Promises, Promises...

The tradition of New Year's resolutions probably began in the year of 153 B.C., when the Romans named the first month of the year after Janus, the god of gates, doorways, and beginnings and endings. The two-headed Janus has been used to signify change and transitions, such as the progression of past to future, or of one condition to another. Naturally, Janus also became the symbol for resolutions. Many Romans resolved to do better in the coming year, and used the New Year as an opportunity to ask forgiveness from their enemies, or delivered gifts of sacred tree branches on New Year's Eve.

Doing Business With Friends

Jonathan Flaks carries the International Coach Federation distinction as being a Master Certified Coach. He is also a ClientWise coach who has been coaching advisors, entrepreneurs and executives since the beginning of the coaching movement in the late 1990's.

One of Jonathan's areas of expertise is in helping advisors to do business with friends. What follows is the result of an interview that I recently had with Jonathan, where he reveals his observations and insights on this important topic...which can be surprisingly problematic for many top advisors.

How to Manage Your Day Like Jack LaLanne

I grew up in San Francisco, and was in awe of Jack LaLanne. He was always doing wacky, impossibly difficult, physical feats, like:

•  Swimming from Alcatraz to Fisherman's Wharf while handcuffed (age 41)
• Swimming across the Golden Gate channel while towing a 2,500-pound boat (age 43)
• Swimming from Alcatraz to Fisherman's Wharf while handcuffed...and shackled, while towing a 1000-pound boat (age 60)

The dude was (is) a specimen! At 95-years young, he still has it. Every day, like clockwork, he still works out for two hours.

The key for him is, and always has been, ritual!

With this ritual in mind, I strongly encourage you to read this short article by Peter Bregman, in the Harvard Business Review, entitled "An 18-Minute Plan for Managing Your Day."

With elegant simplicity, Mr. Bregman outlines a 3-step process for managing your day:

1. Step 1 (5 minutes) Before turning on the computer, sit down with a blank piece of paper and decide what will make your day highly successful.
2. Step 2 (1 minute, every hour) Set your timepiece to ring every hour. When it rings, look at your list and ask yourself if you spent the last hour productively.
3. Step 3 (5 minutes) Shut off your computer. Review the day. What worked. Where were you focused? Where were you distracted? What learning did you gain to apply to your days in the future?

There you have it. What could be simpler? In fact, this sounds so brilliant...I'm going to try it myself.

I'll keep you posted.

All the best!

by Chris Holman

The $100,000 Dollar Client

Seth Godin is a thinker, entrepreneur, and author. He created the concept of "permission marketing", where marketers obtain permission before advancing to the next step in the purchasing process. Permission marketing is the opposite of its evil twin...interruption marketing. Those of us in the financial services community all know what "interruption marketing" is.

In 1998, Godin sold his company, Yoyodyne, to Yahoo for $30 million. Since then, he has authored 11 books. His blog, Seth's Blog, is ranked by AdAge Power as the #1 marketing blog out of 976 ranked.

With Seth's bona fides out of the way, let's point to a recent post of his, entitled, "Embracing Lifetime Value". In this post, he says..."Few businesses understand (really understand) just how much a customer is worth. Add to this the additional profit you get from a delighted customer spreading the word...it can easily double or triple the lifetime value."

Point well taken. Applying this observation to the world of financial advisors, how much is a client worth? For example, let's consider a a client who has placed $1 million with their advisor. Let's also assume that the annual fees on this account are 1%, and the lifetime of the account is 10 years. (Maybe 10 years is a bit long for a time frame, but not unreasonable to assume for a good client who you like.) In this scenario, the lifetime value of this client relationship would be $100,000...right? (Of course, to be exactly precise with this scenario we would need to calculate a net present value of $100,000 as discounted by inflation...but that's too much for any of us in a pre-tryptophan kinda mood!)

What would you be willing to invest to keep a $100,000 client absolutely delighted? In other words, is your present Client Service Model matrix sufficient to satisfy your best clients, or are you falling short? Also...what would be willing to invest to find one, two, or three more $100,000 clients? Does your 2010 marketing budget reflect this?

All good questions, and food for thought on this Thanksgiving holiday.

All the best to you!

by Chris Holman

The Gettysburg Address: Less is More

On this date in 1863, President Abraham Lincoln stood up in front of a crowd of 15,000 attendees, to dedicate a new national cemetery in Gettysburg, PA. He was not the featured speaker of the day. He followed Edward Everett, the Harvard University president and U.S. Senator. Everett had just delivered a  two-hour discourse that had described the Battle of Gettysburg in great detail, and had brought the audience to tears.

Lincoln pulled his speech from his pocket, and began in his rather high-pitched Kentucky twang, "Four score and seven years ago..." 10 sentences and 2 minutes later...Lincoln sat down before much of the audience had realized that he had even spoken. (btw...Lincoln did not read words that he had written on the back of an envelope, hastily composed on the train ride from Washington. This is an urban legend.)

Today, the Gettysburg Address is one of the most-quoted speeches in American history. In 272 words, Lincoln made an eloquent connection between the principles of the Declaration of Independence and the U.S. Constitution. Everett's 13,607 word oration? Not so much.

For an erudite discussion on this topic, you must read Gary Wills', "Lincoln at Gettysburg: The Words that Remade America".  In this masterpiece that was honored with the Pulitzer Prize and the National Book Critics Award, Wills provides a definitive deconstruction of one of America's greatest speeches.

by Chris Holman

Marshall Goldsmith on Change

Marshall Goldsmith is one of our country's most highly-regarded thought leaders and executive educators. Forbes recently put him on their list of "the most influential management gurus." His 2007 book "What Got You Here Won't Get You There", a NY Times best-seller, reveals one of the themes that runs through his writings, i.e. the same beliefs that lead to our success can make it very difficult to change our own behavior.

In a recent post on the Harvard Business Review, entitled "Don't Give Up on Change" Mr. Goldsmith discusses how, and why, change takes longer than we think. This is a timely piece for those of us looking ahead to 2010 with a desire to break free from some of our old traps.

Marshall Goldsmith offers these insights:

1. To have a real chance of success at change, one must take personal ownership and have the internal belief that "this will work if, and only if, I make it work."
2. Habits that have taken years to develop won't go away in a week. Set realistic time expectations for change.
3. In setting goals, it's important to accept that real change requires real work, i.e. there is a price for success.
4. Plan for diversions, and crises, along the way...that will distract you from your goals.
5. Once a goal-setter has put in the effort to achieve a goal...and achieved it...it doesn't get much easier. Meaningful change requires a lifetime of effort.

In the words of  the brilliant German philosopher and writer, Johann Wolfgang von Goethe, "Life belongs to the living, and he who lives must be prepared for changes."

by Chris Holman

Mission Statements in Six Words

Ernest Hemingway was one of our greatest authors of short stories. "The Complete Short Stories of Ernest Hemingway" is thought to contain some of Hemingway's best writing. There's a personal story about Hemingway, most likely apocryphal, that he once won a wager where another writer dared him to write a short story of six words or less. Hemingway's purported submission was, "For sale. Baby shoes. Never worn."

Picking up on this theme, Smith Magazine has recently sponsored a project whereby they have solicited their readers to submit their own memoirs...in six words or less. "Six-word Memoirs" has become a New York Times best seller. This is a great read. The entries are alternately...funny, revealing and poignant. Here are some submissions: "Made costly mistakes, learned valuable lessons." or "Wasn't born a redhead. Fixed that." or "Outcast. Picked last. Surprised them all."

6-Word Mission Statements
It is a valuable exercise to apply this same practice to Mission Statements. As you most likely know, a Mission Statement is a formal written statement of purpose of a company or organization. The Mission Statement guides the actions of the organization, spells out its overall goal, provides a sense of direction, and guides decision-making. The Mission Statement provides a context or framework within which the company's strategies are formulated.


In my view, many Mission Statements seem to be overly long, trite, boring, and not very compelling. On the other hand, some of the best Mission Statements are compact, convincing, and inspirational. From the corporate world, here are two standouts:


Google: To organize the world's information and make it universally accessible and useful.
3M: To solve unsolved problems innovatively.

6-Word Mission Statements for Financial Advisors
For financial advisors, your Mission Statement should answer the fundamental question of, "What gets you up in the morning?" or "What do you do, and why do you do it?" Additionally, you might also answer these important issues, "Who can you help?" and "What is your influence?"

Applying all of this to create Six-Word Mission Statements for financial advisors, here are some attempts:

• Wealth Management, and peace of mind.
• Make a difference. Lead. Coach. Teach
• Create strong relationships. Commitment to clients.
• Independent ideas. Topnotch advice. Independent wealth.

Now that I have the hang of it, here's a 6-Word Mission Statement for my own firm, ClientWise:

• Clear and focused. You too. ClientWise. 

Can you come up with a 6-Word Mission Statement that works for you, your clients, and future clients? Just wondering...

That's all for now. All the best!

By Chris Holman

Innovation: The 5 Discovery Skills

Innovation is one of the ten essential components that we, at ClientWise, have observed among top-performing financial advisors. These ten critical elements are the structure of the ClientWise Professional Advisory Model™.

In a recent study of 3000 executives, professors Jeff Dyer of Brigham Young University and Hal Gergesen of Insead identified the five "discovery skills" that are critical abilities of the creative executive:

1. Associating: The cognitive skill that allows creative people to make connections across seemingly unrelated questions, problems, or ideas.
2. Questioning; The ability to ask "what if", "why", and "why not" questions that challenge the status quo and open up the bigger picture.
3. Observe details: Especially the details of people's behavior. 
4. The ability to experiment: The executives surveyed were always trying new experiences and exploring new worlds.
5. Networking: Particularly with smart people who have little in common, but who can offer something to learn.

They found that associating is the key skill here...and questioning seems to turbo-charge the others: observing, experimenting, and networking.

When asked to comment on what conditions nurture and inspire innovation and creativity, the professors believe that many of us are far more discovery-driven than we realize...but even the most creative of people won't ask questions for fear of looking stupid, or because that know their organization won't allow it.

Professors Dyer and Gregersen are especially critical of how our schooling and training robs the inquisitiveness that fosters innovation. They note that 4 year-olds constantly ask questions, but 6 year-olds don't...possibly because teachers value the "right answers" more than the provocative question. The observe that high school students have no curiosity whatsoever, and by the time we've reached the corporate setting our curiosity has been squeezed out of us entirely (unless we work for Google or Apple). Finally, they reckon that 80% of executives spend less than 20% of their time on the discovery of new ideas.

Generally, the financial services industry is not an industry widely-known for creativity (unless one considers the invention and marketing of things like "sub-prime mortgages"...Don't get us started.) It is more of an industry of "me-too-iveness".However, given the fact that financial advisors have much flexibility in the business models that they create, as well as how they choose to interact with their current and future clients...one wonders about the possibilities for creativity and innovation?

In a completely different vein, and as our small tribute to creativity, we note that today is the birth anniversary of the Welsh poet, Dylan Thomas. One of his most-quoted works, "Do not go gentle into that good night" was written for his dying father...two years before his own tragic death at the age of 39.

His deep, resonant, Welsh voice may be a source of inspiration on this day.

by Chris Holman

Leadership: It's All About Responsibility

“Leadership is any position where you take responsibility for a group with a mission to fulfill.”…Bob Joss

Last month, Bob Joss retired as the dean of the Stanford Business School. From many angles, his 10-year career as dean, 1999-2009, was a raving success. He energized faculty and alumni after a period of extended malaise. In the face of the boom-bust of the dot-com era, he tripled the school's endowment to $1 billion. He launched a new, highly-personalized, MBA curriculum with emphasis on global content and leadership development.

As dean of one of the world’s best business schools, Bob Joss has had access to the thoughts of the world’s most highly-regarded business leaders, e.g. Steve Jobs, Jack Welch, Eric Schmidt, etc. As such, Dean Joss has an extraordinary and insightful perspective on leaders and leadership. In a culminating presentation that capped his career at Stanford, entitled, "Leadership Means Responsibility", Bob Joss shares the views from his unique vantage point…that reflect the observations culled from his 40+-year career. Some interesting thoughts include:

“At the top, it’s not about you…it’s about them.”

“Leaders find the words.”

“One can lead with no more than with a question in hand.”

“Transforming through others is the job at any level.”

For financial advisors and sales leaders, leadership is an important (and often overlooked) skill. When one considers the opportunities for advisors to lead, I can identify (at least) five different opportunities for financial advisors to do so: 

• They lead their team (even if it’s a team of two). 
• They lead their clients. 
• They lead their prospective future clients. 
• They lead within their office. 
• They lead within their communities.

In future posts, we will further investigate these Five Leaderships…especially from the perspective of financial leaders and sales leaders. Stay tuned.

Best to you…

by Chris Holman

Email is dead. Long live Email!

The very first email was sent by Ray Tomlinson in late 1971. Ray, a recent MIT grad and a 29 year-old programmer for Bolt, Beranek and Newman, was tinkering with finding a way to send messages person-to-person, between  two different computers. He had just started out at BBN, and was supposed to be working on another project entirely when he came up with an email system and address notation in about 5 hours time. (He's the guy responsible for the @ sign in every email address. That's him in the picture.)

Says Ray, "It seemed like a neat idea...there was no directive to go forth and invent email."

Today, 38 years later, more than 220 billion emails are sent daily. (That's 2 million per second)  In other words, in the ten seconds that you have spent reading this post so far...about 24 million more emails have been sent. Oops...there goes another 2 million...

For many financial advisors, email has emerged as their #1 communication tool. It is not unusual that an advisor and his/her team would receive, and send, 100+ emails daily (both internal and external). From a coaching vantage point, how advisors address their email inflow/outflow...from a time and interruption management perspective...is a pressing and problematic issue.

No Longer Effective?
Therefore, we were quite interested in this article the other day in the Wall Street Journal entitled, "Why Email No Longer Rules..." Written by the uber-connected journalist, Jessica Vascellaro, the article declares that the reign of email, as the king of communications, is over. She maintains that the new generation of communication services that have taken root, e.g. Twitter, Facebook, etc., will rewrite the way we communicate "in ways we can only imagine."


For example:

1. Expectation of Instantaneous Communication. Some of us old-timers may be creaky enough to remember hand-written notes, as well as the frustration of waiting a few days for a much anticipated letter. Today, we get miffed when a text takes an additional few seconds to get through.
2. Communications Less Personal, More Frequent. When 500 or so friends are kept up-to-date on the latest vacation sojourn, how personal is that?
3. TMI. With the constant torrent of communication, where we all seem to be firing off (and receiving) messages will-nilly, it is increasingly difficult to discern what's important, and what's not.

Although this piece didn't quite declare the death of email, it does sound some warning bells. The essential point is that our electronic communications habits are much different today. In the past, we communicated in discrete bursts...after booting up our computer, and signing into our email program, we send out our communications in spurts. Today, many of us are continuously-connected; consequently, our communications are pretty much absorbed into the full spectrum of our daily activities. This "always-on" connectivity is a mindset that is embraced by an increasingly larger portion of the population. In fact, over this past year the users of social-networking sites jumped by more than 31% to more than 300 million people.

The $64,000 question is whether the new communication mediums will save time, or drag us deeper into the vortex. The article concludes with a prescient comment, "...we will no doubt waste time communicating stuff that isn't meaningful, maybe at the expense of more meaningful conversation. Such as, say, talking to someone in person."

Amen! The reality for many advisors is that they can become surprisingly isolated...from their clients, peers and colleagues. Despite the advancement of electronic communication, and the enhanced ability to stay "connected"...there remains a subtle wall of separation between the communicating parties. With regard to meaningful dialogue, few things beat live conversations.

by Chris Holman

Selling is Dead!

I came across an insightful article the other day, entitled, "Sales is Dead." The author, Frank Reed, has 20-years of experience as a salesperson. His contention is that "selling" is destined for extinction, and salespeople are an endangered species. Rather than parapharasing his thoughts, he can speak for himself very ably right here:

"No longer is the “prospect” an unsuspecting, uneducated target who needs convincing that your offering is the ‘best of breed’. Those days are long gone in most industries. Now, if you are in sales you are really in business development. If you are good that is and you truly care about people and have a good solution for  them. The club tie and the firm handshake are no longer instant credibility gainers. No, in fact this kind of approach has produced the image of the slimy sales guy who is always on the prowl and never really cares about anything other than the ‘close’."

His conclusions are interesting:

1. Selling is really a relationship-building process of business development that "leads to a purchase that is based on understanding, education and trust in the product / service / company as well as the business development professional."
2. Client acquisition in business development is the establishment of a long term client due to trust and the ability for the customer to make a decision based more on their comfort level than your ability to sell them.

Although Mr. Reed's career has not taken him into the financial service arena, many of his observations seem to resonate in our industry.  As coaches who work with the top-performing financial advisors, we have observed that the brute-force marketing tactics, that may have worked 20 years ago, are dead and dying. In the 1980's, as a young advisor (we were called stockbrokers back then...another "bad" word) with E.F. Hutton, I recall direct mail campaigns offering free research reports...that garnered 10%+ response rates. Today, with unprecedented levels of skepticism on the part of the investing public, I can't even imagine response rates of 1%, let alone 10%.

 So...what's the alternative?

The obvious answer is to focus on the antithesis of mass prospecting, towards a much more selective approach that is based upon high levels of trust, e.g. introductions and referrals from clients and professionals. Notwithstanding the betrayals of con artists like Bernie Madoff and "Sir" Allen Stanford, high-trust approaches remain one of the most effective methods to establish new relationships. High-trust approaches work because there is a transfer of trust...from an esteemed client, friend or professional...back to the financial advisor.

As coaches, we have found that the most successful, high-performing advisors are those financial advisors who can comfortably take advantage of their high-trust relationships, by leveraging them in a friendly and direct manner. For example, financial advisors who reach out to a trusted (non-client) friend by saying..."We've known each other for some time, and I want you to know that our friendship comes first. So I wanted to ask your permission to have a larger conversation and possibly, to expand our relationship..."

Is this "selling", or is it a non-manipulative, respectful question that could lead to a fruitful, expanded discussion?


by Chris Holman

The Changing Role of the Financial Planner

In  Just the Way You Are, Barry White crooned these opening lyrics, "Don't go changing, to try and please me..." (Note: To give due credit to the original composer..."Just the Way You Are" is a Billy Joel tune, written as a birthday gift to his first wife. I just happen to like the Barry White version more.)


This song may come to mind while reading this thought-provoking article in the September issue of the Journal of Financial Planning, entitled, "The Changing Role of the Financial Planner Part 2: Prescriptions for Coaching and Life Planning"

The article stems from a survey of 2000+ CFPs...where it was revealed that 89% of respondents have engaged in some form of non-financial coaching and counseling. In fact, as much as 25% of the planner's job can be devoted to non-financial coaching.

As the article discloses, not all planners embrace this new, and emerging, role. The majority of planners surveyed do see life-planning and coaching as a value-added, and inevitable, service. However, a significant minority find this concept to be abhorrent and inconsistent with their mission...and are wary of the potential ethical and personal complications that might appear when planners tread on the life-planning ground.

The authors conclude that, like-it-or-not, planners will be presented with many more opportunities to assist their clients with non-traditional, non-financial planning. In their view, the planners who embrace this role will "realize the full potential of financial planning." For those that don't, that's OK too. Planners who put up a "firewall" that detaches them from life-planning issues can build good businesses too...that are circumscribed within the boundaries of traditional planning approaches.


by Chris Holman

A Day in the Life of a Producing Manager

You come in at 6:45 a.m. You turn on the lights, grab some coffee and begin to consider your day that is coming up.  

Strategy meeting before the market opens – and you will be talking about the wisdom of situational partnering with other advisors, and how this can jumpstart new business momentum.  You anticipate the groans already from the back of the room, where your top FA, LOS 35, always tries to be disruptive while you speak.  

Then it’s off to back-to-back client reviews until lunch, and some quick calls into recruits in the pipeline and some new leads you were given for your own business.  

Lunch – you are scheduled to grab some coffee with a potential recruit from the competition who could be a valuable addition to the office, if only her spouse wasn’t so leery of her leaving her current Firm given the economy….

Afternoon – you get back to the office around 1 pm and spend the next 90 minutes walking around, talking to the Financial Advisors and taking notes as you go:  need to address Sally’s client complaint, Fred is really quiet lately and not himself, and your biggest team in the office seems to showing tension between the senior and junior partners.  

4:30 The Office starts to empty out gradually.  By 7:30, you are still inputting your notes from your client reviews, updating your calendar for tomorrow, and working on your client seminar scheduled for the end of the week.  On the way home, you get a call from one of your Advisors who informs you that he just got an offer from the competition that he can’t refuse….

Sound familiar?

The balance between leading an office and producing is akin to the eternal search for the Holy Grail.  I’ve done scores of training classes around this and heard the best-of-the-best talk about how they try to wear both hats of leadership and producing.  I’m convinced now that there is still not one best way to manage it all.  It takes a leader with extraordinary discipline in organization, follow-through, attention to detail, patience, fantastic communication, great emotional intelligence who “reads others” quickly and accurately, and who has the ability to be equally strategic and tactical as the situation demands.  These traits are easier to write about than to accomplish!

Given my 20+ years of observations of of coaching and training the best-of-the-best, I would like to suggest the following best practice solutions that seem to help Producing Managers keep the balance in perspective:

1) Teaming up with a partner, or partners, especially once your production hits $500,000 or more.  At that point, it gets tougher to manage it all as a sole practitioner.  There simply isn’t enough time in the day to do both roles.  Teams can help offset your workload by allowing you to focus on what you do best, while allocating other roles and responsibilities to other team members.  Flip side: be clear from the start with your team that your leadership role will take time and attention away and they have to be prepared for that.  Most team partners are fine with this as long as you stay accountable for your results and tactical goals that you promised to deliver on.  But some partners over time get resentful if you are spending too much time on your leadership role, so the best bet is to check in often with your team to make sure they are fine with the balance you are trying to keep.

2) Divvy up the administrative and tactical roles with your management team as best as you can.  That is, work with your assistant to be clear on how she can help you with office tasks as well as covering your clients.  Having a strong and organized assistant is a must.  Also, develop a strong relationship with your compliance manager so that they are a true partner in helping you manage risk.

3) Stay organized and on top of your schedule.  A warming to all you “P’s” on the Myers Briggs.  Use Outlook or automated calendars with pop-up reminders to keep you well versed on what is coming up and what you must attend to.  Batch-process activities that beg for repetition and consistency, both in your own practice and in managing the office. Adopt a client service segmentation strategy for your practice that ensures clients don’t get lost in the cracks, and build a process around your new business development strategy so that you are tracking your leads and activities to bring in new business.   Similarly, create process around client reviews, develop a process for reviews for your advisors such as a pre-work sheet/questionnaire for them to fill out prior to their review that helps them prepare for their meeting with you.

4) Get people involved. Build a culture of raving fans that believe in your leadership and who trust you implicitly.  Have frequent strategy meetings.  Do idea-sharing and be the first to offer ideas to others to help grow their business.  Recognize achievement and take the time to really get to know your Advisors – not just their numbers, but what is important to them – their family, their core values, their hobbies.  Consistent reviews and coaching prevents mountains from developing from molehills.  Create a Board of Advisors in the office to guide you on office policy, community involvement and branding, and suggestions to improve the quality of work life (Assistants and Advisors should be invited to join in).

5) Develop a management team. Often there are some advisors who show a spark or interest in leadership early in their career.  Take an interest in them and develop them, and ask them to help you in small ways that create small wins for the office and build their burgeoning leadership skills. They can off-load activities, such as scheduling training programs, coaching new-hire Advisors and screening candidates for hire.
 

6) Time blocking is critical.  Not only are you modeling for the rest of the office, but it is critical to set aside time for your own business.  Many producing managers who are great at both roles have made the decision that while they don’t like to shut their doors, it is essential to have this time for their own business, and others will respect and honor this time if they see you doing it consistently.  Your assistant can also help screen potential emergencies from employees and clients during this time.

You’ve been blessed with strengths in two areas – the passion to lead your clients, and the passion to lead those in your office.  You have a huge task and, no doubt, will work much harder and put in longer work days and evenings than many of your colleagues.  For some of you, this becomes a test-drive for determining if you want to eventually be a full-time leader or Branch Office Manager.  For others, you’ll never want to give up the autonomy of having your own business while having an office to lead.  Either choice is great!  It depends upon what fills up that need inside of you.  By tapping into some of the solutions above, you won’t resolve the daily “Solomon-like” choice of where to attend your focus, but you’ll develop the necessary skills to keep the balance with a semblance of sanity and a great deal of passion.

by Dr. Steve Weiner

Recessionary Clouds and Silver Linings

Since 1955, Fortune magazine has published the Fortune 500, an annual ranking of the top 500 U.S. companies where revenues are publicly available. General Motors was #1 on the list in 1955 (see full list here), along with other names that have since fallen by the wayside e.g. Liebmann Breweries, Pocahontas Fuel, and Cuban-American Sugar. 

Today, as one looks at the Fortune 500, it is interesting to consider that more than 50% of the companies were founded during a recession or a bear market. In a recent study by the Ewing Marion Kauffman Foundation, “The Economic Future Just Happened”, it is revealed that an extraordinary 57% of the current Fortune 500 list of companies began during a recessionary period, or a bear market cycle. 

Additional findings of the study include:

• Recessions and bear markets do not appear to have a significantly negative impact on the formation and survival of new businesses.
• Job creation from start-ups is much less volatile and sensitive to downturns than job creation in the overall economy.

The report goes on to explore the reasons why stressful economic times might be fertile periods for the creation of new firms: 

• Rising unemployment, because it is often concentrated among large and established companies, can free up human capital.
• An unemployed individual with an entrepreneurial bent, and some measure of experience, may perceive a competitive opportunity to create a new company…as well as thinking there is nothing to lose.
• Entrepreneurs may target the unemployed as a potential pool of employees.
• The suppressed financial climate that surrounds a recessionary environment may be less relevant to a start-up company, than a less-new, growing company. 

In "Capitalism, Socialism and Democracy", Austrian economist Joseph Schumpeter coined the term "creative destruction" to describe the process of transformation and innovation...whereby innovative newcomers supplant the corporate behemoths. From the Kauffman study, one can intuit that the next generation of Fortune 500 companies was born during this recession. In 2008 and 2009, about one million new start-ups were founded. Some will fail. Others will shamble about. Many will prosper and flourish. A few hundred will show up on the Inc.500 in a few years, and a smaller number will be among the largest companies in 10-20 years. 

by Chris Holman

"Just Do It!"

Gary Gilmore was a villainous murderer who was executed by a firing squad in Utah in 1977. At the very end, when asked for any last words, he responded, “Let’s do it.”

11 years later, Dan Wieden, co-founder of the ad agency Wieden & Kennedy tweaked Gary Gilmore’s last words into one of most famous ad slogans of all-time, Nike’s “Just Do It.” (The genesis of this ad copy is explored in an acclaimed documentary by Doug Pray, entitled ( “Art & Copy.”)

Inadvertently, procrastinators everywhere have since adopted Gary Gilmore’s final utterance as their call-to-action.
 
Procrastination is the gap between intention and action. All of us procrastinate at times, not all of us are chronic procrastinators however. Not surprisingly, the ranks of procrastinators are growing. 30 years ago, just 5% of the US population was deemed to be procrastinators. Today, the number is closer to 20-25%. (One wonders if the growth of the internet might be a contributing factor. A recent study caluculated that 50% of the time that people are online is actually “procrastination time”.)


If nothing else, the subject of procrastination seems to be an industry all by itself. When one googles “procrastination”, 3.7 million entries pop up. Checking out Amazon.com, one finds 33,879 books on the subject (See here). Apparently, this is a condition that afflicts many of us.

Recent research studies indicate that procrastination might be the outcome of a battle between impulsivness, and the lure of future rewards. This can even be reflected in “The Procrastination Equation” where:

(The-liklihood-that-one-will-procrastinate) = E x V/I x D, where (E) is a person’s expectancy for succeeding at a given task, (V) is the value of a task, (I) is impulsiveness, and (D) is a person’s need for immediate gratification. Got that?

These thoughts, and more, are contained in two good articles in the most recent, Psychology Today.


For financial advisors, the temptation to procrastinate is omnipresent. Two primary enablers to procrastination are: Distraction and Uncertainty, both of whom are frequent guests in the world of the financial advisor. Reducing distractions is a straightforward enough activity, but never very easy. Shutting down email, timeblocking, selectively isolating oneself from extraneous distractions make complete sense (hypothetically) in order to maintain one’s focus. However, how do you respond to one of your best clients who wonders why you haven’t returned their “urgent” email of one hour ago?

As coaches, we have observed that changing the deep-seated patterns like procrastination often require getting to the heart of where these habits reside…which calls for a high-degree of self awareness. Procrastinators who attempt to change old behaviors on a superficial basis, without a readiness to explore and change, are fated towards failure. The good news is that, once recognized, procrastination can be controlled by using the skills of emotional intelligence and self-management.

Stay tuned. This is a topic that we will explore again. In the meantime, if you have thoughts, resources, books, etc. that have helped you slay the procrastination beast, please share them with us.

“Even if you’re on the right track, you’ll get run over if you just sit there.”…Will Rogers

By Chris Holman

True Grit!

Grit…Perseverance…Tenacity…Determination…Stick-to-itiveness!

Good article in the Boston Globe discusses how new scientific techniques are being developed to measure “grit” in individuals. One of the initial findings of the studies is that grit can be a better marker of future success than standard measures of intelligence, e.g. IQ.

http://www.boston.com/bostonglobe/ideas/articles/2009/08/02/the_truth_about_grit?mode=PF

One of the academic pioneers in the study of Grit is Angela Duckworth, a psychologist at the University of Pennsylvania. She says, “I first got interested in the study of grit after watching how my friends fared after college (Harvard). Those who were less successful were often just as smart and talented, but were constantly changing plans and trying something new. They never stuck with anything long enough to get really good at it.”

By the way, if you are so inclined, you should take Dr. Duckworth’s Grit Study…an assessment tool that evaluates where one falls on the grit spectrum.

http://www.sas.upenn.edu/~duckwort/images/17-item%20Grit%20and%20Ambition.040709.pdf

One of the interesting, and obvious, questions is…can “grit” be learned? Dr. Duckworth seems to think it can be. She refers to individuals having “fixed” and “growth” mindsets. Growth mindsets consider the possibilities, while fixed mindsets consider the limitations.

Not surprisingly, Dr. Duckworth’s observations parallel much of what we see at ClientWise within our coaching engagements. Those advisors who pursue their goals with focus and intention, and are able to open themselves to a bigger vision…are bound for success. In the words of William Feather, “Success seems to be largely a matter of hanging on after others have let go.”

By Chris Holman

Baby Boomer Entrepreneurs

In a fascinating new study by the Ewing Marion Kauffman Foundation, it was revealed that the Baby Boomer Generation, age’s 55-64 year-olds, had the highest rate of entrepreneurial activity of all generations.

Interestingly, Mark Zuckerberg’s Facebook generation, the 20-34 year-old types, was the least active in creating new startups. Go Boomers!

The reason for the Baby-Boomers’ entrepreneurial zeal is not surprising. They are living longer and healthier lives, and are not choosing the gold-watch-at-retirement-hit-the-golf-course path. Instead, they are leveraging their experience, skills, contacts, and other resources in order to pursuer their second, third, or more, careers.

For financial advisors with Boomer entrepreneurial clients, this trend has very interesting implications. Most importantly, how can financial advisors build comprehensive wealth advisor practices (and trusted advisor networks) that support their go-getter clients?

For example, to the extent that the advisor has assembled a healthy, diverse Trusted Advisor network of their own; they should actively make offer up introductions within this network. Additionally, as the Boomer entrepreneurs assembles their own network as they build out their new company, the advisor should be all over that too.

http://www.kauffman.org/uploadedFiles/the-coming-entrepreneurial-boom.pdf

Authored By Chris Holman

The Secret Sauce for Entrepreneurial Success

  “Success seems to be largely a matter of hanging on after others have let go.”...William Feather


In the July issue of Training and Development, there is an insightful article on entrepreneurial learning: what, and how, entrepreneurs learn.

http://www.astd.org/TD/Archives/2009/TOC/0907_TOC.htm

The author, Mike MacPherson, draws upon the biographies of famous entrepreneurs and business leaders and uncovers patterns of what they learn, and how they learn it.

One of the examples of entrepreneurial learning that he cites is that of Ray Kroc, the founder of McDonalds. Actually Ray Kroc wasn’t the founder of the original McDonalds restaurant…he purchased the San Bernardino-based drive-in from Dick and Mac McDonald, with intention of taking the restaurant concept national. After the purchase, one of the lingering issues for Kroc was the French Fries. Despite extensive trial-and-error, they were too mushy...and lacked the crispy quality that he wanted.

In desperation, he turned to the Potato and Onion Association for help. With their assistance, Kroc discovered that the McDonald brothers had (unknowingly) created a natural curing process for their potatoes that dried them out from the desert breezes, and turned the sugars to starch.

How Kroc solved the French fryquandary…using problem-solving, questioning, reading, listening, experts, self-directed learning…is a model example of how entrepreneurs learn.

Of course, financial advisors are entrepreneurs themselves…driven by their compelling vision and desire. Using the ClientWise Professional Advisory Model, we encourage financial advisors to build their creative capacity to acquire and use the information that will be instrumental to their business success.

Authored By Chris Holman