In the rollercoaster ride that is the financial advice world, practitioners and their teams might feel like they’re stuck in an M.C. Escher painting, with every twist and turn leading to yet another challenge. Between Michelle Levy’s Quality of Advice Review, ChatGPT, volatile markets, and not to mention the occasional pandemic, the temptation to adopt a “wait and see” approach before investing in change is strong.
But fear not! No matter your role, by embracing the Kaizen theory of small, incremental improvements, you can start fine-tuning your advice practice’s efficiency right now, without breaking the bank or your sanity.
No matter where we’re going, it won’t be on horseback
The McKinsey 3 Horizon Model teaches us the importance of setting long-term goals while using short-term growth opportunities as stepping stones.
Even when the endgame is as transformative as swapping a horse and carriage for an automobile, there’s always room for incremental progress.
To use that analogy, if we currently ride horses in our business practice, and in the future form of the business (at Horizon 3) we will use automobiles, that would be a transformative change, so it feels like there’s nothing to be done between here and there. Saying there’s nothing we can do would be silly. We wouldn’t invest in saddles or horseshoes, but we could invest in roads and maps.
For instance, in our article here, we cover how client expectations regarding written advice won’t change regardless of changing regulations. Additionally, the Quality of Advice Report recommends removing the ‘looking back’ component of Fee Disclosure Statements but does not suggest eliminating them altogether. So, it’s still a ripe area for investment.
While some aspects of the advice process may change, there’s still plenty of room for investment in improvements. As the wise Ferris Bueller once said, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” So, let’s not miss the opportunities for change right in front of us.
A Kaizen approach: Small steps, small wins, and far less paralysis
Change doesn’t need to be as earth-shattering to be beneficial. In fact, small changes often come with the lowest cost, risk, and decision-making input. In “The Spirit of Kaizen,” Robert Maurer Ph.D. emphasises the power of thinking in terms of small changes, asking, “What’s the smallest possible change that could help solve a problem?”
This mindset allows us to think within our locus of control, budget, and time constraints.
In one advice practice we worked with, team members complained about noise carrying in the office and being distracting. Management was considering options for redesigning the office or expanding the area they had. When looking for a small way to improve, implementing a ‘Quiet time’ for two hours each day was one idea that could at least mitigate the issue, using only some basic rules for when team members should make noise or interrupt one another.
Ultimately, whether two hours of concentration was all they needed, or a greater awareness of the impact noise had on others did the trick, it no longer presented an issue for the team.
Baby steps count, as long as you are going forward. You add them all up, and one day you look back and you’ll be surprised at where you might get to.Chris Gardner
In another example, one firm reported a high incidence of mistakes in administration and a high workload. The issue had become so bad that forms would be triple-checked, with three individuals reviewing each form in an attempt to avoid mistakes.
The end result was a massive time-sink within the business and a lack of responsibility among team members. Those who were checking assumed that the person familiar with the client and the work would do their job correctly, while those who were doing the work relied on someone else to catch any errors during the checking process. This division of responsibility ultimately led to the elimination of individual accountability.
By removing the step, the team didn’t lose anything in quality but did gain in time right away.
These small changes required a total budget of $0 and took five minutes in the next team meeting to implement.
Efficiency isn’t always about time savings
While time-saving measures are important, efficiency can take many forms. At Simply Kaizen, the focus is on finding the trifecta of improved client experience, enhanced efficiency, and reduced risk. Any improvement in one of these areas without a trade-off is a step towards greater efficiency.
For example, reviewing your templates to ensure they better match the needs of your client at each point in your client journey can be an easy way to improve the client experience without negatively impacting the cost to serve or increasing risk. The timing of steps can also be relevant, where bringing forward existing steps that add value to the client or deferring steps that are negative to the experience, all could improve the perceived client experience overall.
In terms of risk management, applying the Swiss Cheese Model to advice, as outlined in this article, can all cumulatively help reduce risk even though no single item will guarantee a process is risk-free.
For example, confirming outcomes from a client meeting (when done promptly) doesn’t just complement time already being spent on a file note, but reduces the risk of misunderstanding and provides a more robust paper trail than a file note alone.
Try one small change, today
In conclusion, embracing the Kaizen approach and focusing on small, incremental changes can enhance efficiency in your advice practice and empower everyone on your team.
Take a moment to reflect on your current processes and identify one small change you can implement today. Share this article with your team to spark conversation and inspire everyone to think about ways to improve.
Improving by 1% isn’t particularly notable, sometimes it isn’t even noticeable, but it can be far more meaningful – especially in the long run.James Clear, author of Atomic Habits
If you’re struggling for ideas, our blog is full of different takes on a range of challenges (38 and counting!) where you can find inspiration for your next efficiency breakthrough.
Don’t forget to share your experiences and insights with us by leaving a comment below or reaching out on social media. Together, we can continue to learn, grow, and make positive changes in the world of financial advice.
If you need more change, smarter change, or more efficient change with fewer missteps along the way, book a time with us and see how we might be able to help transform your business to be ready for your next growth horizon.