Facing a wildly uncertain future, solo advisers, national RIAs, fintech firms and the CEOs of familiar names are all working to navigate the uncertainty of the coronavirus pandemic and capitalize on its opportunity. Their refusal to take the situation sitting down, is precisely what is most likely to help them succeed.
We’ve been here before. Whether you point to the Tulip Mania in 1637 or the Spanish Flu of 1918, it is clear that, while timing and conditions may vary, disruptions and downturns are predictable events.
In 2000, at 27, with clients in Silicon Valley, I learned the hard way what Israelmore Ayivor meant when he said: “Your downfall is in your lack of preparation for your up-rise. If you don’t know this secret, you will remain on the floor, blaming your legs instead of your head!”
If you want to out-think, out-strategize, and out-execute your competition, mindset is a great place to start.
Open to opportunity
Threatening situations tend to throw us into survival mode, flooding our bodies with stress hormones and redirecting blood flow from the pre-frontal cortex (responsible for cognitive thought) to our heart and muscles. This helps us fight harder or flee faster, depending on what the situation calls for. Your brain processes more than 10 million bits of information per second, sorting through the full historical archive of your life for context, and then in a mere fifth of a second, it subconsciously processes the threat and dictates your response.
Anyone who has ever discounted a fee or kicked themselves for a business decision that should have been made differently knows all too well the side effects of stress. Simply put, stress makes you stupid.
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We are no longer living in caveman times. It is highly unlikely that any of us will be eaten by a hungry saber-tooth tiger. But some of us WILL struggle to stay afloat in these post-pandemic markets, while others will step into new levels of success. Just ask Peter Mallouk of Creative Planning.
When 2008 put the wind at his back, it was his mental state that led Peter to put his sails in front of the wind and decide in what direction to steer his strategy. He's grown the firm from $1 billion in 2008 to $28 billion today.
In stark contrast, many advisers are taking on any and all clients, discounting fees, over servicing, under-marketing and resisting the forces of change.
Neuroscience research by Cambridge Institute of Technology tells us that success is primarily driven by three factors: environment, skills and psychology (or mindset). Get ready to have your mind blown. Of the three, they determined that success is 80% mindset. When you get paid to think, the quality of your thoughts matters. In times like these, immensely.
Master your mindset
The next thinning of the herd in our profession is underway. Your job is not to resist the situation, but rather to master your mindset to get clear, get focused and get to work.
Be prepared to manage a sustained 30% downturn and have the margins to operate on a skinny 50% if demanded. Have a crisis communication plan that spells out the who, what, when and how of communicating with clients for as long as the downturn lasts. Shift your digital marketing to align with the pain points and preferences of the times. Engage with COIs and influencer groups as the voice of advice. Identify strategic investments that support your goals and can slingshot you forward. Get really comfortable being uncomfortable.
This is the third major crisis my clients and I have weathered in almost as many decades. I’ve never pretended to know what comes next, but I have learned how to be prepared for it. It's not the conditions, but rather your mindset, that will determine whether you struggle to stay open for business or set a strategy that leaves you open for opportunity.
Get clear, get focused, and get to work.
Stephanie Bogan, a business strategist and high-performance coach, can be reached at [email protected].
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