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Industry Spotlight > Broker Dealers

How Small Changes Can Produce Big Results

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What is innovation, and how do you execute on it successfully?

Webster’s Dictionary defines it as “doing something new.” For most of us, it means “something better, more beneficial”  than what we were doing before.

In my experience, most — if not all — advisory firms and their owners need to innovate in order to grow. They typically need to do something different to attract more client — add new services and/or processes for converting prospects into clients, etc.

As we all know, the financial industry and it’s consumers are constantly changing. And, to stay relevant, independent advisors need to keep up.

The good news is that most people, including  advisory firm owners, innovate naturally. As we do what we do every day, recognize problems and opportunities, and think of better ways to do things.   

But, many firm owners have a tendency to address their innovations impulsively and often haphazardly.  They see an opportunity for positive change, and they start working on it.

So far so good. But then, they see another opportunity and start working on this, tool, and then another and another. Or they may assign someone else to implement one or more of their innovations.

Can you see where this is going? The owners end up overloading themselves, their employees and their firms. And what would have been positive innovations either don’t work out as well as they might have — or don’t get implemented at all.  

Make a Plan

The obvious problem here is owners ignoring what I call “innovation strategy.”

That is, they do not take the time to create a plan for the best way to implement changes to their businesses. And as a result, they don’t get the maximum benefits from those changes.  

The first step in a sound innovation strategy is to recognize that successful innovation needs to be implemented in moderation. While change can be very good for a business, it can also be very disruptive when handled with little care.

Most  owners want to start with the biggest — most impactful — innovation on their list. But I find, it’s almost always better to start with a smaller, more easily implemented project or two.  This allows you to get some success under your belt and build up confidence in yourself and your staff.

Along those same lines, many owners seem to think innovation has to entail a major project, like a new tech platform or a completely new service model.

But I’ve found that smaller changes (for instance improving working efficiency or streamlining the client service you are already providing) can often have a much larger impact on the work capacity of a firm.

The reality is that it’s better for most firms to start with small changes; they usually can’t handle too much innovation too quickly. They don’t have the capacity, resources and time to do large projects right.

When a staff members get overloaded, they generally stop working on a new project or stop trying to do it well. Either way, the outcome isn’t pretty.

What to Do

How do you decide what you should change first? That’s usually the hard part — narrowing it down to “one little change.”  

I recommend having “change” meetings. Bring the staff together and ask: What’s the one little change that would make our working lives easier, and the business better?

Though this type of meeting might strike some as a bit silly, I have seen these meetings make a big difference, even if employees suggest what might feel like small changes.

In one employee “change” meeting, for instance, a staff member talked about how hard it was to explain the firm’s “investment strategies.” As a result, we discussed how staff could better explain them.

After some discussion, we realized that the clients were more visual when it came to understanding investment strategies. We created a one-page visual of the firm’s investment philosophy for advisors to hand out. While seems like a very small innovation, this change made a huge difference.  

Over the years, we’ve seen advisor innovations include everything from multi-million-dollar tech creations to new handouts. Firms, of course, can come up with lots of innovations.

But it’s often the smallest changes that can make the biggest impact on growth. I encourage you and your firm to focus on one small innovation and go from there.

Angie Herbers is Managing Director and Senior Consultant at Herbers & Company, an independent growth consultancy for financial advisory firms. She can be reached at [email protected].


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