Change management is hard at the best of times. Given the degree of regulatory change in financial advice, the pace of change to client expectations, and the breadth of technology solutions available, change is increasingly difficult and important at the same time.
Despite the challenge of change management that many of us have experienced, it’s not something that is planned for frequently enough. However, the disruption that change creates and the effort required to overcome the status quo are very real costs to the business.
In this article I’ll be outlining an approach which represents a significant body of work, but can be used to help identify the right opportunities for change, change that is worthwhile, and apply a change management overlay to the process. This helps identify low hanging fruit.
In this article I’ll be covering a four-step process you can use to identify quick wins from a change management perspective.
- Planning your three-horizon strategy and identifying key themes
- Identifying what will and won’t be impacted by that
- Prioritising initiatives
- Selecting a theme to pursue
1. Mapping out your three-horizons strategy
For fear of overstretching the analogy, you can’t identify the low hanging fruit if you don’t even know where the orchard is.
The McKinsey Three-Horizons Model1 is my favourite for planning and innovation in this space. In a nutshell, you map out:
- Target for Horizon 3, things you want start doing in 3-5 years;
- Target for Horizon 1, things you need to do to maintain/defend business for the next 6-18 months;
- Target for Horizon 2, things you want to start doing in the middle, which are either shorter term major items, or perhaps more importantly stepping-stones from Horizon 1 to Horizon 3 items.
And no, that’s not an error. Horizon 3 comes first (keeping the end in mind always), but rather than working backwards we bookend by jumping to Horizon 1 to cover the most pressing items right now. Horizon 2, whist potentially boring, is perhaps the hardest to craft as it is the bridge between Horizons 1 and 3.
Why this is critical
Once mapped, start looking at what you have up there (in particular Horizon 3) and identify the themes that you have. These may be well considered, these may require some thought.
I often use efficiency, client experience, and risk management. Others could include lead/referral generation, reducing cost, digital delivery, or engaging a younger demographic. Whatever it is, identify themes, and preferably no more than three.
2. What changes and what doesn’t
For the purposes of this article, we’re not going into detail on strategic planning. Whether you use the McKinsey model or not, the important part is consider your future state, what will change, what will improve, and what won’t change.
What will become completely redundant?
To leverage the old Henry Ford quote, if we’re planning to be building automobiles in five years there’s no point trying to breed faster horses.
Your equivalent to building automobiles might be a move to financial coaching2, 3, a transition to a new medium of SoA delivery4, a switch to own license5, or something entirely different. The point is, radical change will make large aspects of what you do currently completely redundant.
What existing infrastructure are we committed to?
Whilst I talk about technology often, that’s only a small part of what I mean. Major infrastructure that impacts our business model, client value proposition, or design. This might include:
- Being licensed by someone else;
- An adviser-support pod model;
- Growth through acquisition, or not;
- A high-service structure, or an accessible low-cost model.
Of course, everything is subject to change at any given time. However, if we don’t commit to anything, then we become paralysed and unable to invest time or money into change.
What won’t change?
There is a lot that can be improved within a business regardless of what is coming in our Horizon 3. This could include:
- Our values.
- The number of touchpoints we have with clients and content of most of those touchpoints.
- How we conduct modelling/projections.
- Our implementation processes.
- How we write file notes (See: Rethinking the not so humble file note) .
- Our meeting agendas.
- Much, much, more.
Why this is critical
3. Prioritising ideas
Once we know what’s left, we can brainstorm ideas for improvement that won’t become irrelevant due to other larger-scale projects.
Borrowing the base concept from the Lean Startup community, I recommend plotting these into a 2×2 matrix on an XY axis, with X being effort and Y being value. For me, this would be on a whiteboard with post-it notes for the individual ideas, but it can be anything. It’ll look something like this:
Note: When conducting this exercise, consider these in relative terms. Something of immense effort shouldn’t sit alongside something of little effort. If you find yourself moving items around to create an approximate balance, that’s normal.
Remember those themes from when we used the Three Horizons model? Now it is time to grab them and apply them.
Take a look at each idea and assign one of the themes to each one. Many will likely be relevant to more than one theme, however I’d recommend selecting the one most relevant for each item.
Using a whiteboard and circling those items with a set colour for each theme is a great way to do this.
Why this is critical
4. Selecting a theme
Time to step back and take a look at what we’ve created.
Looking at your 2×2 matrix themes, try to identify the theme with the most No-Brainers and least Distractions. That can then become your focus until we tick enough boxes to warrant a recalibration. I’d recommend this be no shorter than a couple of months to enable enough change to be meaningful, and can go up to a year depending on the ability of the organisation to make and affect change.
This builds on something I really enjoy from a change management perspective: Pursuing continuous improvement at the same time as planned transformational change, with both pointed at the same clear goal.
Why this is critical
- Vision is critical to change management success6, but it may as well not exist if it’s not clearly communicable. Unsurprisingly, an unrelated array of random wins are hard to get a team behind. (See: What Tony Abbott can teach us about cultural change)
- Without a noticeable impact, you miss an opportunity to create an incentive for future change. If we kicked a goal recently and can see the benefit it created, we’re motivated to try and kick another.
This process needn’t be a linear one. You can go back, revise and change as you learn and work through problems. Maybe a Horizon 1 item has been later identified as a distraction, or you feel a Horizon 3 item didn’t align with your values or broader strategic theme.
One thing I love about this process, is you can use to secure quick wins on one hand and still pursue transformational change on the other hand. By knowing where you plan to go, what won’t be impacted directly, but still working to a theme, it’s all one clear change management message.
I hope you found this useful. It can be challenging to get so much into a relatively bite-sized chunk. If you have any questions, please leave a comment below or schedule a virtual coffee with me to discuss.
What Tony Abbott can teach us about cultural change
Rethinking the note so humble File Note
1. Enduring ideas: The three horizons of growth, McKinsey & Company, December 2009
2. Is ‘wealth coaching’ the new financial planning? – Sydney Morning Herald, September 2018
3. Financial coaching a potential saving grace for advice – IFA, 17 June 2019
4. The Future of the SOA – Financial Planning Association of Australia, December 2019
5. Financial Planners Embrace Self-Licensing – RiskInfo, August 2019
6. 5 Components of Organisational Change – The Knoster Model – Medium, February 2019
Subscribe below for monthly updates direct to your inbox. In my next blog, I’ll be taking this same topic further to include some specific quick wins I like to target.