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Meeting Before The Meeting

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.

Leadership

11 Leadership Styles That Shape A Winning Organization

Building and shaping the culture of an organization begins with the behavior of the leaders. When leaders are behaviorally smart, and understand their leadership and communication style, they are more likely to set the kind of example they want everyone to follow.

There is no one leadership style fits all. The key, through self-awareness, is to find the balance that works with the teams you lead.

The Fast-Paced Leader

A leader who is fast paced, logical, challenging and tends to be critical may well deliver results, but can damage the talent they are responsible for leading. This style of leadership births a culture of stress, staff turnover and unwillingness to want to work under their leadership.

The Analytical Leader

The analytical, systematic, rigid, work by the rules, style of leadership may be a gatekeeper in terms of the processes of the organization, but can shut down innovation, spontaneity and the kind of creative approach to decision making required when things go wrong. This inflexible and rigid style of leadership does not inspire a culture of shared goals, thoughts and ideas.

The Skeptical Leader

In today’s rapidly changing market, businesses need innovation to survive. A skeptical leader who is not open to ideas, continually questions, is guarded and fails to build trust with their teams, will not create the kind of innovative culture that breeds success. Finding a successful balance between trust and a healthy skepticism that protects the business is tough.

The Competitive Leader

Similarly, leaders whose focus is solely on results, who is very competitive and wants always to be the one who sets the agenda, can push teams too hard to achieve goals. If these leaders see targets slipping away they can become manipulative and assume a driven style of leading that causes teams to crash and burn. This approach leads to a toxic culture – very difficult to recover from.

The Peoples Leader

Leaders who are highly people focused and expressive, can inspire passion and purpose, but if this style of leadership is not based on a foundation of a clearly articulated vision and mission, the culture they create is one of chaos and confusion – but fun. Leaders such as this need strong boundaries and need to learn to focus on one goal at a time.

The Risk-Taking Leader

Some leaders are comfortable with taking risks. They know their limitations and are comfortable with managing failure. However, when risk taking leads to over confidence, leaders will cut corners placing the business in jeopardy. Further, team members assume the culture of risk extends to them. This can lead to outlier behavior as they take inappropriate risk that undermines the organization.

The Creative Leader

The highly creative leader embraces new ideas, can be quite abstract in their thinking and open to imaginative approaches to decision making. However, such creative ideas need to have value, they can’t be random as this leads to a culture of anything goes. Creativity in leadership works when it’s part of a culture that is sensitive to teams, colleagues and the overall needs of the business.

The Cooperative Leader

Not many organizations survive on a cooperative style of decision making. When a leader is seen to be compliant others very quickly take advantage of them. They may well be able to communicate the vision and encourage input from teams, but without their own understanding of how to be behaviourally smart, this style of leaderships leads to the loudest voice getting their way. Further, it can lead to a culture of frustration as the leader seeks everyone’s opinion before making a call.

The Reserved Leader

Generally, the reserved, reflective leader tends to be a loner. They do not have an open-door policy and can be withdrawn. This style of leadership breeds a culture of suspicion and can lead to more outgoing team members driving the culture and making decisions that are inappropriate. However, when the leader understands the importance of building relationships, this style of leader is likely to be much more accurate in their instructions. They prefer to get things right first time and will reflect and focus on this.

The Patient Leader

When a leader is overly understanding and tolerant there will always be others who will take advantage of this. A culture of leniency will prevail and mistakes will be repeated leading to frustration and discontent from team members. Generally, this leader tries to create a culture of stability, believing that everyone will function more effectively within the environment. This approach only works when everyone has knowledge of each other’s preferred environment for working, otherwise the culture will be too relaxed.

The Spontaneous Leader

Spontaneity challenges many people who prefer leadership to be structured and predictable. A spontaneous leader creates a culture of impulsiveness and lack of planning and forethought. Spontaneity panics some people and can lead to disruption and stress in the workplace.

A Leader who can create a successful organization culture will not only understand their own natural behavior and how to manage it, they will invest time gaining insight into the behaviors of their teams. When they achieve this balance, the culture they create looks like this:

  • There is a shared vision – communicated in a way that everyone feels valued in role for delivering it
  • There are high levels of personal confidence
  • Everyone has a can-do attitude
  • Teams collectively look for solutions
  • The leaders listen to other ideas and suggestions
  • The individuals feel motivated
  • Attrition is low
  • There are clear goals and everyone knows where they fit in delivering them
  • Success is shared
  • Trust goes both ways
  • There are quantifiable measurable outcomes that demonstrate the culture of the organization
Data Mining2

Behaviorally Smart Data Mining – for Financial Advisors

The explosion of available information from social media, together with significant techniques for capturing this data, now provides financial advisors with a gold mine of information to help them identify and connect with clients.

Big Data gathering is only a starting point in terms of capturing user behavior. It delivers a glimpse of the client but leaves a significant gap and won’t offer enough insight to be able to advise or offer solutions to clients based upon their life goals.

DNA Behavior International fills the gap. With the use of behavioral psychological insights, revealed through a validated questionnaire, their powerful DNA behavioral intelligence, partnered with their Big Data Optimization program enriches firms employee and client data.

IBM in their Big Data and Analytics Hub ask these questions: Are you (financial advisor) generating targeted personalized offers for your clients? Do you know your customers and provide them with timely, relevant and optimized offers based on data-driven insights? By leveraging information about your clients’ behaviors, needs, and preferences, you can encourage high response rates from clients and enhanced relationships with them.

Client Insight for Wealth Management

When financial advisors use Big Data to enhance their service offering – what are they extracting from the data? How are they interpreting it? What is it saying about potential clients? Will clients be concerned that they are being advised based on their social media accounts alone?

Financial advisors who mine social media to serve client’s life events should know this does not reveal personality or bias. It doesn’t uncover decision making styles. It won’t predict a reaction to market mood. It won’t reveal influencing life events.

Advisors who are behaviorally smart understand there is a gap in Big Data mining. They know the importance of guiding clients with wisdom to self-discover who they are and their priorities to achieve financial wholeness. Financial DNA discovery delivers this self-discovery process. This strong, validated, structured approach reveals all dimensions of a client’s financial personality.
A partnership between behavioral analytics that reveal personality and big data offers financial advisors a significant key to identifying clients and delivering accurate advice.

As quickly as Big Data mining was the key to understanding customers now the added requirement is for financial advisors to be able to use cognitive and analytics to understand their clients.

Gauthier Vincent head of Deloitte’s US Wealth management consulting business is quoted in the Financial Times: Tools that help manage interactions with clients will soon be able to analyze data such as a client’s social media activity to work out their investment goals and advisers are thinking. There’s a lot of info out there I would love to have to create rich profiles of prospects so I can increase the odds of success when I [contact] them.

Hugh Massie

Well said – but Big Data will only ever become a significant tool for financial advisors when it shares its platform with a financial personality discovery process such as Financial DNA.

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

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

Source: www.scienceofrelationships.com

Compliance Issues the DOJ Isn’t Telling You About

We make decisions in different ways – but most are driven by our natural biases. These biases can affect an Advisor’s ability to recommend the appropriate options for clients, setting them up for a potential compliance issue. Natural Behavioral Biases also can affect the client’s ability to understand and make rational decisions.

Psychologists Daniel Kahneman, Paul Slovic, and Amos Tversky introduced the concept of psychological bias in the early 70s and published their findings in the 1982 book, Judgement under Uncertainty.They explained that psychological bias is the tendency to make decisions or take action in an illogical way. For example, you might subconsciously make selective use of data and fail to apply common sense to a measured judgment. This is how people make mistakes or accidents happen, right?

Furthermore, Since its inception nearly three decades ago, behavioral economics has upset the pristine premise of classical economic theory – the view that individuals will always behave rationally to achieve the best possible outcome. Today it’s clear that the vagaries of individual and group psychology can cause irrational decision making by both individuals and organizations, resulting in less than ideal outcomes. Even the best-designed strategic-planning processes don’t always lead to optimal decisions.

If decisions on a certain course of action rests with individuals, and bias plays a significant role in human decision-making, then how can any investor (or their advisor) make rational investment decisions?

Improving financial decision-making requires limiting both investor’s and advisor’s own biases. In the advisor/investor relationship this is a difficult path to navigate because bias is hard-wired in our nature. It goes beyond simplistic Compliance rules & regulations, or a Risk Tolerance matrix. We’re talking about applying validated psychological assessment data to the landscape of financial decision-making. These are the same tools and insights that businesses and military groups employ in order to ID best fit for a role on a tem or determine predictable outcomes based on a given set of circumstances and the individuals involved.

Many of the behavioral economists over the years have presented sound academic papers on behavioral bias, but few have presented answers to this dilemma. However, one such answer could be for both advisor and investor to complete a robust and validated Natural Behavior Discovery process, a personality assessment. The 5 benefits outlined below are:

  1. Highlight areas of bias in both parties

Part of knowing one’s behavior beyond what’s presented on the surface (Learned Behavior) is understanding our internal quirks. These are the potential pitfalls, or holes, in our irrational decision-making process. By acknowledging them and mitigating their effects, natural bias can be effectively managed.

  1. Identify risk tolerance

Part of the basis of any successful financial planning is knowing the limits of a client’s exposure to market volatility vs. their goals for accumulating and managing wealth. As it’s part of a person’s personality, a discovery process platform will uncover their natural risk propensity and risk tolerance, so a financial advisor can plan accordingly.

  1. Minimize compliance issues

There are two (2) ways to avoid compliance issues, beyond following the letter of the rules and regulations placed upon advisors. First, ensure a clients goals are accurately identified. With a definitive path laid out in order to attain them, simple hints and reminders will help guide the client to stay true to their own plan in the face of market volatility or life changes. And second, matching personality types between client and advisor. Having similar communication styles and/or ways of thinking about finances, risk and decision-making will minimize the risk of mis-communication and misunderstanding. A proper assessment of all parties helps to ensure the closest match.

  1. Improve communication

Much like matching personalities, everyone has a certain communication style in how they best engage others. Some may need more upfront information, and then time to reflect and absorb or reach for themselves, while others just need a quick run-down of the bullet-points. Adapting to an individuals style helps keep every engagement successful and personal. Most compliance issues arise from poor communication.Assessing the styles of all involved helps close the gap.

  1. Deepen client relationships overall

The combination of the points detailed above provides a holistic method to successfully engage each client on a personal level, deepening that relationship while mitigating gaps in personality and communication. As the financial services sector becomes more familiar with behavioral economics and the role it plays in terms of strategic thinking in firms and with regulators, it is now expected that the financial advisory industry as a whole will take biases and irrational behavior into account in the product design and marketing process, as well as in their overall strategic planning. The opportunity is to now apply these psychological tools and insights to financial relationships and decisions, to achieve a specific goal with the investor’s best interest in mind.