I’ve received more than a few calls on dealing with the disruption from the COVID pandemic. Facing a wildly uncertain future, solo advisors, national RIAs, fintech firms and the CEOs of familiar names are all working to navigate this uncertainty and capitalize on its opportunity.
These callers are likely to succeed, not as a result of my coaching, but rather because of what led them to call in the first place: their refusal to take the situation sitting down.
We’ve been here before. Whether you point to the Tulip Mania in 1637 or the Spanish Flu of 1918, it is clear that, while timing and conditions may vary, disruptions and downturns are predictable events.
In 2000, at 27, with clients in Silicon Valley, I learned the hard way what Israelmore Ayivor meant when he said: “Your downfall is in your lack of preparation for your up-rise. If you don’t know this secret, you will remain on the floor, blaming your legs instead of your head!”
If you want to out-think, out-strategize, and out-execute your competition, mindset is a great place to start. Threatening situations tend to throw us into survival mode, flooding our bodies with stress hormones and redirecting blood flow from the pre-frontal cortex (responsible for cognitive thought) to our heart and muscles. This helps us fight harder or flee faster, depending on what the situation calls for. Your brain processes 10+ million bits of information per second, sorting through the full historical archive of your life for context, and then in a mere 1/5th of a second, it subconsciously processes the threat and dictates your response.
Anyone who has ever discounted a fee or kicked themselves for a business decision that surely should have been made differently knows all too well the side effects of stress. Simply put, stress makes you stupid.
We are no longer living in caveman times. It is highly unlikely that any of us will be eaten by a hungry saber-tooth tiger. But some of us WILL struggle to stay afloat in these markets, while others will step into new levels of success. Just ask Peter Foulk of Creative Capital. 2008 put the wind at his back, but it was his mental state that led Peter to put his sails in front of the wind and decide what direction to steer his strategy toward.
In stark contrast, many advisors are taking on any and all clients, discounting fees, over servicing, under-marketing and resisting the forces of change.
Neuroscience research by Cambridge Institute of Technology tells us that success is primarily driven by three factors: environment, skills and psychology (or mindset). Get ready to have your mind blown. Of the three, they determined that success is 80% mindset. When you get paid to think, the quality of your thoughts matters. In times like these, immensely.
The next thinning of the herd in our profession is underway. Your job is not to resist the situation, but rather to master your mindset to get clear, get focused and get to work.
Be prepared to manage a sustained 30% downturn and have the margins to operate on a skinny 50% if demanded. Have a crisis communication plan that spells out the who, what, when and how of communicating with clients for as long as the downturn lasts. Shift your digital marketing to align with the pain points and preferences of the times. Engage with COIs and influencer groups as the voice of advice. Identify strategic investments that support your goals and can slingshot you forward. Get really comfortable being uncomfortable.
This is the third major crises I and my clients have weathered in almost as many decades. I’ve never pretended to know what comes next, but I have learned how to be prepared for it. It isn’t the conditions, but rather your mindset, that will determine whether you struggle to stay open for business or set a strategy that leaves you open for opportunity.
Get clear, get focused, and get to work.