The common leadership challenges are similar across different businesses and industries.
Lately, these challenges have become more complex in a rapidly changing world.
These are the top three challenges facing businesses today:
1. How does a business stand out in an increasingly competitive, commoditised and distracted world?
To become the best logical choice for their target market, a business needs to become extremely clear on what makes its offering unique and who the business serves.
2. How does a business attract people towards a common purpose?
As a leader, in order for the business to grow, it is necessary to get people’s ‘buy in’ on the vision. Clearly articulating the vision, explaining the link between vision and results, and connecting the vision to individual dreams and aspirations, is the way to attract and retain the right people.
3. How does a business foster an environment of trust with its customers, employees and stakeholders?
Trust is a consequence of doing the right thing and doing things right. Where character meets competence, trust has the opportunity to grow. Building a culture where a self-audit of individual intentions and actions is encouraged, is vital in today’s world. Monitoring and micro managing may work, but is never a complete solution for instilling integrity
The challenges of leadership are more pronounced than ever before. However, the opportunity to step into responsible and ethical leadership is greater than ever before.
First, last and always, our greatest challenge is people. We are in a people business and that means focusing on the skills and expectations of staff and clients, as well as the people they care about.
We live in a profession regulated by a Corporations Act that assumes we are in the product business, and the Royal Commission has shown that many advisers and AFSLs have done nothing to change that view.
Yet anyone with longevity in our profession knows we are not simply product advisers, and that means making sure that our professional and commercial efforts align with the priorities of the people we care about – namely our staff and clients.
Despite the Best Interest Duty mandating that we provide advice in the context of our clients’ goals and preferences in the way that the Act, Regulator and the Advice Assurance function works, is to focus on product costs and advice fees.
We are currently working hard on a project we call the OPSS Matrix, which creates an ongoing framework aligning (O)bjectives with (P)roducts, (S)trategies and (S)ervices.
Before every review, we are mapping every aspect of our service offering to a defined client objective and this specifically includes what we call soft or service objectives, which are more about the experience that our clients want to enjoy, rather than a hard strategic or product feature.
Cody Harmon AFP® Financial Adviser and Managing Partner, Hard Line Wealth Licensee: Fitzpatricks Private Wealth
For me personally, it is understanding client behaviour.
We are guided by our emotions and are riddled with cognitive biases. So, clients may appear to be able to handle a certain strategy, and/or present themselves in some way that differs from what is essentially ‘true’ for them.
This poses a challenge for the business, as strategies or portfolios recommended can be mismatched from what is true, in terms of their ability to take on risk and handle beneficial complexity.
As a business, we recently identified a big issue with traditional risk profiling methods, resulting in clients selecting risk profiles they may not be comfortable with for a variety of reasons unique to behavioural finance.
So, when this current bull market (since 2012) ends, my question to you all is: Are your clients risk profiled correctly?
Business challenges: There are many and always will be.
The key is to stamp out the noise and keep your people focused on helping clients achieve great
Long ago, I learnt to not worry about the ‘uncontrollables’ and rather focus in on what you can control to
achieve your clients, your staff and your business’s outcomes.
As a practice principal, you can’t change or develop a culture without the right people, and if you want to change the culture within your business, be prepared to change your people.
The path you take will depend on your view – is talent innate or can it be developed? Employees on
their own won’t develop a culture, or they may even contribute to the wrong culture.
Leadership is the key to attracting and retaining talent, and ensuring everyone has the focus your
business may require.
Ask yourself: When was the last time you showed real leadership in your business? If the answer is
later than yesterday, then you are already too late.
As a business owner, you need to demonstrate leadership to your team each and every day. After
all, don’t you expect each of them to deliver exceptional outcomes for your clients?
We can probably name our best and worst managers we’ve each worked for over our own careers,
so learn from your own experiences, communicate clearly and often with your team, and lead them
to your combined success.
Achieving success through others is a wonderful experience, after all, I’m sure if your current
and/or past staff do talk about you, you’d want to make sure it’s positive.
Jeremy Chiel CFP® Partner/Adviser, Stonehouse Licensee: Stonehouse Financial Services
Managing the various aspects of change within our organisation can often be challenging. Having a harmonious team is crucial for the success of clients, the business and individuals within the team.
Managing change efficiently and effectively can assist with these outcomes and is an issue which our leadership team is currently working on improving.
Individuals have their own set of values and beliefs, which they bring into a team, which then intersect with the values of our firm. We’re conscience that success occurs with the alignment and understanding of the values. For this reason, our firm is placing an emphasis on the exploration of values, in the context of change.
The change can be new team members, processes, client service offerings and dealing with our regulatory environment. By better aligning the values of our team and business, we can adapt more effectively to change.
One aspect we’re working on with our team is understanding and discussing the difference between a fixed and growth mindset. This can be the difference between either avoiding or embracing challenges and shaping our views of our personal exertion.
From a leadership perspective, we are discussing these issues with our team and ultimately, want to empower people to embrace change and flourish.
The changing landscape in which we operate in business and in life is challenging but exciting at the same time. Being agile, visionary and courageous in your approach to lead and set the way into the unknown is what every leader should embrace.
Having diversity in your networks and daring to be different in the face of adversity when making decisions takes guts and self-belief. Showing compassion and vulnerability within your team is critical in allowing others to flourish and build a level of trust that is essential in achieving the overall outcome that is desired.
In a world consumed by choice, it’s so important to be of value and remain relevant, otherwise, why should anyone care and why should anyone listen? You need to make an impact in everything you do and everything you say.
In the words of Albert Einstein: “Great spirits have always encountered violent opposition from mediocre minds.”
Nathan Nash CFP® LRS® Director – Private Wealth, Scarlett Financial Licensee: Lonsdale Financial Group
For me, I recognise and appreciate that my business success is primarily based upon the people I have around me. Consequently, as a leader, I see the greatest and most important challenge to be sourcing, retaining and elevating those good people.
This is the most difficult part of building business success. I have received little or no help with traditional means of advertising through Seek and recruitment agencies. So, we took it upon ourselves to reach out to various personal and business networks, which has been highly successful. Because candidates come with a personal reference from a reputable source (a friend, business associate or colleague), this has allowed us to get a better insight into whether the candidate has the right personal characteristics for our business.
I believe there are three key attributes to retaining good people: making sure people know they are valued; providing them with an opportunity to grow; and provide them with something to aspire to.
However, too often we get caught up in our busy lives, and so, these simple things are often forgotten. I think the best way to let people know they are valued is to communicate it, and let staff know how important they are and that their efforts are appreciated.
I also encourage continuing education but not always mainstream. For example, a staff member recently completing an IDEO U online course in design thinking.
I also think aspiring to become a leader is really important. That’s why team members need to see that your successful business life is in balance with your family, travel and wellbeing.
A characteristic of a valuable team member will be a desire to grow, which may mean into an elevated role, but also within their current role. To encourage and promote growth, we hold quarterly meetings to focus purely on development. These meetings not only focus on our team members’ personal growth but also on what innovation/efficiencies they can employ in their current role.
I strongly believe the success of a business is highly correlated to your success in developing staff. Our business success is the result of the people within it, and our genuine desire to improve the lives of our clients and staff.
It seems the headwinds have increased tenfold over the last few years, particularly in the last six months. Not only are we facing challenges that will reshape the profession as we know it, we are also in the midst of the disappointing disclosures from the Royal Commission and the backlash that will entail.
Over and above those challenges is the rapid change in technology and the evolving definition of financial planning and changing expectations of clients.
My biggest challenge is maintaining focus on the big picture and our plans for the next 5-10 years, rather than the next 5-10 minutes. It’s so easy to get distracted by the drama and get caught out by ‘shiny ball syndrome’. When you lose focus, you lose purpose and without purpose it’s difficult to consistently get up and keep going to make a difference.
Open communication with clients, staff and colleagues is a must. It’s important to be seen and heard and not missing in action. Having an open mind regarding technology, business processes, service delivery and the ‘way we do things around here’ is important, so we can be flexible and embrace new ideas.
Leadership is being authentic, making decisions and acting on them. A favourite phrase of mine is JFDI – ‘Just F…. Do It!’.
Unprecedented change presents our biggest challenges, but also opportunities.
As a business owner, it is essential to move with change, to expect it and embrace it, but the period we now find ourselves in is unprecedented and will take careful navigation to thrive.
The Royal Commission has started an unravelling of financial planning in this country as we know it, which includes the necessary dismantling of vertical integration; and it will result in significant adviser changes. With it, will be industry unrest, including exits and greater scepticism amongst consumers.
In response, we are engaging with our clients to find out what they are thinking. Net Promoter Score (NPS) has been a great addition to our business. It provides a simple way of tracking client feedback and offers a way to provide testimonials for potential clients. Video is another way of providing a window into our practice, to help with trust building.
More broadly, we are looking at how we can promote our inherent strengths at Yield – our team, our history of fee-for-service, high quality financial plans and systems that offer an engaging proposition to our existing and potential clients alike.
Yield is also building a ‘community’ of culturally aligned professionals who know the way to deliver the best advice is to work together with common goals and rewards.
Finding the right fit of people who bring diversified value to the community, will mean everyone can focus on what they are best at and deliver great outcomes for our clients. The community will also provide a place where exiting advisers can sell their businesses, knowing their clients will be well taken care of.
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