The Adoption of Planning in your Organization/Practice and “Atomic Habits”

If you haven't read Atomic Habits by James Cleary, pick it up (and a thank you to Joe Sicchitano, Head of Financial Planning at SunTrust for the recommendation). Like many books, it's a good read that in the end you might say is "common sense". But the realities are that he makes the challenge of achieving behavioral change very straightforward and scientific. Whether the goal is to lose weight, get in shape, or drive change in your organization, this book provides some great insights into making that happen.

The Keys

First, and what I found very compelling, was the root of true change in the long-term is the change in your habits. And it’s small changes that compound over time that lead to the best outcomes. It’s like compound interest; the compounding seems small early on, but the impact becomes exponential over time.

Long-Term Change is Rooted in “Identity”

Here, Cleary identifies that all too often the effort to change behaviors is focused on the goals and outcomes that accrue from the change. That seems perfectly logical, but it can undermine the efforts over time in three ways.

  • The "Valley of Desperation"
    In most cases, a change in habits does not lead to immediate results. The results take time to see. When losing weight, the diet and exercise can take 3-4 weeks for most people to see any of the visible manifestations they envisioned when starting. In adopting new habits around financial planning, the effort to develop the knowledge of the planning software, the effort to reframe the way an advisor approaches a client, and the change in perfecting the conversation and use with clients takes time and effort. If someone expects results to accrue early, they get trapped in the Valley of Desperation, which is the time when the efforts and new habits don't produce the imagined results. The key, according to Cleary, is to maintain the habits until the incremental compounding takes hold.
  • DON’T Focus on Outcomes and Goals
    While it seems like you should focus on the goals and outcomes being sought, Cleary explains how this can lead to Cognitive Dissonance – the confusion between effort and outcome. (Read the book for more detail.) He identifies that it is better to focus on what he calls "identity" rather than the actual goals and outcomes being sought. "Identity" is the vision of oneself. In the construct of getting in shape, the focus should be on developing an identity of being a healthy person that stays in shape, as opposed to simply thinking, "I am going to get healthy". As it relates to something more significant like the adoption and integration of planning in an advisor's practice, or in the overall organization, there needs to be a focus on the identity that establishes WHO you and the firm are going to be. More on this below.
  • Develop a New "System" to Drive Habits
    First, this is NOT a reference to developing a new system for your firm. "Systems" in this context are the way humans follow a natural sequence of events used and proven to be effective. Systems are the habits we follow and use that decrease our cognitive effort. To drive change, you need to redefine your "Systems" and build new habits. But habits, good or bad, are hard to break. Cleary identifies that habits are built upon the following four elements:

    • Cues: These are triggers that initiate reactions and behaviors. They are often so ingrained that they are hard to recognize but nonetheless powerful.
    • Cravings: Cues lead to "cravings", or the desire to act in a certain manner. For example, some people habitually have a snack at 9:30 PM. The cue in this case is time. The craving is the snack.
    • Responses: This is where behavior begins. The behavior is the action that is taken from the craving.
    • Rewards: The reward is the feeling that accrues from the behavior. Whether it is eating or using social media, or any other consistent habit, the reward is usually the release of dopamine from the brain that makes us feel good and further reinforces the habit, whether it is good or bad.

In seeking to drive change, the key is to develop a new "system" to follow, inclusive of specific cues, that lead to desired cravings that, in turn, identify the desired response and ultimately the reward that reinforces the positive aspects of the habit, making it stick over time.

The Application

The scientific and psychological ideas above are all interesting, but how can a firm or leader apply this in the context of seeking to drive the adoption of planning within their organization? Here are our thoughts:

The Identity: First, it is vital to establish WHO you are as an organization and the role your advisors have in the lives of your clients. In doing so, think about what clients are seeking rather than what you want to deliver. You might THINK you deliver "wealth management" or something like that, but that is an industry term. Clients aren't seeking "wealth management". Rather, they are seeking advisors who have a genuine interest in them, are patient and capable enough to understand them personally as well as financially, and from that understanding, are expert enough to provide the guidance and insights that deliver the focus and clarity required to achieve what is most important to them in their life. An example of claiming an identity for the organization can be as simple as this: "We understand our clients intimately and ensure they have the direction and clarity needed to achieve their goals." This is, as we at Greene Consulting refer to it, the "Client Promise"; or in other terms, the commitment your advisors make to each and every client you work with. It's the DNA of your firm. How you do that is the next part - the "system" that drives the behavior and habits of your advisors, which is where adoption comes in to play.

With the Identity in place, which can take time to engrain, the focus is increasingly on the "System" – i.e., how to drive new habits to achieve the identity. Here is a simple example we developed using Cleary's structure for forming new habits:

  • Cue – In every client situation, ask the advisor (or advisors should ask themselves), "Are we addressing the likelihood of the client achieving financial success as they determine/describe it for ALL of their goals?" "Does the client have complete Financial Confidence?" This is the internal and external "cue" to initiate the new habit, which needs to lead to the "craving".
  • Craving – The key to defining the "craving" is to swap the words "I have to…" with "I get to…". The craving needs to be positive. Most, if not all, advisors want to have a significant impact on the lives of their clients. But too often the old habits and other pressures can overwhelm day-to-day behavior. Seek to make the planning engagement pleasurable for the advisor. I "get" to engage clients in a more meaningful, non-product-oriented way that addresses what is most important to them. An example is as simple as making planning a way for them to say, "I GET to have a true, meaningful impact in the lives of my clients when I deliver on our Identity."
  • Response – Here is where the planning "experience" needs to be clearly defined for the advisor. The traditional approach firms typically use is where their efforts fail. All too often, we see firms trying to drive a traditional definition of financial planning that entails a significant commitment of time by the advisor and client, 3-4 meetings, and the delivery of a voluminous notebook with recommendations. This must change in our industry. The traditional definition of planning for most clients and advisors is dead. The new paradigm has to be built on the delivery of what we refer to as the "Digital Experience". For more information on this element of our approach, give us a call as it is beyond the scope of this article.
  • Reward – There are two simple, but key rewards:
    1. The feeling of having a more significant impact on a client's life.
    2. Increased engagement and associated production that comes from a more holistic approach.

While rewards need to be personal in the case of developing new habits for advisors, organizations must have a way to measure results overall as well. From an organizational standpoint, we at Greene Consulting have identified a series of key metrics that help organizations positively support and proactively manage advisor engagement and adoption of financial planning that is more reflective of the habits they are following rather than just the outcomes they are producing.

While there is so much more to the book itself, and certainly more to the complexities of generating organizational and advisor adoption of financial planning, I hope this article offers some unique and interesting perspectives to lead this kind of change. At Greene Consulting, we have partnered with over 20 different major financial services organizations as they have launched or re-launched financial planning initiatives and have extensive experience in driving advisor adoption, integrating the planning experience into the overall client experience, and reinforcing how to leverage the specific planning software various firms use to deliver planning. For more information on our services and programs supporting the adoption of financial planning and integrating it into the client experience your firm delivers to each and every client, contact David Greene at 404-324-4600 or at .

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