As the energetic and inspiring professor Bill Barnett from Stanford University paced the lecture theatre, he stopped and placed his hands on the table in front of him. He leaned forward and drew a breath from what could well have been exasperation. He looked accusingly around the room at the 50 Australian financial advisers who sat in front of him and asked in a tone that could be taken as provoking at best, or menacing at worst, “Who in this room has failed in the last six months?”
Silence; 50 advisers looked cautiously around the room to see who was game enough to speak.
The professor asked again, “Who in this room has failed in the last six months?” This time, there was a strong emphasis on the word “failed”.
The silence returned. Time ticked by. The advisers held their breath.
“What,” (pause), “Nobody?”
More silence. The professor drew breath, stood up straight, and looked around the room one more time.
“You see, you have to fail before you can succeed,” the professor said. “If you don’t fail, then you’re not trying anything new and if you aren’t trying anything new, then you will be in line for the biggest failure of all time. Your business will close. It is OK to fail – in fact, it’s more than OK, it is essential!”
We took a collective breath of relief. This acknowledgement that we needed to fail to succeed was a revelation to the advisers in the room, who were at Stanford University to discover how to improve their businesses in the face of a rapidly changing environment for financial advice.
But the essence of the professor’s message was yet to come.
It isn’t simply failing that creates the success, it is failing the right way. That starts with failing fast and cheap. Fast because we need feedback soon and often to keep improving the idea, and cheap because we don’t want to take big risks with untried ideas. It is a process of discovering rather than knowing what will work. You need to think about what you believe would be an improvement over what you do today, and then try it, and don’t be afraid of it not working. You also need to leave your ego at the door and your intuition – your gut feel – turned on. Tone down the logic for a while and use some imagination.
The discovery process and Adaptive Change
It is important that when you try something new, you don’t bet the house on it and go all in. Sample the idea. By this I mean try it in a small way first and make sure you are collecting the feedback, the results, the evidence, so you can quickly refine the idea to make it even better. As a baby, that’s how you learned to stand, and then to walk. As a child, that’s how you learned to ride a bike. You kept trying different things until something worked. And then you did it again and again until you mastered it. Changes in your advice style, your practice’s back office, your entire business model – they can all be discovered through this process of trial and error.
This discovery process is an essential part of what the Association of Financial Advisers (AFA) has termed Adaptive Change to help advisers cope with the number of structural shifts occurring in financial advice through legislation, consumer expectations, fintech developments and new competition.
Adaptive Change calls on advisers to accept that the paradigm for financial advice has changed and, in response, experiment and collaborate to discover the new forms of best practice, where the best of today is retained and combined with what will become the best for the future.
The collaboration with other advisers, your peers, is an essential element of the solution. Whether you do this through your own networks, or through the AFA’s communities of practice – Genxt for new advisers, Inspire for female advisers, Leaders Forum for experienced practice owners or Practitioners for all advisers – sharing ideas and experiences speeds up the process of discovering what will work best for the future.
In your practice, build a culture that values discovering over knowing. It would be a culture where learning is encouraged and where experimenting is rewarded. Cultural change like this will require leadership. Creating structures in your practice to support cultural change, through simple means like innovation team meetings, can focus your team on important, unsolved problems.
It’s early in 2017; what a good opportunity to carve out some time to determine what you want to change. Then start, with the confidence that it’s OK to fail your way to success.
Brad Fox attended the Stanford Graduate School of Business Executive Education Strategic Leadership Program in 2012. The quotes from professor Bill Barnett provided the theme of the presentation and should not be taken as a verbatim transcript.
