Many financial planning practices that were successful pre-FoFA will become casualties of major changes in the regulatory landscape, it has been claimed. Unless they follow these four rules…
According to Seaview Consulting director David Fotheringham there will inevitably be some practices that fall by the wayside as they struggle to succeed in a post-FoFA environment – namely those practices that are unable to transition their operational infrastructures to address the consumer and legislative demands of the future.
So how can you ensure that you don’t become one of these casualties? Fotheringham suggested that fostering a culture that both recognises and embraces the need for change is vital.
“A business improvement ambition will not suffice. A great strategy poorly executed will have the same result as a poor strategy implemented well, both will underachieve,” he added. “Successful strategy execution comes from the discipline of sticking to the process of implementing change.”
He believes that those practices that embed strategy execution into their business processes from top to bottom – ensuring every person is clear on the strategy, their role and their value in the process – are the ones that will thrive.
The successful practices of the 21st Century, he said, will:
Focus on continual improvement;
adapt to changing technology that is influencing customer preferences; and
respond to a changing regulatory and competitive environment.
To execute your business strategy effectively, he suggested that you follow these four tips:
Prioritise opportunities and focus on delivering short-term outcomes;
ensure management adheres to ‘the six Cs’ (see below);
identify early adopters; and
foster a culture of accountability.
“There is never a shortage of initiatives that could benefit the organisation; however, the challenge is to implement a filtering mechanism that moves beyond an individual’s position or personalities to identify and prioritise those projects worthy of investment,” he said.
“The misapplication of resources to ineffective projects is one of the greatest causes of underperformance, staff frustration and dissatisfaction. Therefore, it is essential to establish a system that measures the value of each opportunity across a range of criteria in order to identify those offering the best return after factoring in complexity, resources required, cost and the time to deliver.”
The six Cs
So what are the six Cs? Fotheringham sets them out in the following terms.
Clarity: The vision and purpose of the business is crystal clear and the path to success clearly articulated in a manner that everyone across the entire organisation can embrace and understand.
Control: Responsibility must rest with the ultimate leader and not be delegated. The person driving the change initiative must have the authority to direct resources to instigate and manage the cost of change within their business unit or across the organisation.
Capacity: The organisation must have the financial capacity to invest in the change process, including the willingness to reassign or secure the best resources to the task at hand. Sufficient funding and resources must be allocated in the budgeting process to enable the change program to be implemented effectively.
Capability: If the right skills don’t exist in the business they need to be put in place either by training or securing the necessary skills on a part-time of full time basis. It is unrealistic to expect people to lead others without the necessary training and knowledge.
Communication: The change journey is supported by an effective collaboration and communication framework that facilitates the progress towards stated goals and a forum for gathering and development of ideas. Success will come when everyone can accept both positive and negative feedback, in order to work collaboratively to address, resolve, or capitalise on the feedback to the benefit of the client or customer.
Commitment: Management must stay committed to the journey by working through the tough periods, face the challenges rather than turn away and be honest in their assessment of themselves rather than looking for excuses.
“The traditional approach of assigning the task of change to managers and asking them to implement down through the organisation is flawed and fails to acknowledge each individuals strengths and weaknesses,” he said.
“The alternative is to identify the right people across the entire organisation who can motivate and lead their peers. Momentum is achieved by using a small group of enthusiastic staff members who are willingly to embrace change and who others in the organisation respect and follow. Use this group to develop, test, and refine solutions before pushing change onto the entire organisation.”
He added that it’s vital to measure your progress and hold individuals accountable for ‘agreed deliverables’. In other words, embrace success and acknowledge failures as earning opportunities. This will enable staff to build confidence and make better decisions, claimed Fotheringham.
“Implementing strategy effectively isn’t easy but it can be managed better by adhering to a consistent and simple continuous improvement framework. While technical expertise can support the process ultimately, successful change comes from the commitment from the leadership team and their willingness to lead by example,” he said.
Do you agree with Fotheringham's assessment? Have your say below.
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