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Ric Edelman and his wife Jean started their wealth management business in 1986, with no clients, no assets and no staff. Today, they’re one of the nation’s largest financial advisory firms with $14 Billion in assets under management, 26,000 clients, 100 advisors and 38 offices.
With these impressive accomplishments over nearly thirty, sometimes-harrowing years in the financial markets, it’s safe to say that Ric is an expert in the wealth management business. That’s why a recent article by Ric in FA Magazine caught my attention.
In “ What Got You Here Won’t Get You There ”, Ric explains in convincing fashion that professionals in the wealth management and financial advisory business are facing a period of profound and rapid change. In the article, he offers three courses of action for advisors. Rather than repeat them here, I encourage you to read his excellent article. The point is that change is coming and the advisors who intend to survive must be ready to keep up.
This got me thinking about the phenomenon of change and the ways we humans deal with it. When an industry – or a business – is faced with the prospect of change, what can leaders do to ensure that their people and organizations are equipped to adapt.
We’ve all heard the expression “the only thing that’s permanent is change”, yet for most of us change is hard. In fact, according to neuroscientists, change is pain.
In “ The Neuroscience of Leadership, Breakthroughs in brain research explain how to make organizational transformation succeed ”, authors David Rock and Jeffrey Schwartz offer an illuminating explanation for how our brains respond to change and some tactics for helping ourselves and our people deal with it more successfully.
What caught my eye in the research is the conclusion that leaders can mitigate the negative effects of change by changing the way they lead. This is accomplished in part by focusing not on past poor behavior, but on creating new behaviors guided by employees’ self insight.
Self insight, as I interpret it, is that aha moment each of us has when a concept, conviction or course of action forms in our mind, not necessarily because of what we were told or trained, but because it made sense for us in a certain place at a certain time.
Rock and Schwartz also observe that “Expectation Shapes Reality”, stating that “Cognitive scientists are finding that people’s mental maps, their theories, expectations, and attitudes, play a more central role in human perception than was previously understood.”
In other words, what we expect or how we feel about something – good or bad – has a defining effect on how we respond to the event. In this case, change.
Where does all this bring us?
The sum of these circumstances is this: Change must happen and it’s going to be uncomfortable, if not painful. How we respond to these realities will, I believe, determine who wins and loses in today’s rapidly evolving business environment.
Companies who approach change as opportunity have the edge. These companies see change as the only way to remain valuable to changing customers and essential to the fulfillment of their mission. They engage all their people in the quest, and experience change as a shared challenge.
I approach this challenge as a communicator and a storyteller. Since we were kids, stories have had the power to demystify the unknown, define ideals, bring dreams to life and embolden us to overcome obstacles. The same things we want to accomplish together as we approach the painful business of change.
Through the power of story, companies have the opportunity to leverage change to their advantage: to transform their organizations, to make them more customer-centric, more efficient, more nimble, more competitive. Change isn’t the enemy, and complaining won’t make it go away. Change is the route you must take to realize the future you want to have.
By framing the change in the context of a story you can set expectations and manage people in ways that brings out their best instead of triggering their fight-or-flight impulses.
My advice to advisors and their firms, to any business faced with change, is to be thoughtful about developing a story that explains and justifies the change. Why are you here? What got you here? Why do you matter? What would your customers be missing if you weren’t there for them, How are your customers changing? What must you do to continue to be an important part of your customers’ lives? Where are you going?
Your story should be personal, not corporate. It should honestly and openly communicate the struggles and victories along the way and gratefully acknowledge the contributions of individuals across your organization.
Mostly, your story must be believed, demonstrated and repeated. Over and over and over.
Through the power of story, you can transform change from an enemy into a demanding ally. You might also transform your company. Go get ‘em!