Posts Tagged ‘Psychologists’
Tuesday, April 3rd, 2012
by Bob Simpson, Synchronicity Performance Consulting
One problem that I personally experienced and have noticed over the past 14 years of working with advisors is that the day-to-day grind of being an advisor reduces happiness and creativity.
Research by positive psychologists indicates that there are three major factors that affect happiness *:
- 50% from genetics
- 10% from environmental circumstances, like where you live or how much money we make
- 40% to aspects that are under your control like what we do and how we think
This reinforces the sports psychology concept of “focus on the process and let the score take care of itself”.
By allowing yourself to get caught up in the day-to-day activities of your business and focusing on revenue and assets under management, you can lose your happiness perspective. To build a great business and live a happy life, you need to protect factors that reduce stress and free yourself up to organize your thoughts.
I use blogging as a way to organize new concepts that I have been working on. For example, right now I am reading a book The How of Happiness by Sonja Lyubomirsky as a follow-up to The Happiness Advantage by Shawn Achor. As I spend more time driving and working out than I have free time for reading, I listen to a lot of audiobooks. When I hear an interesting concept, I bookmark it in the Audible.com iPhone app and then do additional research. Then, I write a blog about it. Writing the blog helps me to organize my thoughts and gives me a synopsis to which I can later refer.
It is important to find the right balance. Your goal should be to spend 60% of your time in client-facing activities (managing client relationships, doing business development and solving clients’ financial problems). Try to use your non-client-facing time to be creative, think and write to keep your creative juices flowing and to manage your happiness. For many of you, you are not using this time productively now and converting it to productive and happiness generating activities can have a major impact on your success.
Blogging is a great way to focus on the happiness factors that are under your control. Focus on writing about positive things, especially during times of turmoil. By achieving greater happiness in your life and business, you will have a more positive effect on clients and other people you meet.
Focus on what you control. Happiness is contagious. Focus on the process of being happy and you will achieve greater results in your business and life.
Bob Simpson is President of Synchronicity Performance Consultants. Bob can be reached on his direct line at 905−502−0100, toll free at 866−646−6002 or by e-mail at email@example.com.
About Bob Simpson
Synchronicity Performance Consulting has been coaching financial advisors since 1998.
Bob Simpson, president and founder of Synchronicity has been involved, directly or indirectly in the financial services industry since 1981. He has been a very successful financial advisor with Nesbitt Thomson Inc., a major Canadian financial institution. Between 1981 and 1989, he built a business with more than $120 million in assets under management, was branch manager and SVP National Sales for Midland Walwyn and has been coaching financial advisors since 1998.
Tags: Achor, Additional Research, Assets Under Management, Audiobooks, Business Development, Client Relationships, Creative Juices, Creativity Research, Doing Business, Environmental Circumstances, Facing Time, Free Time, Genetics, Happiness, Happy Life, Iphone, Psychologists, Reading A Book, Sonja Lyubomirsky, Sports Psychology
Posted in Advisor Collaboration, Synchronicity | Comments Off
Wednesday, February 29th, 2012
Among the issues successful advisors grapple with is how to get the most out of your team. Many advisors struggle with staff members who regularly fall short in terms of work ethic, attention to detail or ownership for outcomes.
Often, the gut response when dealing with these issues is to focus on compensation; to change the mix of fixed versus variable pay, or make the variable component more directly tied to things
Sometimes tweaking compensation works, but more often it fails. Occasionally the problem is that you simply have the wrong people. But a recent book suggests another explanation, that you are using a 19th and early 20th century approach to motivating your people rather than one aligned with today’s reality.
Why carrots and sticks don’t work
The backbone of managing employees since the industrial revolution has been based on carrots and sticks. Historically, the key to success was seen as rewarding the right behaviour and punishing the wrong behaviour.
Psychologists refer to compensation as an external or extrinsic motivator. It motivates us from the outside rather than from the inside. Research shows that extrinsic motivators do in fact work, but only in a surprisingly limited range of circumstances.
In his book, Drive: The surprising truth about what motivates us; author Dan Pink describes experiments on the impact of incentives.
A group of students were given three levels of rewards to complete some tasks.
As long as the tasks were rudimentary and mechanical, the outcome was what you’d expect; the higher the incentive, the more productive the students.
When these tasks involved conceptual, more complex thinking, however, unexpected results were observed. Not only did the higher incentives no longer produce better performance, but in some situations, higher incentives actually led to worse outcomes.
That doesn’t mean that money doesn’t matter. Rather, what’s been shown is that to be productive people need to be paid fairly. Once you’re at that threshold of fair compensation, for most people the incremental payoff from higher pay rapidly diminishes. Once people feel that they’re fairly paid, Pink maintains that it’s generally three other factors that drive outstanding motivation and performance. All linked to internal or intrinsic motivation rather than external motivators.
The first quality that drives motivation in a job is autonomy; the ability once a goal has been set to define how to achieve that task.
This flies in the face of traditional command-and-control approach to management. This top down approach does create compliance, but what it doesn’t do is create engagement. In fact a Cornell University study of worker autonomy at 300 small businesses found that those that offered their employees autonomy grew four times faster than control oriented firms and had one third the turnover.
To create a high performance team, the first requirement is to give the people you work with the ability to shape their jobs to achieve the goals they’ve been given. This is true for all employees, but it’s especially for today’s younger generation of workers who are looking for fulfillment in their work beyond a pay cheque.
So if you aren’t getting all the results you’re looking for in your team, perhaps start by looking in the mirror and asking if you’re giving your staff the scope they need to operate to their potential.
The second quality that creates motivated employees is mastery, surmounting the challenge of becoming excellent at something that matters. Mastery is a mindset; always seeking to become better at what you do. Achieving complex tasks requires an inquiring mind and the willingness to experiment with better ways to getting a job done.
Fully engaged employees have the tools, the training and the scope to become very good at the tasks that occupy their days. This leads to another key motivator; a sense of achievement.
A second question to consider is whether you’re giving your team the mandate and the necessary support to become outstanding at their work.
The third intrinsic motivator relates to purpose; the sense that we’re doing important work that makes a difference in peoples’ lives.
Financial advisors are fortunate in this regard. Instilling a sense of purpose can be very challenging if you run a widget factory. In contrast, good financial advisors and their teams make a positive impact in clients’ lives each and every day.
Ask yourself if you’re taking enough time to talk about the purpose of what you and your team do. When you’re holding your monthly staff meetings, consider adding an agenda item that focuses on one case where a client thanked you for the difference your work made. Sharing those stories can help your team recognize the purpose in what you do beyond taking a pay cheque home.
Replacing “if then” with “now that”
The research on intrinsic motivation obviously has very big implications on how advisors should structure their teams.
As an aside, Dan Pink doesn’t advocate that variable compensation be eliminated entirely, but does suggest that it be restructured. Traditional incentive compensation works on an “if .. then” model, “If you do this, then you’ll get that.” An extension of the carrot and stick approach to motivation, “if … then” compensation is fine for mechanical tasks, but can fixate people on the task for which they’re being reward to the point that it destroys creativity. It can also lead people to look for shortcuts and to essentially game the system.
Instead, Pink suggests that businesses move to a “Now that …” approach: “Now that you’ve done this, here’s how I’d like to acknowledge your efforts and your contribution.” He also suggests that where appropriate, this be focused at the level of the team rather than the individual.
Does this apply to your team?
One final word of caution: Not everyone responds to intrinsic motivation. There is an element of people who are primarily (sometimes exclusively) driven by external motivators such as compensation. Wall Street traders are a classic example of people who fall into this category.
There are a couple of problems with having these people on your team. First, however much you pay them, for people that are exclusively compensation driven it’s seldom enough. And second, research shows that people driven by external rewards are less motivated, less engaged and less productive than those who are attracted to their work because of the intrinsic aspects of their jobs: The opportunity to operate autonomously, ability to achieve mastery and sense of fulfillment and purpose that they gain.
As you think about why the people on your team aren’t operating as effectively as you’d like, it’s possible that the difficulty lies in their flaws.
Or perhaps Shakespeare and Al Capp got it right.
In the play Julius Caesar, Cassius says to Brutus “The fault lies not in the stars, but in ourselves.”
And in his classic comic strip Pogo, Al Capp wrote the immortal line: “We have met the enemy and he is us.”
Tags: Attention To Detail, Backbone, Carrots, Circumstances, Fact Work, Gut Response, Incentives, Industrial Revolution, Motivating People, Motivator, Pink, Psychologists, Rewards, Staff Members, Struggle, Surprising Truth, Tweaking, Unexpected Results, Variable Component, Work Ethic
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Wednesday, June 2nd, 2010
Earlier this month, new research was released on how to talk to seniors about their investments.
Titled “Behavioural finance and the post-retirement crisis” and sponsored by Allianz Insurance, this report compiles findings on how older investors perceive risk and make financial decisions .
Ten top psychologists, consumer behaviour experts and behavioural economists contributed to this report. Here’s how US advisor site Horsesmouth summarized some of the suggestions on how to frame conversations with seniors around risk and investing.
Hyperaversion to loss:
Be very conscious of the sensitivity to loss. In general, investors experience the pain of a loss twice as strongly as the benefit of a gain. For retirees, however, the pain of a loss is five times stronger than the equivalent gain.
Desire for control: Given their fear, you’d expect retirees to opt for protection and guarantees — but studies show the reverse is true. Many retirees shy away from products with guarantees because they don’t want to give up control.
The safety of “monthly income” When presented as providing income, 70% of investors over 50 chose an annuity. Only 21% chose the exact same annuity when positioned as an investment solution with monthly returns for life.
The impact of inflation Unless helped to think this through, there is a tendency for many seniors to focus on the nominal amounts they’ll be receiving and to ignore the impact of inflation.
Getting the math You need to be sure that your conversations are at a level clients can understand. Research shows that math ability starts declining at age 53; by 80, almost half of seniors have difficulty making sound financial decisions.
Here’s a link to the full research report
And here’s a checklist from the report on having effective conversations around retirement income planning:
|Checklist||Inspired by the Work of Professor…|
|Is the retirement income strategy framed in terms of the monthly income a retiree will receive?||Brown on Framing|
|Are the implications of today’s financial decisions vividly presented so employees see how their lives will be affected?||Goldstein on Vividness|
|Is the strategy appropriate for retirees who are hyper-sensitive to losses?||Johnson on Hyper Loss Aversion|
|Can retirement income decisions be made before the onset of cognitive impairment? Are the number and complexity of choices manageable for older individuals?||Laibson on Cognitive Impairment 2|
|Does the retirement income strategy offer multiple accounts to facilitate different goals, such as paying the rent or spending money on vacations?||Loewenstein on Tangible Mental Accounts|
|Are employees, carried by inertia, assigned to a customized default that is appropriate to their situation?||Madrian on Inertia|
|Does the language used to describe the retirement income strategy make it easy to evaluate its features?||Payne on Evaluability|
|Does it encourage individuals to make active choices?||Previtero on Active Decision-Making|
|Does the retirement income strategy provide some inflation protection?||Shafir on the Money Illusion|
|Will it be perceived as fair by most retirees?||Shu on Fairness|
Tags: Allianz, Allianz Insurance, Annuity, Consumer Behaviour, Conversations, Dol, Economists, Guarantees, Impact Of Inflation, Investment Solution, Math Ability, Older Investors, Psychologists, Retirement Crisis, Retirement Income, Rfi Response, Seniors, Sound Financial Decisions, Tendency, Volatility
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