Communication

Playing it Safe (#96)

Last week, I wrote about how having the freedom to fail is an integral part of growth and how many parents are failing this test. In response to last week’s post, a friend sent me an article titled, “The Fragile Generation.” The author opens with an anecdote of a teen boy who was chopping some wood to make a fort with his friends. An onlooker notified the police who arrived at the scene and “took the tools for safekeeping to be returned to the boy’s parents.”

The author writes, “We told a generation of kids that they can never be too safe—and they believed us.”

This need to be “safe” has evolved part and parcel with the explosion of the internet and social media.  Many of the things that have a very low probability of bringing us harm are sensationalized online and in the news; because we see it happening on the internet and how horrible it is, we start to question our safety. For example, the leading cause of death in the US is an unhealthy diet, not any of the things we read about in the news. Yet … we aren’t blocking the doors to McDonalds.

Our inclination to seek “safety” removes a degree of risk-taking in our lives that is necessary for getting us out of our comfort zone, such as travelling to new places, trying new foods and interacting with people of different background and beliefs.

Our physical need for safety has also evolved into an emotional need. This comes at a very high price.

One emotional cost is that more and more people today are delaying – or altogether missing – adult milestones; landmarks that come with a certain degree of risk, such as buying a home/living on their own, getting married or having kids.

If we try to ensure that we, or those we love, will never get physically or emotionally hurt, it’s unlikely that we’ll lead fulfilling, prosperous lives.

This is a big problem; one that is not easily solved. That being said, I believe one area where we can all start to be more growth-minded and a little less safe is in our communication and feedback. Often, we don’t say what we really mean. It’s either safer not to or it helps us (or the recipient) maintain the status quo.

One of the best frameworks I’ve come across around feedback is from Kim Scott’s new book, Radical CandorBe a Kickass Boss Without Losing Your Humanity. Radical Candor, she argues, should be the default form of both personal and professional feedback.

One of the quadrants in the Radical Candor graph that gets less attention, but is often our automatic form of commutation, is “Ruinous Empathy.” This is when you care about the other person and their perspective, but you don’t tell them what they really need to hear, which is likely to be a tough message and/or the truth as you will see in this sample video.

According to Scott, Ruinous Empathy comes from our desire to try and control other people’s feelings, something we should not and cannot do. While it may come from a good place, it is also a misplaced, misguided effort. It’s about being safe.

This week, let’s encourage open and vulnerable communication. We may get our knees skinned – we maybe even get rejected outright — but at least we’re living authentically, growing and working toward empowering ourselves and others.

Quote of the Week

“A ship is safe in harbor, but that’s not what ships are for.”

John A. Shedd

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We Cant Agree on Anything.

We Can’t Agree On Anything

Nothing is more exasperating than watching a group of smart, qualified, intelligent executives deliberate about a key strategy, and fail to reach an agreement. In frustration, the team turns to the CEO to make the decision. Yet this is counterproductive, as whatever the CEO decides, some of the team will resent – and that resentment leads to a lack of a commitment to delivering an outcome.

It’s even more frustrating when attempting to reach a forward-thinking strategic plan for the business.

How you might ask, can this be so? These people are our leaders. They set the direction of the organization. We rely on them to make sensible decisions that can impact our careers. So, how come they are in disarray?

The CEO, after a few attempts to reach an agreement, called in a DNA Behavior facilitator to oversee the discussions.

These are just a few questions that went through my head as I watched, incredulous, as a significant group of executives began the process of planning for the next stage of the company’s direction.

As I sat to one side and observed their interaction, it was clear the room was heavy with bias, one-upmanship, egotism, and overconfidence pitched against compliance, indifference, and timidity. The assertive ones held their ground. The more vocal got louder. And the reflective and thoughtful seemed to be brooding.

Nothing was being resolved. Every stake put in the ground took the team further away from making decisions.

The DNA Behavior Solution

Each member of the team completed the Communication DNA Discovery Process, an assessment predominantly focused on revealing individual communication styles. Patterns quickly emerged showing the relationship gaps and areas where communication was breaking down, and why.

Independent research shows that Communication DNA leads to solving 87% of business issues, which are hidden as they are communication-related.

Once the team understood how their communication style was getting in the way of bringing their talent and behavioral smarts to the table, outcomes began to change.

As the Goal Setting individuals encouraged input from the Information and Stability individuals and the Lifestyle individuals used their approach to encourage everyone of the importance to reach a solution – suddenly everyone felt they had a voice. And rather than chaos, a solid structure began to take shape.

The team was then able to focus on their task. Egos, bias, and intolerance were replaced with listening, acknowledging input, and intelligent suggestions – a lively, but meaningful debate.

CDNA

As the task proceeded, the Lifestyle individuals suggested a flow chart to capture ideas. The Information individuals populated the flow chart, carefully catching ideas and suggestions. And the Goal Setters captured the key milestones for taking the organization into the next season and all agreed that it was a job well done.

From my perspective, the lesson learned for them as a strategic planning team of executives was the importance of understanding how to communicate with each other. Without the Communication DNA Discovery Process, this team would have failed to meet its obligations to set out the strategic plan for the next season. Important skills and talents would not have been brought to the table. Individuals would have left frustrated, and the business would have suffered without a cohesive sense of direction.

CDNA 3

To learn more, please speak with one of our DNA Behavior Specialists (LiveChat), email inquiries@dnabehavior.com, or visit DNA Behavior.

Organizational Culture 2

10 Ways To Cultural Change

Every organization has a culture – as a leader you need to know whether the culture is healthy or not. Toxic culture must be addressed but so should healthy culture to see if it needs tweaking.

Changing the culture in an organization can be a nightmare for a leader. If a change in leadership is because of a poor performing business, it can become incredibly frustrating for a new CEO to have to sideline results to focus on changing the culture.

change

But here’s a thought; what is your culture? Would it stand up to scrutiny? Are your values open to scrutiny both in your personal and business life?

Investopedia defines Corporate Culture as “the beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires.”

Success comes from understanding the behaviors and motivations of the people. Only then can cultural change have a hope of succeeding. Using a highly-validated discovery such as DNA Behavior Natural Discovery process, leaders can identify, in advance, the people’s ability to cope with cultural change and how it should be introduced and communicated. Only then can CEOs know that whatever they introduce will work.

Culture change requires strong, focused, versatile and decisive leadership. A person’s performance needs to be addressed in relation to their behaviors and personality, not necessarily to their ability. Knowing an individual’s personality traits in advance, and how, or if, they fit the proposed organizational culture and values, can make all the difference in terms of the success or failure of the proposed changes.

There are several keys for CEOs that will support their cultural change efforts.

  1. If no one is talking and boasting about the culture of the organization, it’s a sure sign there isn’t one, or if there is, it’s toxic.
  2. It starts at the top – often said, but rarely practiced. A leader who knows their own personality, their EQ, their communication style, their bias (yes, we all have them) and their own personal values, are more likely to be able to introduce cultural change than a leader who does not have this insight.
  3. Measure the current culture – maybe not everything needs to change.
  4. The use of a validated personality discovery process can quickly identify those able to manage cultural change and who are behaviorally smart enough to capture culture and vision quickly and run with it.
  5. Data that delivers accurate information about people can identify quickly those who can be used as ambassadors to manage the introduction of cultural change. (And it won’t always be the obvious employees)
  6. Hiring – audit your hiring processes – introduce a validated personality profiling system. Set a hiring benchmark. Don’t settle for second best. Re-training existing employees could be a more effective option.
  7. When introducing a cultural change training program, keep auditing it to ensure it’s relevant and working.
  8. CEOs – it’s important not underestimate the power of your regular communication with the business. Use your communication to acknowledge the people who have disproportionate influence in the organization and are working with you to introduce the cultural change.
  9. If there are hot spots and resistance to the cultural change, name and shame them.
  10. CEOs – remember to create a vision of what the future for the organization looks like after the cultural change.

In conclusion – here’s the prize: as the culture develops and individuals take responsibility for what happens in their work areas, problems are solved where they happen and by those affected. This frees up leadership to focus on the business and its opportunities.

To learn more, please speak with one of our DNA Behavior Specialists (LiveChat), email inquiries@dnabehavior.com, or visit DNA Behavior.

 

Acting on Feedback (#70)

Giving and taking feedback is a popular topic these days. Companies are going to great lengths to solicit more feedback from employees and customers – especially those regularly turning to social media.

In my many discussions with high-achieving individuals and companies, one thing that consistently sets them apart is their willingness to not only receive candid feedback, but to then act on it.

Acting on feedback is harder than it seems. It means that we need to first accept what people are telling us about how we can improve and overcome our inherent cognitive dissonance. It also means admitting that we don’t always have the best ideas and be comfortable giving credit to others. These are hallmark signs of a great leader. Individuals who want to do and be better don’t care where the best ideas or suggestions come from.

Here are two examples of CEO’s who have recently accepted and acted upon customer feedback:

If you want to be an effective leader, it’s vital that you demonstrate a willingness to act on feedback. Doing so conveys that you are approachable, solution-oriented, and are looking for the best ideas—regardless of where they came from and irrespective of credit.

When people see and experience this positive feedback loop, they will be even more open and honest with you or your company; it’s that open, honest communication that leads to major breakthroughs within an organization, and it costs you nothing.

To do for next week: Act on someone else’s suggestion, let them know, and see what happens.

Quote of The Week

“I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice: constantly think about how you could be doing things better and questioning yourself.”

Elon Musk

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Know Your Client and let them share in the experience

You Don’t Know Me – I Don’t Know You But We Can Discover Insights to Predict Business Risks

Picture this – you’re heading to a potentially great business opportunity, one that could significantly shift your organization to the next level.

You are well prepared, have all your ducks in a row and as you arrive at the meeting place, realize, you have no idea how best to communicate with the CEO you are about to meet.

You see – so far the pitch has been via emails, attached marketing material, answered questions back and forth all leading to today. BUT no thought of how to communicate in a Behaviorally Smart way.

All the preparation in the world won’t get the deal if you have no idea how best to communicate when you are in the room.

We’ve all been there, we’ve all done it. Made assumptions based on LinkedIn profiles; about me sections of websites; or Googled to find pen pictures, but the reality is – you don’t know me, and I don’t know you.

In her article The 5 Personality Traits That Make for a Better Life Science of Us Melissa Dahl makes this observation: people are complicated, perhaps more complicated than these (Big Five) five aspects of personality can adequately represent..

Yes, people are indeed complicated, but why couldn’t part of preparation for an event such as this include knowing in advance how individuals communicate; what their business approach style is, all of which would create a starting point to inform the meeting and with such powerful information build greater connection and trust.

The answer is simple DNA Natural Behavior Discovery puts you in the driving seat of your relationships, whether business or personal. It takes just 10 minutes to complete and can form the basis of every, and any connection. All it takes is emailing a link and asking the prospect, client, staff member to complete it. They complete a questionnaire, and a report is produced. But it doesn’t stop there – you can then compare your personality profile with the person you are about to engage with and produce a meeting report that will not only provide insight into how to communicate, but how best to present your offering.

This Behaviorally Smart approach is used in endless numbers of scenarios – to name just a few:

  • Financial advisor and client
  • Making a pitch to a VC
  • Hiring
  • Performance review
  • Building teams
  • Managing boardroom challenges
  • Selecting a mentor
  • Family succession planning and so much more.

With reliability factor of 91% and having been completed by millions of people – taking the DNA Behavior journey will not only set you up for success but set you apart from others regarding the professional way in which you approach business meetings.

To learn more, please speak with one of our DNA Behavior Specialists (LiveChat), email inquiries@dnabehavior.com, or visit DNA Behavior.

De-Mystifying The Multi-Dimensional Nature of An Investor's Risk Profile

What Is The Misunderstanding Of An Investor’s Risk Profile?

In my journey as a wealth mentor over the last 20 years, and developing a rigorous scientifically based behavioral finance approach for the last 15, I have watched the risk profiling discussion seriously evolve from denigration to one that is being more intelligently embraced and applied. From advisors, clients, compliance departments, and regulators: what is the misunderstanding of an investor’s risk profile?

The problem is a combination of factors:

  1. Lack of clarity in the terminology as to what defines risk profile. For instance, interchanging risk tolerance, risk perception, and risk capacity although all have different meanings.
  2. Regulators worldwide have created principles based laws around risk profiling. But the legislative vagueness leaves too much open for interpretation leaving many firms doing virtually nothing.
  3. Compliance departments allowing “tick-the-box” methods of risk profiling along a broad array of approaches from doing nothing, to guessing, observing, or 3-to-5 hacked together questions.
  4. Applying the risk profile in a linear way based on a single measurement.
  5. Lack of understanding risk profiling at a deeper level because many of the instruments and processes are slapdash and poorly constructed. Even the better tools are one dimensional but are used to measure all aspects of risk, which is wrong and misleading.
  6. The Inability of advisors/consultants to integrate risk profiling and behavioral discovery into the client onboarding process.
  7. An unwillingness to have the client invest time in additional questionnaires viewed as distracting from getting on-boarded.
  8. The plethora of online investing platforms leveraging a quick & dirty approach to “knowing the investor” without any real insights.

The positive development now is that there is a heightened awareness of the need to adopt a more formalized behavioral discovery process, recognizing that risk taking, tolerance, and loss aversion are separate and measurable personality traits. And it’s a combination of all the risk factors, along with many cognitive biases, that interplay in how decisions are made.

Further, the compliance environment is requiring a strengthening in processes because the #1 issue on the agenda of regulators is dealing with the increase in investor complaints from a lack of suitability. Suitable solutions will never be able to be satisfactorily offered with demonstrated client buy-in unless EACH of the multi-dimensional elements that make up the risk profile is understood by both the advisor and the client.

For the last 15 years in my role as a wealth mentor, I have been guiding advisors and clients to understand the multi-dimensional nature of their risk profile as highlighted in the table below.

Risk elementsA risk profile is not a single number determined in a vacuum. In fact, it is a quantifiable number made up of many measurable financial and personality based elements. Whether you use the Financial DNA Discovery Process or other platform, I suggest you follow these key steps to identify and apply risk profiling:

  1. Use the client’s long-term risk profile for building a long-term portfolio and predicting how they will intrinsically make decisions over the long term (this is what Daniel Kahneman refers to as the Level 1 behavior). The correct questionnaire structure is absolutely critical to getting this result. In my terms, this is the hard-wired natural DNA Behavior. The questionnaire should be designed and independently validated based on sound psychometric principles.
  2. Understand the short-term risk profile based on current situational attitudes and how the client manages themselves (Kahneman’s Level 2 behavior). This is what many risk tolerance questionnaires seek to measure with varying degrees of quality and accuracy.
  3. Separate the various calculations of the Risk Need to achieve the client’s goals and Risk Capacity being their financial ability to sustain losses from the various personality traits associated with risk, risk propensity (desire to take risks), risk tolerance (emotional ability to live with losses), loss aversion (emotional reaction to markets), risk and product perception (reaction to situations and products ), and risk preferences (personal evaluation of preparedness to take risk in a given situation or with a product).
  4. Know each client’s Risk Composure – how they are feeling during up and down market movements. Some will embrace down markets and others will fear them. Of course, added to this is knowing how to communicate with clients during these different times.
  5. When wealth mentoring the client, help them set purpose based goals that are clearly defined for keeping them focused on what’s important. An IPS can be used as the guide-stick and for getting the client’s emotional buy-in.
  6. Finally, as an advisor, know the influence of your own risk profile and behavioral biases. Your mindset can inadvertently play out with the client whereby over time they eat your risk profile.

Here are other good resources that support the steps highlighted above:

1. OSC Study on Risk Profiling
2. Adopting a 2-dimensional risk tolerance assessment process
3. The sorry state of risk tolerance
4. How to measure risk tolerance