Why advisers need to become innovators
Why advisers need to become innovators
There is little doubt that technology is causing a rapid evolution of most processes in our lives.
This is known as 'digital disruption' and it has been happening for many years in a number of industries.
Digital (or technology) disruption occurs in every industry from transport to medicine, to communications and everything in between.
Just think of how commercial airlines disrupted the train industry.
Or how Kodak's reign over the photography and film world was disrupted by the invention of digital cameras - which were then eclipsed by the evolution of smartphones like the iPhone with built-in cameras.
So, although digital disruption is not new, the pace at which technological evolution occurs has rapidly increased to the point that it seems as though new inventions and ideas are developed all the time.
Product competitors, new market entrants and small start-ups are springing up across the globe.
The big players in each market don't want to be left behind in the activity of development which seems to be moving at a break-neck pace, so they're joining in on the innovation movement by establishing in-house consumer labs, investing in VCs and setting up tech incubators.
Though investing in new tech and start-up businesses isn't the development strategy for everyone.
For advisers and small business owners more broadly, the only way to keep up with the rapid rate of digital disruption is to find ways to innovate within our workplaces. Innovation is critical if we want to keep up with the changes that will continue to keep happening around us.
The rate of disruption is increasing so quickly due to a number of factors.
These are largely made up of low cost computing power, anywhere/anytime internet connectivity, supply chains built on people rather than large scale capital investments, and what I believe is a greater willingness of business owners to take risks - some may refer to this as entrepreneurship, while others label it as 'innovation'.
The result of digital disruption is not only the formation of a number of billion dollar businesses. It has also spawned a new breed of consumer - one that has access to the internet at all times.
This highly connected consumer is deeply engaged with their brands and their social networks, and they demand constant access to relevant and timely information, and tools to make their lives easier - and more fun.
But what does it mean for people in the financial advice profession, and how can advisers and practice managers use these developments to the best of their advantage?
If you read the examples above about airlines and Kodak, and thought 'those are multinational companies - what happened to them will never happen to me?' perhaps consider some of the new technology-driven services that have recently sprouted in the wealth management industry.
Your clients now have the option to log on to a free website and compare all of their life and health insurance options without even speaking to you.
Signing up for insurance products via these websites such as iSelect and Compare The Market can even provide your clients with discounts or other incentivised reasons to become a member directly via the web rather than via your service offering.
Your strategies are no longer the only option your client has for choosing where to invest their money - dozens of new websites and apps are being launched to let direct investors create their own investment strategies using algorithmic investment formulas or 'robo-advice'.
Plus, investors can log on to any online sharetrading site to place their own trades.
But your services will not be made redundant by digital disruption - so long as you are prepared to innovate.
How do we ensure that we are not the next disrupted company or industry?
Disruption is happening in countless digital environments, from cybercrime to cloud computing; big data to the mobile revolution; online marketplaces to SAAS platforms; internet-connected wearable devices, to community created content; and the list goes on.
We know we need to be on board. The next generation of our customers are already prepared for us to disrupt and innovate the way we deliver our services.
How do we do it? We need to be the disruptors. We need to be the entrepreneurs. And we need to be the innovators.
We need to continually try new things and take calculated risks within our businesses.
So, what is innovation?
Is it an updated version of something that we're already familiar with, perhaps with a few newly added features? Or a new mobile phone app?
Although many people seem to think of innovation as bringing a new technology to market, innovation is not just about developing a shiny, new piece of technology.
Innovation as a concept spans much further. It is about catalysing a new method, product, process or idea. It is about finding new ways to connect with your clients, and re-imaged methods for managing your staff and your workflows.
It's also about creating ways to make sure you stand out from your competitors.
In fact there are many types of innovation - ranging from different business models, to customer service innovation, and even brand innovation.
For a business to evolve and keep up with all of the digital disruption that is occurring in the world around them, they'll need to focus just as much on how they interact with their customers and clients on a human level, as they do on what new technologies and tools they employ within their workplaces.
The point is that you don't have to create a new gadget or online service to be innovative. Technology alone is not innovation, but a driver or catalyst for innovative processes and new ways of doing things.
Think about what you could do this week within your business to improve a task that you work on every week.
Could you change something about that task that allows you to complete it in less time?
Could you spend an extra five minutes working on it to create an outcome that is more valuable than what you currently produce?
Ten minutes per week spent on innovating small processes and concepts within your business could future-proof your business in the face of digital disruption.
In the connected consumer world we live in, it is vital to embrace innovation and to identify the types of innovation that will add the most value to your service offering.
Your customers will demand it, and your competitors are already doing it. What are you waiting for?
Download netwealth's eBook on the 10 types of innovation .
Matt Heine is the joint managing director of netwealth.
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