved together.
* * *
I’ll stop at this point rather than spoil the end for those who haven’t yet seen The King’s Speech.
Maister et al say of the trusted advisor role: “… virtually all issues, personal and professional are open to discussion and exploration. The trusted advisor is the person the client turns to when an issue first arises, often in times of great urgency: a crisis, a change, a triumph, or a defeat.”
For any of us hoping to build such a relationship, there’s plenty to learn from Lionel Logue.
Written by Paul Rutherford, an Executive Coach and Search Consultant based in the UK. Read more of his thoughts and observations of business life at www.paulrutherford.com
Tags: Australian Speech, Coach Paul, Colin Firth, David Maister, Definitive Work, Duke Of York, Edward Viii, Elder Brother David, Executive Coach, Galford, Geoffrey Rush, Harvard Business School, Johnson Elizabeth, Mrs Johnson, Oscar Winner, Paul Rutherford, Prince Bertie, Professional Advisors, School Professor, Social Hierarchy, Speech Therapist
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Wednesday, May 12th, 2010
Last week, I talked to an advisor concerned that if he called clients too often, he might communicate that he is truly alarmed by what’s going on and raise their anxiety levels as a result.Consider advice on this topic from a recent interview with Rob Kaplan, former Vice Chair of Goldman Sachs and currently a professor at the Harvard Business School:
“Once you are in a crisis, you have to over-communicate. There is a tendency in human nature that if you are not sure what is happening and not sure what you should be doing, you under-communicate. You have to fight that. The role of the leader is to get out there and talk about what’s going on. If there are things you don’t know, just explain: “We don’t know. We don’t know what the future is going to be. We don’t know what the economy is going to do. But here is what we do know and what we’re going to do.”
That’s good advice for leaders of organization — and equally good advice for advisors.
I’ve spent a lot of time talking to investors since last fall. In the course of those conversations, I haven’t run into a single case of clients who have been panicked because their advisors have been in too much contact — but have certainly run into lots of investors concerned because they haven’t heard from their advisors at all.
Of course, just talking to clients isn’t sufficient — you have to send the right message in those conversations.
Based on Rob Kaplan’s model, here’s what that message might sound like:
1. “I’m just checking in to chat about what’s been happening in markets lately and to answer any questions you might have. What questions do you have based on what you’re read and heard in the media recently?”
2. “There certainly is no lack of bad news in the short term — this is consistent with studies that show the media tends to exaggerate things, both on the upside a few years ago and the downside today. What no one knows is how long it will take us to work through this and also how much of this bad news is already reflected in the price of stocks.”
3. “In light of this uncertainty, my focus today is less on the immediate period ahead — because no one seems to really be able to predict that with any accuracy — and more on the prospects for the mid term, two or three years out.”
4. “Given the drop in stock prices for strong firms like the Canadian banks and some of the very best global companies, there are in fact lots of reason to be cautiously optimistic if you look out two or three years. Would you like to take some time to talk about that right now?” (If you’re having difficulty finding reasons for mid term optimism, consider look at some of the articles under Links to useful articles in the Client Commentaries section in the right hand column of this website.)
Finally, once you have a point form message that works for you, you should run through it a few times until you can deliver it with conviction and confidence. Remember, what you say when talking to clients is often less important than how you say it.
If you’re concerned that contacting clients too often will increase their anxiety, remember that these days, there are few higher priorities than taking the time to frame your message, developing your facility in delivering that message with confidence — and then getting out and telling your story.
For more information, please visit http://www.getkeepclients.com.
Tags: Anxiety Levels, Bad News, Confidence, Conversations, Downside, Economy, Goldman Sachs, Good Advice, Harvard Business School, Human Nature, Investors, Lot, Organization, Rob Kaplan, Tendency, Vice Chair
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Wednesday, February 17th, 2010
Harvard Business School’s Professor Robert Pozen, discusses his new book Too Big to Save, with Dan Richards of Clientinsights.
Robert Pozen is Chairman, MFS Investment Management, the $184-billion global asset management subisdiary of Sun Life Financial, and was a former executive of Fidelity Investments in the company’s formative years.
“The best finance book I’ve read so far this year (and I’ve read a slew of them) is Robert C. Pozen’s Too Big to Save? How to Fix the U.S. Financial System. … I can’t think of anybody who has covered such a range of issues so efficiently or so well.” (Brad DeLong, ( http://delong.typepad.com, November 2009).
In the book, industry luminary Robert Pozen offers his insights on the future of U.S. finance
The recent credit crisis and the resulting bailout program are unprecedented events in the financial industry. While it’s important to understand what got us here, it’s even more important to consider how we should get out. While there is little question that immediate action was required to stabilize the situation, it is now time to look for a long-term plan to reform the United States financial industry.
That is where Bob Pozen comes in. Perhaps more than anyone in the industry, Pozen commands the respect and attention of the public and private sector. In this timely guide, he outlines his vision for the new financial future and provides actionable advice along the way. To Pozen, there are four high-priority problems that must be addressed, and this book puts them in perspective
- Analyzes alternative models for government stakes in banks
- Recommends a new board structure for large financial institutions
- Examines the importance of broader Fed jurisdiction over systemic risks
- Proposes a way to revive the securitization of loans
With Too Big to Save, you’ll learn the likely future of the finance industry and understand why changes have to be made.
Tags: Bailout, Banks, Board Structure, Bob Pozen, Brad Delong, Credit Crisis, Fidelity Investments, Finance Book, Finance Industry, Financial Future, Financial Institutions, Global Asset Management, Government Stakes, Harvard Business School, High Priority, Insights, Jurisdiction, Mfs Investment Management, Mutual Fund Industry, Perspective, Priority Problems, Private Sector, Professor Robert, Robert C Pozen, Robert Pozen, Securitization, Social Security, Social Security System, Sun Life Financial, Systemic Risks, Timely Guide, Unprecedented Events, Us Social Security
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