Bruce WrightBruce Wright Chairman,
The Wright Company
FINANCIAL SERVICES NEWS



The Next Great Thing, Could It Be You?

Meaningful innovation has long been a cornerstone of great success.  The secret to innovation lies in ones ability to markedly improve something which already exists or, in rare cases, to completely revolutionize or change an industry, a culture -- or even the world.

One classic example of a revolutionary improvement is Gutenberg’s printing press.  While Gutenberg didn’t invent written language, his great innovation made written language more accessible.  Ultimately, this had a great and lasting impact upon culture, politics, finance, literacy and religion throughout the whole world.

Other great innovations started off innocently and proved to exert enormous impact on the world.  For example Elvis Presley’s unique interpretation of music, Motown’s incredible run of hit records, and its impact on reducing the barrier of racial prejudice worldwide.

Question:  is the mouse out of the box?  Do you remember when “user friendly” was the oxymoron applied to personal computers.  Perhaps, the most "user friendly" innovation found on nearly every desk in America today is the “mouse.”  In his book Rules for Revolutionaries, Guy Kawasaki tells the story of how nearly every computer company rejected the mouse -- because it didn’t fit the parameters of machines or existing software.  See the twisted logic?  Since the mouse was not an "in the box" solution of companies such as IBM, it was dismissed as an insignificant gimmicky toy.

When Elvis Presley was scheduled to perform several songs at the Grand Ole Oprey, his show was interrupted.  His music was considered offensive by many in the audience as well as management.  Elvis delivered only one song before he was told to leave and never come back.  The Beatles were rejected by every record label in England.  Apparently the boys didn’t quite fit within the model accepted by the record company executives.  It seems their music didn’t have the sound or feel the industry was looking for.  That's how it is with nearly all truly innovative ideas.  The status quo culture is always uncomfortable with new ideas.  Innovation is offensive to the thinking and behavior of the prevailing model.

My friend Bob Davies, author of The Sky is Not the Limit, You Are, uses this picture to describe status quo thinking.  The concept is covered fully in my book The Wright Exit Strategy: Wealth, How to Create It, Keep It, and Use It.  It's also covered extensively in my essay “The Revolution in Financial Services”.

Meet "The Square Wheel Tribe."  I like to refer to the people in that illustration as “The Square Wheel Tribe.”  From the outside looking in, we can see that they could dramatically improve efficiency and effectiveness by replacing their square wheels with the round ones they have in their cart.  That's an obvious remedy from our perspective, but it's all but impossible from theirs.  You can identify “The Square Wheel Tribe” simply by watching how they respond to new ideas or proposed changes in standard business process.

“If it ain’t broke, don’t fix it.”

“That’s not the way we do things here.”

“We have our own research and development people.”

Can you hear those computer company executives of long ago:  “You call it a mouse?  Disgusting!  You plug it in where?  Absurd!  Well, that won’t work for us.  It won’t even run with our software.  Our machines are serious;  we don’t have any place where you can plug that silly thing in.  You don’t expect us to redesign our products around your ridiculous little toy do you?  Don’t you know who we are?”

One of my personal favorite "Square Wheel rejections" is this one.  “We tried something almost exactly like what you’re suggesting, but it didn’t work.”  This attitude begs this question:  if you buy the same shoes that Michael Jordan uses, but find that you still cannot slam dunk, does that mean nobody else can slam dunk either?  Some people would blame the shoes rather than their own lack of jumping ability.  Let’s not forget the year that the NBA Slam Dunking Champion was Mr. Spud Web, a five-foot-seven-inch guard.  Some people are athletically more capable of jumping higher, and some are more prone to innovation.  Just because somebody tried something once and failed does not mean that others will not succeed.

In the course of our careers, we sometimes encounter people who want to be innovative but are just hopelessly delusional.  In his book Leading the Revolution Gary Hamel cites Double Stuff Oreos and Lemon Scented Tide as delusional attempts at innovation.  They're delusional because neither is much of a change, and they certainly can't be called "innovative." 

How to be innovative.  In short, to lead a revolution, or be innovative, you must radically change your thinking and, just as importantly, you must alter the way your business is done.  This means you have to change what you do and how you do it in radical fashion.

The financial services arena hasn’t had a meaningful innovation in a long time.  Most of the so-called innovations are simply the natural outcome from the spread of the Internet, or a repackaging of old products or ideas.  Can’t you just see some executives sitting around the headquarters conference table?  Their conversation might have sounded like this:

Bill:  What we need is something truly innovative, something that really sets us apart from all of our competitors.

Bob: Yeah, I know what you mean.  Hey, I’ve got an idea!  Let’s create a new mutual fund, attach it to an annuity and call it the “Super Premium Total Legacy Solution!”

Bill: That sounds swell Bob.  Did you come up with that all on your own?

Bob: Yes I did.

Bill: That’s amazing.  Would you like a Double Stuff Oreo with your coffee?  They are the latest innovation in cookies.

Members of the square wheel tribe have something else in common.  They virtually never self assess themselves as "square wheelers."  If you read the above example and think that Bob’s idea for the “Super Premium Total Legacy Solution” or Double Stuff Oreos sound like great, innovative ideas, then you are probably a member of the square wheel tribe, too. 

If everyone else is doing the same thing then it isn’t innovative or value added.  Nowadays, nearly everyone is concerned about the Internet’s impact upon their business.  When a meaningful innovative technology comes along, you must adjust your behavior or it may kill your business.  The Internet simply makes more information available and more transactions possible at a lower cost.  Intermediaries such as financial advisors who behave transactionally are being "disintermediated" out of the market.  Most of them don’t realize why or what to do about it.  They often talk about bringing “value added” services to the market, but their definition of value added sounds suspiciously the same at every company.  Here is another important key to innovation, if everyone else is doing the same thing then it isn’t innovative or value added.

The railroad and the telegraph disintermediated the Pony Express.  It wasn’t personal, it was just a more efficient method of distributing information.  By focusing on what the railroad and telegraph could not do, a new and innovative business boomed.  It was the messenger service.  When bicycles came along, this new business boomed even further.  Even today, successful bicycle messenger companies thrive.  They use the Internet to increase their efficiency, but their methodology is effective at certain things the Internet cannot do.

Understanding efficiency versus effectiveness is critical to innovators.  Just because something is efficient doesn’t necessarily mean that it is effective.  Here is my point.  To avoid disintermediation you must provide something which both effectively and efficiently satisfies a need that is not answered by technology or competitors.  Simply put, you must become what your competitor is not.  You must out-innovate the competition.  You must discover what the market needs but no one else is currently delivering.  You must be willing to learn or grow in ways the Square Wheel Tribe isn't.

The mouse that roared.  In essence, “The Next Great Thing” virtually always changes the game in ways unimagined by your competitors or target market.  Becoming “The Next Great Thing” requires radical changes in thinking and behavior.  It won’t happen through a mere tweaking, i.e., adding a nice lemon scent to detergent or doubling stuff inside an Oreo.  Most of the time the market doesn’t know what it needs until it sees it.  The mouse was like that, wasn't it?  No focus group could even imagine it, but once consumers saw it, they had to have it.  The mouse was that magical thing which, combined with the right software, actually delivered what computer companies had been promising – a user-friendly personal computer.  The mouse roared and rocked the world.  Even IBM had to change its platforms, or it would have been killed by the “gimmicky toy” it had earlier rejected.  Is that eating crow or mouse?

How does this translate to you and your role as a financial advisor?  Well, it starts by responding to some difficult but critical questions with totally “outside the box” answers.  The key here is to come up with answers which would be very foreign to your competitors and at the same time, incredibly engaging and magnetic for your target market.  Anything less will not empower you to become “The Next Great Thing.”  Here are a few starter questions:

1.      What are the truly compelling reasons why clients, prospects and referral sources need you in their lives?

2.      What kind of intelligence can you offer that the Internet or other competitors fail to provide?

3.      What do you need to change about yourself or your company so ‘A’ level clients, prospects and referral sources will be magnetically attracted to you?

4.      Is what you do special enough that it clearly separates you from your competitors?

If you can answer those questions in a truly innovative “outside the box” way, you could become “The Next Great Thing” in the lives of your clients, prospects and referral sources.  At the same time, gaining a competitive advantage.  As a financial advisor, you will have to reinvent yourself.  You will have to actually become different from everyone else who 1) possesses the same licenses, 2) has the same kind of training and 3) offers the same products as you. 

The direct translation is this:  in order to even be relevant in the future, let alone to dominate your market, you must learn new things.  You must change yourself into what the market needs in the future.  You must get to the future first.  That means getting there ahead of your competitors.  Just think how wonderful it will be to have already mastered the skill sets your competitors will be scrambling to learn?  Having an obvious competitive advantage is essential if you want to dominate your market.  It's essential to the very existence of your business.

The Chinese have one symbol to represent both risk and opportunity.  You are standing at the crossroads of risk and opportunity.  You are facing the greatest business opportunity of your entire career.  You now have the opportunity to become “The Next Great Thing” if that's what you want.  Many of your colleagues and competitors will choose to remain the same.  After all, what they have been doing for a long time has been very profitable -- especially during the biggest bull market in history.  Perhaps the recent decline in the market is a minor correction.  So why change?  After all, change is difficult and scary. 

People who are innovative believe that people who embrace sameness and status quo – who stay the same and offer the same products – are actually facing the greatest risk. 

Some see opportunity and innovation as too risky.  Others (those who dominate their market) usually see innovation as essential to creating ongoing opportunity and competitive advantages.  It is all a matter of perspective.  Metaphorically speaking, you have the opportunity to become the financial services version of the next “mouse."  The questions only you can answer are these: When you see the simplicity of the solution, will you reject or embrace it?  Are you willing to learn and apply the new skill sets necessary for future market dominance?

 

Bruce R. Wright is the founder of several innovative companies.  Currently he serves as CEO and Chairman of The Wright Company.  Because he is dedicated to helping professional advisors develop and deploy strategies focused on market domination, Mr. Wright welcomes your comments, questions and ideas.  He can be reached at 1-800-997-2664.  For more information on The Wright Company or conferences, books, articles and essays by Mr. Wright, please visit us at www.thewrightco.com.

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