Financial Regulation – The Sword of Damocles?

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Running a successful financial institution comes with a plethora of responsibilities and pressures. Dealing with these effectively and continuing to move forward can be challenging and rewarding. When you throw an uncertain (even hostile?) regulatory environment that has been threatening to pull the rug out from under your feet for years, that’s a stress multiplier that has made some take a bunker mentality and just try to survive. While the bunker mentality is certainly a safe play, it makes it hard to be innovative or even keep pace with the competition.

Can you compare this environment to the tale of the Sword of Damocles? Damocles, a court attendant, traded places with King Dionysius after Damocles told the king how great his job was.  The king traded, but placed a sword over Damocles head that was held precariously by a horse hair to represent the constant pressure a leader faced. Damocles quickly wilted under the constant threat of the sword and gave up his position. (Wikipedia has a better summary of the tale)

This is similar to the current situation many financial institutions find themselves with the federal regulators placing a figurative sword over their heads. While the sword is figurative, the threat is very real. The big difference is the leadership of the financial institutions did not want to trade places with the regulatory body. In fact, they continue to appreciate the role of regulation in creating a healthy, consumer-focused business environment. The regulatory body just decided to place this “sword” over the financial service providers collective heads, periodically tweaking the tenuous string from which it is hanging to make sure everyone is aware of its presence. This threat has kept a large group of organizations from adapting to the changes in technology, consumer preferences, and competition. Who is benefiting from this situation? Consumers – no. Operators – no. Regulators – hmm.

I would argue that the regulatory environment many not stabilize until 2018, if then. There always seems to be something that continues to kick the “payday rules can” down the road another six months, right? Even if there is a change in leadership of the regulatory “king”, can you be assured that it will have a positive effect for your business or will it just create more uncertainty and continue the waiting game? How has the change at the executive office helped your business so far in 2017? I’m not being critical, some changes takes time and involve a lot of moving parts behind the scenes. My point is you can always find a reason to not act, but you need to take charge of your destiny and create your own environment that removes the sword from hanging over your head.

Innovation – Myths that are preventing your organization’s success

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The practice and discipline of innovation is critical to the sustained success of any organization. In 2013, PwC’s report Unleashing the power of innovation surveyed executives from around the world and 64% said that innovation and operational effectiveness were equally important to the success of any company. Yet, there are many companies that don’t initiate this practice, or even worse, discourage it from developing at all. Part of the reason for this is due to some myths on how innovation works in an organization. Here are a few of the common myths.

Innovation is only for large companies

While it is true that innovation is critical to help sustain large companies (see how the Fortune 500 has changed over the last 10 years), innovation is just as critical for the survival of smaller companies, if not more so. Small and medium sized companies are even more exposed and at risk to changes in competition, external environments, and technological disruptions. Being aware and constantly ready to change is paramount to sustained success.

Innovation requires a team of like-minded people

It’s true that your approach to innovation should have a group of people that are passionate about innovation, however, your group needs to have a nice mix of thinkers. This allows you to get different, valuable perspectives on solutions. It is especially helpful for organizations that have not been innovative to pull in outside resources to get started correctly. This provides added measures for success and brings in a fresh, unbiased perspective to provide alternative views and help move things forward.

Innovation is only good for brand new products and services

Umm, no. It is absolutely true that innovation can create a brand-new product offering, but it is not the only outcome of innovation. Many times, through the process of innovation, new processes will be created or, even better, improved processes are created. You don’t have to be a disruptor to claim innovative success. If you can get dramatic improvements in your existing processes, whether it is creating better margins or improving value to your customer, that is a great result.

Innovation takes too long

If you are hoping for a “one and done” approach to innovation, then yes, it may take too long. And yes, your innovation efforts will most-likely fail. If you take the approach that innovation is an ongoing part of your organization and it will never truly end, then the timeframe should not be an issue. The by-products of an innovation approach, if done correctly, will continue to improve the strength of your organization and add real value. It is important to understand that innovation will have its challenges. There will be times where a proposed innovative idea will not work out as expected. It is important at these times to fail fast, glean any data from the process that you can, and move to the next project. Oftentimes these “failures” provide valuable insight that provide real value.

Innovation is not a company-wide initiative

Look at companies that have started innovation initiatives that sputtered, stalled and failed. One of their common traits will be that their organization did not fully accept the innovation initiative. They also probably did not have a senior leader champion their efforts. If there is not complete buy-in from an organization with support from senior leadership, the chances of success are zero. Innovation does not happen in a vacuum.

Innovation interferes with our strategy

If your organization’s culture believes this, then it will be a problem. Innovation should be compliment of your strategy, not compete with your strategy. There is a need for organizational discipline when it comes to innovation. You can’t change directions on a whim and have the entire organization chase every new idea that comes up. There needs to be an innovation process that allows the organization to move forward and take advantage of innovation, not be distracted or mired down by innovation. This is another area where outside assistance can provide the guidance needed to create a successful innovation program.

In the same 2013 PwC survey, 57% of the executives said having the right culture to foster and support innovation is the most important ingredient for successful innovation at a company. Don’t let the common myths of innovation prevent you from taking the important first step. Innovation should be a permanent fixture in your organization to assist in your sustained success. The traits of the team that you assign this important function are critical to its success, along with the full backing of the organization. If you would like to further discuss the make-up of this team and how to start innovation in your organization, contact Incite Business.

Contact Incite Business

Is Apathy Hurting Your Business? Meh.

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If you are a business owner with employees or a manager of employees, you may have encountered employee apathy. You know, the employee that has been doing a great job and then all of a sudden they are not engaged, mistakes are happening, and possibly complaints from clients. When it gets to this point, the challenge of reversing the situation is pretty difficult. It’s not impossible, but it will take a willing effort from both parties.

Causes of employee apathy

There are a variety of reasons why an employee could become disengaged with your organization. Here are a few that may resonate with you:

  • They have been in their position for a long time and are now bored with their responsibilities
  • They feel they are not appreciated or acknowledged for their work
  • Poor performance by other employees is tolerated so there is no reason to try hard
  • Antiquated systems or processes make the organization uncompetitive and there is no plan for upgrades
  • Something in their personal life is affecting their work life

It is important to remember that you might not agree with their thought process on any of these items, but right or wrong, it is what they believe and is what is driving their thought process and behavior. It’s also important to be open to the idea that there may be some validity in their concerns. This is a great opportunity to salvage an employee relationship and possibly improve parts of your business.

Identifying employee apathy early

The faster you can identify when an employee is starting to become apathetic, the easier it is to help them change course. The nice byproduct of these solutions is that it should improve the overall communications and culture of your organization.

  • Have regular one-on-one checkins with your employees. You can do this formally or informally. Ask open-ended questions and then listen. “How are things going?” “How can we improve things?”
  • If possible, have group functions periodically. An informal lunch goes a long way to building relationships and keeping everyone engaged as a team.
  • Create a mechanism for employees to provide feedback. While this could be a formal process, it can also be as easy as having an open-door policy. If employees are empowered to bring things to your attention with the knowledge that you will actively listen and are interested in what they have to say, it will go a long way to keep them engaged.
  • Create a mechanism for clients to provide feedback. An easy way to do this is with a telephone call or an email. It doesn’t have to be elaborate and you can also use the same open-ended questions.

Unwinding meh

Hopefully apathy doesn’t happen frequently in your organization, but if it does, there are ways to help this situation. A lot of it comes down to you as the leader. You may have an organization-wide issue that you need to change such as improving workflow processes, implementing cross-training to give employees some variety, or creating more of a team environment. You may also need to improve your communication skills and sharpen your leadership skills.

As a leader in the organization, you need to be committed to staying engaged yourself. If you are working in the business instead of on the business, you may be missing key signals that are being sent by your team. Take this opportunity to take a hard look at your current situation and determine if there are areas that need some attention.

If you would like to discuss how to keep employees engaged and stop meh in further detail, please don’t hesitate to contact me.  I am here to help!

Contact Mike

 

Pause and Refocus

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I clearly remember back in 2014 when I started my new journey to become a business coach and consultant I was excited, nervous, and a little unsure about the best way to start. I jumped in and then stopped. What happened? I had the opportunity to acquire a company and it made too much sense to pass up. Instead of jumping into coaching and consulting I dove into an acquisition and then the post-close transition. I’ve been through a few of these and absolutely love the challenges associated with these transitions. I had the opportunity to work with a great team of people at HPS Process Service & Investigations and I continue to be thrilled with the level of service they provide. They’ve been doing it for over 30 years and really know their stuff!

About six months after my first attempt to jump in  I was ready for my second attempt. This time I decided to focus on one industry and mainly focus on the consulting side. A lot of time and energy was spent on creating fantastic programs to help companies transform into something new. The only problem? The industry wasn’t ready to buy what I was selling. Someone very wise told me “It’s not very fun to go to a dance when no one will dance with you.” So true! At that point I decided to take a pause and focus more on my two existing companies HPS and Get Smarter Prep and spend more time with my kids. While this happened I would ponder on what I wanted to do next.

One of the best things about coaching is providing clarity on next steps to others. Sometimes, with a little reflection, you can get your own clarity. Sometimes it takes a lot of reflection. I realized that I was at the same place I started back in 2014, ready to jump in and work on business coaching and consulting. I am less nervous, not unsure about the best way to start, and very excited. Will I get diverted by a new opportunity? Maybe. But that’s the best part of life – living it!