Embracing the world of exponential thinking
A lot has been said and written about the new world that we are living in and how this is influencing the financial services industry.
Many companies have gone through extensive processes to future proof their businesses. Future proofing is looking into the crystal ball and trying to predict what the world will look like in the near future. The best example of this is Apple and the evolution of the iPod which effectively opened the world of digital music to the public.
The driver
The main reason Apple succeeded at this is because of the realisation that the future consumption of music will predominantly be done over the internet. How does this relate to the financial services industry? Well, look at the role of technology and the effects of it on your business model. Now work with the quantum of three because experts predict that by 2020, the number of mobile devices will outnumber the world’s population by 3/1.
Future proofing your business was the general theme at the recently held Santam Conference where guest speaker Anton Musgrave, a Futurist and Senior Partner at Future World International, gave his particular insight on how to future proof your brokerage.
“The main aspect that we need to come to terms with is that the world is going through a churn (transformation), and there is a Hindu philosophy which states that when the world goes through these series of churns, either good or bad things can come out of it,” Musgrave added.
“We cannot be negative about this. We need to take heart from the words of Google CEO Larry Page who said that we need to look at the future, decide what it is going to be, and how we are going to create it. We then need to focus our organisations on how to achieve this,” said Musgrave.
Our current reality
What is the current reality we are facing which is preventing us from being futuristic? Musgrave felt that it could be argued that brokers are too focused on the present and that they don’t look over the wall to see what the grass looks like on the other side.
“As humans, we fill our minds with memories of the past and get clouded with the noise of the past while looking at the future. This is preventing us from making the appropriate key decisions for our business,” said Musgrave.
When this happens, what do we do? We do a SWOT analysis. While this has been an effective intervention in the past, the SWOT analysis has been regulated from an effective intervention to an effective short-term planning tool, according to Musgrave.
Moving forward
What you need to realise is that you as a broker will take hits during your career. But it’s not about whether you can take a hit, it’s about whether you can take a hit but continue to move forward, because that is how winning is done.
“We are used to living in a world which is defined by cause and effect. Our actions will have specific effects on our clients. In a world which is being defined by technology, there are new rules, and we need to come to terms with new laws regarding cause and effect,” said Musgrave.
This is being defined by the fact that we are moving away from an industrialised economy to a new type of economy. This economy will be filled with new enterprises that think radically differently to the way in which they thought before. Therefore, the way in which you work with your clients needs to shift. You need to manage them fundamentally differently in this new world.
How do we do this?
First of all, we need to see how our clients interact with the world and how they define themselves. They have a significant online presence which is governed by algorithms. Musgrave pointed out that this means that the mathematics of life is becoming significantly important.
A key element in this is that these algorithms do not think linearly, but exponentially. Linear thinking comes up with four or five possible solutions, exponential thinking comes up with a multitude of solutions; just think of the success of Google. Musgrave pointed out that we also need to think in an exponential manner.
The next element is personalisation. The days of a blanket offering are becoming extinct in the new world as clients look for personalisation. “This is tied with exponential thinking. Based on a person’s internet browsing habits, Google will bring up a different set of results for two people who are searching the same thing; and they will both be correct,” said Musgrave. We must then look at our clients and identify the aspects defining their reality and offer solutions surrounding that.
Editor’s Thoughts:
This demands a whole new approach by brokers who have to effectively reprogram their way of thinking in order to become relevant to the new age client. While it seems easy to talk about it the reality is that it is a lot harder for the brokers who have been in the industry for 20 years. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
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