History tells us that, in the months and years following a pandemic, innovation thrives, politically, scientifically and economically. Pandemics are a painful catalyst for change. So while our thoughts are quite rightly with those that are suffering through illness and job losses, it does no harm to think proactively about how our industry will change and how we can benefit from the inevitable innovations.
Learning from mistakes
There is a book we would like to recommend: “Black Box Thinking: Why Some People Never Learn from Their Mistakes – But Some Do” by Matthew Syed.
In the airline industry, failure is taken seriously. Every aircraft is equipped with an almost indestructible black box. When there is an accident, the black box data is analysed, and the reason for the accident established. This ensures that procedures are adapted so that the same mistake doesn’t happen again. Using this method, the industry has created an astonishing safety record.
Compare this to the health care industry, worldwide. Consider the shocking fact that preventable medical error is the third-biggest killer in the United States. And most of those mistakes are never made public, even though studies have shown that, where the reporting of incidents and errors is encouraged, learning increases and failures decrease.
Thankfully, getting it wrong in our industry doesn’t have deadly consequences, even though scams and mis-selling can indeed be adversely life changing for the victims. But Syed’s point is that many of us have a relationship with failure that impedes progress, halts innovation, and damages our lives. The author offers a radical new idea: that the most important determinant of success in any field, whether sports, business, or life, is an acknowledgment of failure and a willingness to engage with it. This is how we learn, progress and excel.
That’s all very interesting, but how does it affect me?
There is a growing concern that the economic effect of the pandemic will cause more deaths that the virus itself. There will certainly be financial hardship. So trustworthy, cost effective financial advice and management will play an important role in society.
But is your business prepared and equipped?
As Syed points out, before we can look ahead, we need to look back. What have you learnt from the past, particularly from mistakes, that will better position you for the future?
We suggest that undertaking an objective and critical self-analysis will help you to adapt your business to the changing needs of society.
Here are some thought starters
- Is there a learning culture in your business?
- Client solutions – are these driven by client needs or by business needs?
- Does your business have a regulatory focus? Do you align with the regulator’s objectives and drivers?
- Have you considered the continuing momentum towards a more ecologically friendly society and sustainable technologies?
- Is there a vulnerable client policy?
- Have you considered a pro bono advice offering?
- How efficient is your business? Are your businesses processes robust and repeatable?
- How profitable is your business? Are your charges based on a thorough grasp of the costs of delivering your services?
- Is your charging structure equitable and fair to all? Does it represent ‘value for money’? Does it provide scope for investing in the business?
- Do you ever take a break from your daily business to focus on how you might improve things?
- Do you have a Business Plan?
- Are you hampered by technology that is well past its shelf life?
- Is your technology consistent with Gen Z / millennial habits and exponential App growth?
- Does your business model and technology cater for client self-management?
- Fraud and financial crime – are you prepared? Data is valuable – do you protect it, do you have cyber security covered?
- How did your business cope with the Coronavirus? Were your disaster recovery and business continuity plans fit for purpose?
- Do you have an exit strategy? Or are you banking on traditional industry valuations based on multiples of income, which are at risk from continuing regulatory and market focus?
- Have you considered de-risking strategies to enhance business valuations? Where are the liabilities? How did they arise? How can they be avoided in future?
- Do you have adequate capital protection?
- Is there a business continuation strategy? How are you attracting younger individuals into the industry?
- And don’t forget the need for new client blood too – do you have a strategy to attract the next client generation(s)?
Everything is fine as it is?
If the answers are mostly ‘Yes’ then fair enough; you are well prepared.
If the answers are mostly ‘No’ or ‘Not Sure’, then as we have seen this year, ‘as it is’ may not be good enough and not sustainable.
So here is a final question for you to ponder as we all head towards 2021 with a hope that it will be less difficult than 2020.
- If you were designing your business from the ground up today, would it look like it does now?