Digital moneyball

Billy Beane of the Oakland A’s was baseball’s first digital leader. His 2002 team set the major league record for consecutive wins and took their divisional title — with a human player payroll one-third that of the top-paying teams. The league commissioner called them an “aberration,” but were they? The Boston Red Sox and Chicago Cubs later embraced similar analytics as part of their strategy, and both won the World Series.

“Moneyball” author Michael Lewis observes that the 2002 A’s paid about $500,000 per win. Only one other team was in six figures, and “the most profligate” teams paid more than $3 million — per win. Which is pretty much the objective, winning games. Unique to baseball? Consider last year’s Super Bowl matchup between the New England Patriots and their legendary coach Bill Belichick, 67, and the LA Rams data-intensive leader, Sean McVay, only 33.

The future of financial advice is a blend of human and digital capabilities — we hear that every day now. But what does that mean? I think it means what most “innovation” has always implied: Machines take over tasks previously performed by humans, freeing up the humans to do what only humans can do.

There’s an additional perspective: Humans eat food and machines live on data. So my definition of a digital leader is a person who knows how to acquire and deploy machines — fed by data — to free up people to do what only people can do.

In major league baseball, that means a coach who does not rely on his “gut” or a scout who can see beyond the player’s physical profile. In the financial advice industry, that role is all about connecting personally, emotionally and professionally with clients. And you need a real human to lead those people, in both arenas.

Here are the qualities of a digital leader.

Technical knowledge. If technology has so much potential, why don’t more leaders spend more time learning about how to capture that potential? Many financial company execs lack the innate curiosity to identify real game changers, delegating that effort to subordinates who may not have the bigger company vision.

And technical knowledge doesn’t end with the application’s use. It means understanding how to evaluate effectiveness, compare alternatives and support adoption. Integrating data into daily operations is a critical indicator of technical savvy, along with the ability to really understand what the data says and having the confidence to take action. But you have to want to do it.

Connectivity. Every tech solution fits into a bigger ecosystem, so it’s critical for the leader to know the impact alongside existing and future components. The sequence is important — new tools are first enablers, leveraging the current system, reducing human effort and/or adding insights on a greater scale with more consistency.

The future of wealth management is a combination of human and digital capabilities, and the successful digital leader creates the inclusive role of tech, aligns and merges with the human effort and helps with the critical path to better adoption. Done correctly, tech becomes invisible, augmenting the client experience through easier, simpler and more intuitive interactions, and eliminating the drudgery for employees.

[More: Adoption is the new innovation]

Transparency. Transparency is both an organizational value and a management tool. Once connectivity of digital and human solutions is established, transparency displays those relationships and reinforces their value across the organization.

Team members see the design and can then better understand their role in supporting and growing the business; they learn process, the “how we are doing what we are doing.”

Management oversight, associate adoption and ecosystem integration all depend on a shared knowledge of each component’s role. If all parties can see the deployment and its progress, that builds knowledge and confidence for all future installations. Transparency also unlocks innovation from the broader team where new ideas may be created.

[Recommended video: Personalization and custom communications are key to the evolving client experience]​

Accountability. Digital capabilities and data are the backbone of monitoring how the organization is doing, but too often the tech itself escapes equivalent scrutiny. The digital leader needs to know how the tech adds value and how to measure contribution.

Long gone are the days when the head of operations (old tech) could brush away management oversight by claiming, “You wouldn’t understand.”

The effective leader takes the extra time needed to educate senior management about the value represented by any major digital capability and how to measure its impact. Otherwise she is likely to face frustrating superficial comments about reducing the spend or increasing the numbers of whatever task expected of the application under review.

Not knowing how to manage approval of technology spend is one of the true blind spots of many senior leadership teams. Not wanting to do it is no longer an option.

[More: It‘s time for leadership, not just innovation]

Vision. Perhaps the most important role of any leader is to supply the organization’s vision — where we are going and why. Yet a perennial finding of employee engagement surveys is, “I don’t know where the company is going,” — or worse, “Senior management does not know where we are going.”

The precondition for leadership is “followship.” The team needs to have not just aligned visions — they have to be the same vision.

This connection is especially critical for the digital leader because friction between “the business” and “IT” is common and is typically rooted in a historic conflict of perspective. The business is often run by sales-oriented folks and the IT team could have a nerd or two.

These personalities aren’t a natural fit, so someone has to work on improving the dialogue. “Agile” is the consulting industry’s answer for this challenge of cooperation, but it starts with the commitment of the digital leader to have one vision and one playbook.

Relevance. Relevance is a frequently overlooked communication principle that emanates from two critical facets of human nature — perspective and time horizon. Effective leaders understand that different people can have wildly differing views about almost everything — even when facts are displayed to all. Look no further than our current political arena for confirmation.

Time is another dimension that varies by individual. Many leaders assume employees share not just their organizational vision, but have a common time horizon and an aligned perspective for how to support the business. The effective digital leader knows better and works hard to provide relevance in the form of expected timeline for each major milestone and then tie the mission back to each role in the firm.

Ultimately it is about helping each person know their role, their expected contribution and how long it will take to get there.

Don’t wait for the semi-annual review for encouragement or course correction. Every person wants to know what’s expected of them, how they can succeed and what makes a good day.

This is especially important with long transformations or installations. It will be a long road — bring snacks.

Authenticity. This is the true test of the digital leader, of any leader. You have to live the mission, champion the values and model the expected behaviors. And in the age of customer experience, that means far more listening than talking, as well as being with the people.

But the same principles apply to the digital components of your game plan. “Listen” to the data and understand what they’re telling you. Don’t brush it off in favor of your “experience” or your gut instinct. If you don’t use it or don’t know how, what’s the point of the investment?

There’s no faster way to lose your brightest digital leaders than to denigrate their output. Adding value as a manager today requires a pivot by those who grew up in a simpler time. Your job now more than ever is to remove obstacles to learning because we learn more every day that reveals opportunity. Admitting what you don’t know and revealing your flexibility to learn new insights is the pinnacle of leadership. Go ahead — be vulnerable. You’ll get better results and inspire your followship to do the same.

Of course there’s an eighth characteristic that defines all the best leaders and especially the digital pioneer — persistence. The digital leader confronts more obstacles and resistance than any other member of the senior team. That takes fortitude, but also empathy for the humans fearing additional complexity of their jobs, accountability or the possible elimination of their role.

Those fears can help provide the common purpose for your organization. Take them on — that’s what great leaders do. The digital leader gains an advantage over more traditional executives by embracing the insights of data and the leverage of technology tools. By listening to the data and engaging the tech he can more confidently let the organization be guided by that “informed persistence.”

It’s still hard work to succeed, but information and digital leverage can help you make better decisions and better guide your team, especially when you need to make a big move or shift direction.

Despite having been a top major league prospect in 1980, Billy Beane failed as a player. He was the model of what scouts seek — a player with physical gifts and a stunning junior career — and he created a new model for the sport using more reliable analytics.

Stay tuned for more and reserve your spot Nov. 20 in New York City when IN hosts The Future of Financial Advice​ — an intimate leadership forum featuring some of the industry’s most successful executives.

Steve Gresham is a wealth management industry consultant and Whealthtech investor. He was formerly head of of the Fidelity Private Client Group. See more at thegreshamco.com