The Practice Doctor is IN

Al Depman, CLU, ChFC, CMFC, BH

Breaking Patterns

The Practice Doctor is IN

By Al Depman, CLU ChFC CMFC BH

The events of the past few months have been unsettling, to say the least. The credit crisis, portfolio declines across the board, job losses, election of President Obama, high profile Ponzi schemes, and big government mixing it up with ostensibly free enterprise have me believing that America is on the cusp of a transition. The transition may be to a second-rate world power or to the dawning of a new age of greatness. It’s our choice. I’m reminded of a quote from C. P. Snow’s The Two Cultures and the Scientific Revolution (1959):

“More often than I like, I am saddened by a historical myth…I can’t help thinking of the Venetian Republic in their last half-century. Like us, they had become fabulously rich as we did...They knew, just as clearly as we know, that the current of history had begun to flow against them. Many of them gave their minds to working out ways to keep going. It would have meant breaking the pattern into which they had crystallized. They were fond of the pattern, just as we are fond of ours. They never found the will to break it.” 

The Venetian Republic was established in about 800 AD and reached its primacy from 1100-1650. Once the major trade routes began to flow away from the Mediterranean and into the Atlantic to the new world, Venice had the choice to adapt to this global reality or stick with what they did best: feud with the Ottoman Empire and the Turks in local territorial battles. By the 1700’s, the period referred to by Snow in the quote, their influence and power had essentially evaporated in the wake of this early “globalization.”

Snow’s piece refers to the two cultures of science and the humanities and, allegorically, a warning to Britain. At the time, their post-WWII international significance had been diminishing as the United States’ was rising. The British inability to recapture their greatness is summed up in the last two sentences. Snow writes: “They were fond of the pattern, just as we are fond of ours. They never found the will to break it.”

So we’re facing the latest “current of history”––arguably as significant as the Great Depression. Let’s hope we can escape this one without a World War of either the weapons-of-mass-destruction or economic kind. Will our leadership rise to the occasion or sink into partisan bickering? Are we Americans too “fond of our pattern” to care? If so, then we’ve already become a fat, dumb, and happy constituency.

What does this have to do with practice management? 

These are the larger issues in which your day-to-day business operates. How would you answer Snow’s challenge?

• Are you so “fond of your pattern” that your ability to change would be so uncomfortable as to render it impossible?
• Would you be willing to make sacrifices to retain your leading edge?
• Can your voice be heard?

 Answering these questions gets at the heart of transitioning your practice in the face of today’s challenges.

What are the patterns of your practice? Are you willing to change them? A prime example of changing patterns is in how you are responding to the economic uncertainly you and your clients are facing. I recently attended a lecture from a noted economist, Dr. Robert Genetski, who told us:

“Over two centuries ago, classical economists discovered that the key to economic prosperity consists of providing individuals with the right environment for creating wealth. That environment includes only four things—low tax rates, free markets, protection of individual property rights and a stable currency for transacting business. These are the four key classical principles for achieving economic success.”

He made a compelling case for those four classical principles and bases his forecasts on how well those four are being sustained––or not.

Up until then, I was paralyzed into inaction, leaving my own diminished portfolio where it was in hopes of an “eventual” recovery. Being a Liberal Arts major, the idea of economic classical principles is one that appeals to me. With those principles in mind, I can study the components of the stimulus package and the daily Wall Street Journal and make some educated strategic decisions. In doing so, I have broken my pattern of faith in the long-term recovery power of the market as it exists today. As this point of view develops, I will reach out to clients and new prospects alike to communicate it. 

There’s always the real danger of the classic principles being overturned for the first time in two centuries. In this case, over time, it’s my reputation that’s in jeopardy. It’s a sacrifice I’m willing to make.

That’s me. How about you? How have you adapted your philosophy over the past four months? Have you effectively communicated it to your top tier clients? Here’s the practical practice management component: is your message clear and powerfully delivered in order to cut through the information overload?

In his book “Why Bad Things Happen to Good People,” Rabbi Harold Kushner suggests that God’s voice can be heard in the conversations with people around you, especially during tough times. In other words, the more we talk through an issue with an aim for finding a solution, the more divinely inspired the result will be.

This is true with client interaction as well. As you transition from established, fond patterns of giving financial advice, the conversations with those around you are imperative. In my best practices research, one link that is often missing in an advisor’s practice is the study group. If there was ever a time for a peer-to-peer study group, it’s in this economy.

My exposure to Dr. Genetski’s ideas came as a result of a study group environment. We made plenty of time after his presentation to wade through his points, challenge them, and emerge with some practical points of view. With these POVs, the advisors then agreed to discuss them with top clients and when we get back together for our next study-group teleconference, share the reactions of those clients.

These actions reflect 2 of the 8 practice management systems: Communication and Education. Examining and breaking long-held patterns of thought might be what’s necessary to put you and your practice ahead of the game. If you haven’t already, reach out to your own trusted advisors, clients, and teachers to establish that dialogue. It may be the bit of inspiration that leads to a flash of genius and a breakthrough we will all eventually benefit from.

The Doctor is OUT.

Al Depman, CLU, ChFC, CMFC, BH, a.k.a. “The Practice Doctor”, is MitchAnthony.com’s Business Practice Consultant. He is the creator of “The Practice Management Assessment” tool and materials and has authored numerous articles in professional publications on practice management, and author of the forthcoming book, How to Build Your Financial Advisory Business, to be published by McGraw Hill in 2009. Al combined his Liberal Arts studies with 10 years of management experience with McDonald’s Corporation to enter the financial services world 25 years ago. Since then, Al has evolved from an MDRT-level sales rep into a full-time consultant specializing in helping others engineer their business practices to the next level. Contact him at al@mitchanthony.com.

© 2008 Al Depman