What have we learned so far?
Most of us have been in partial isolation mode for a few weeks and are settling into the rhythm of working from home in an attempt to keep our businesses functioning in a mode as close to normal as possible.
In financial services, we are generally lucky that, by and large, a lot of revenue is annuity like. FUM, although diminished by market downturn still continues to earn fees. Advice revenue, likewise reduced, continues to be charged and indeed many advisers feel they are earning their fees like never before.
But all of us have family members whose jobs have gone permanently, or who are “stood down”. So it’s not far from home for many of us to experience the fragility of our normal life. Perhaps this time of year, Easter, more than any other that makes us reflect on those things that are really important.
Such as taking the trouble to get in touch with friends we haven’t spoken to for a little while using Zoom or Skype.
Or enjoying chatting to neighbours – from a distance – or thanking the supermarket cashier – and really meaning it – because without the cashiers and shelf stackers, the delivery truck drivers and vegetable growers, how much more difficult would this period be.
Or reshaping our personal patterns – no gym but I have really appreciated a pot of Chinese tea, and can’t recommend MY Teahouse in Neutral Bay highly enough http://myteahouse.net.au/
At a personal level these lessons may change the way we view the importance of personal relations when the immediate effect of the virus is behind us.
But there are other lessons in commercial resilience which we can take from this period.
Look after your people
Richard Branson is quoted as saying “Staff come first – if you take care of your staff, they will take care of the clients” and this period has proven the truth of that. In a profession as personal as financial services, clients expect the organisation they deal with to treat their teams with deep respect. Fortunately, the government support packages have made it easier to retain staff, but for some this will require a considerable commitment.
Actively support Clients
Sustaining the relationships we have with our existing clients is critical. Advisers and those who support them, know that the reason clients are willing to grant us trust is because at periods like this, they receive a service in which they can have confidence. Because they don’t want to deal with an organisation that puts them on hold for 2 hours and then can’t answer simple questions like “What does this mean for me – personally?”
Build Resilient Systems
The trap in personal services organisations is always key person dependency. In part, advice is built on creating this sense of the uniqueness of the contribution of a small group of individuals. Their ability to understand each client’s circumstances, their ability to select stocks or funds, their capacity to interpret the outcomes for each client. But if COVID-19 has taught us anything it is that none of us are immune. From Boris Johnson to simple pensioners, the virus respects neither age, nor social status and it certainly doesn’t have the local effect of many other disasters such as floods or typhoons.
The initial outbreak affecting Wuhan started to unveil the dependency of Australia and the US as developed economies on a supply chain with tendrils that reached far away from the ultimate point of consumption. Who would have thought that 95% of US antibiotics were sourced from China? Who would have thought that a virus in China would have a secondary response of emptying the shelves of toilet paper and pasta?
So if COVID-19 has taught us one thing, it is to treat our businesses like systems that need resilience. This means the ability to withstand the shocks that can arise when; `
key team members aren’t available;
access to your normal premises and equipment is denied; and
markets become extremely volatile
Building resilience requires a clear articulation of what we are aiming to deliver to clients and the key inputs that are necessary to achieve that. Then how to create redundancy in those inputs. This operating mode could carry on for quite a while and one result will be that we keep asking ourselves, “What am I learning as we go?”
Have a good week.
Toby Potter