Are you spending 4 hours on Sharpening your Axe?
I know that your work is not easy. According to a senior industry executive “An IFA’s stress is at the highest level today while confidence is at the lowest level”.
This is because of several reasons:
- You have to justify events that are beyond your control. In fact, you are blamed for these events.
- You are compared to irrelevant benchmarks and competitors. Every competitor with a product and performance proposition wants to show how superior his performance is.
- The financial pornography network is constantly confusing the hell out of people with 24 *7 news of gloom and doom.
- Your revenue is going down, but costs are going up. Many have lost clients beyond the market decline in AUM. An IFA in Mumbai with Rs. 300 Crore AUM lost a Rs. 40 Crore client. One in Bengaluru lost clients with Rs. 30-40 Crore of AUM out of their Rs. 130 Crore AUM. There are many such examples.
- Beyond the stock market recovery, there is no economic recovery in sight and many of your investors are still waiting.
There are many other reasons, but I am sure you get the drift.
In Weekend Reading – 7, I had written the following – “I see people wearing masks in a far disciplined way on a daily basis and it is nice to see that most people do care for their lives and that of others.”
Extend the same concept to your business and the key question to ask yourself is:
“Does your Business have a Mask?”
On the personal front, it is very clear that the reason for wearing a mask is to protect you from COVID-19. However, on the business front, many are confused about what to build a mask for.
In the current scenario, I see 2 camps of people – One set of people who are extremely busy and think that busyness and activities are the Masks they require. On the other hand, there are some who are just waiting for the lockdown to be lifted and think that they will not require a mask (and it’s best to hide now).
I was speaking with Rajesh Gandhi, an IFA from Mumbai with an Rs. 150 Crore AUM. He was busy attending fund manager calls, and webinars. He had around 1000 clients with an average of Rs. 15 Lakh AUM. Additionally, he was busy with client calls and overall things seemed to be fine. However, like termite, his business was becoming weaker and weaker from the core. Despite remaining so busy, he had not added a single client, lost many key clients (including significant AUM), and felt stressed dealing with hundreds of non-ideal clients (not to mention uncertain about the future).
I told Rajesh that he was not building a Mask for his real virus. His Virus was NICLICOVPMLB. I am not adding 19 or 20 here as this has been in the making for 15+ years.
Too many Non-Ideal Clients (NIC) wasting his time, Lack of Ideal Clients (LIC), An outdated Value Proposition (OVP) that provided him with no competitive advantage, and Many Limiting Beliefs (MLB) about himself and his business.
Another example is that of Hardeep Kohli, an IFA from Delhi with around Rs. 140 Crore of AUM. He said “I have 100% of my client assets and have built a firm that my clients love. I do not know why we are losing Rs. 25 Crore of Assets every year and I need to do something about it”. It has been a year and I see this gentleman having done nothing except lose another Rs. 25 Crore.
I had a call with him last week and he said “I have this goal to take my firm to Rs. 500 Crore in the next 3 years but my partner is not that driven to do this. I had taken a consultant on board, but it did not help as my partner thought we knew everything.” I told him “Your real virus is something else. You and your partner both need to be on the same page as far as your joint business goals are concerned. Either you convince him about your goals or be convinced that you will continue to operate like this and keep losing clients & assets to competition”.
What do you think Hardeep’s mask is?
Finally, you might be wondering what has the title of the column got to do with this post.
One of Abraham Lincoln’s quote could shed some light. Lincoln had said “If I had 6 hours to cut a tree, I would spend 4 hours on sharpening the Axe”.
That is the need of the hour for most IFA’s today. They need to sharpen their Axe first and this means focusing on things that will make their business not only Coronavirus-Proof but the firm of the future.
Sharpening your Axe consists of the following (and doing this will build a solid protective mask for your business):
a. Making a Happy Difference in the Lives of People Mindset
b. Real Skills (Conversational Skills, Listening, Asking Questions to name a few)
c. Ideal Clients that you would enjoy working with
d. Futuristic Value Proposition that provides you with a solid Competitive Advantage
e. Fast Decision-Making Ability
f. Valuing Time more than Money
g. Willingness to invest in the business
h. Ability to spot real people who can help you
i. Finally, once all the above has been figured out – A Bias towards Action and Experimentation.
Remember, Your Business Mask and Axe are BOTH YOU.
You and Only You have the Power to Truly Future Proof your Business but the Future Proofing (rather Transformation) starts with YOU.