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Can Behavioral Diversity Strengthen Financial Advice?

– First Published on Nasdaq –

When financial advisors bring unique backgrounds and perspectives to the advisory process, including behavioral diversity, it can strengthen financial advice.

That’s not only a win-win for advisor and client, but it can also be the edge advisors need and the edge savvy clients are looking for. In fact, delivering consensus advice that results in mediocre outcomes will cease once advisors and clients recognize the importance of understanding behavioral diversity.

One advantage of adding behavioral diversity to the planning mix: Financial advisors can provide advice that delivers wealth creation supporting a client’s individual life goals. This advice will truly focus on the uniqueness of the client.

Behavioral diversity overdue

I wonder how much of the financial services industry has robust practices in dealing with behavioral diversity in their hiring processes? But I question how many have extended this approach and consideration to the financial advisory exchange between advisor and client?

Current diversity discussions tend to focus on gender identity, sexual orientation, age, race, ethnicity, religion, marital status and health & disability status, but little debate occurs around behavioral diversity in decision-making.

And behavioral diversity concentrates on the idea that, within a workplace, different types of behaviors work better. Why then is there little or no discussion about behavioral diversity in the financial planning process?

If behavioral diversity is defined as encompassing different and varied behavior patterns exhibited between individuals, consider these questions:

  • How can a financial advisor quickly get below the surface to understand the behavioral diversity of their clients?
  • How can advisors deliver advice that is unique and satisfies their client’s behavioral diversity?
  • How can advisors and clients have a meaningful communication exchange based on one another’s behavioral diversity?

The key is to reveal a client’s varied and unique way of thinking, not just in terms of life goals but also how clients make financial decisions and their emotional reactions to markets.

I would suggest that most of the financial planning industry can understand their clients’ bias and risk factors. But behavioral diversity refers to the traits and characteristics that make people unique. Without addressing that individuality, can you ever really achieve the “secret sauce” of truly top-flight financial advisors?

People react differently to an extraordinary range of issues and, in the process, exhibit significant behavioral diversity. This is especially true when money is involved. The emotional pull of money brings out the best and worst in individuals. This, for any financial advisor, is a potential minefield.

Objective rather than subjective

With this in mind, let’s reflect on previous articles published in this space about using a validated behavioral profiling process to identify significant levels of inherent behavior. Adding such functionality to your existing tech stack to reveal communication styles and behavioral diversity can go a long way to helping everyone feel heard and seen.

Once you have automated this aspect of the advisory process, you can get to the good stuff, planning to increase the wealth that furthers both the mundane and the exciting life goals.

For the financial planning industry to succeed, it is not enough to break down walls and start growing a behaviorally diverse profile of each advisor and client. Behavioral diversity must be understood and managed on an ongoing basis so as not to be superficial. Authenticity may be an overused word these days, but it is the critical goal here.

Onboarding this extra edge

Creating change in the financial advisory industry requires that several elements be put in place:

  • A genuine commitment to investing in data-gathering to reveal a client’s behavioral diversity.
  • The transparency to build trust through advisors-client matching.
  • Education programs that help advisors understand behavioral diversity.
  • Recognition that behavioral diversity is not tokenism and is more than and goes deeper than current DEI initiatives. (It is an “and,” not an “or.”)
  • Look at all aspects of the diversity pipeline.

Consider the difference. On one hand, a number of meetings with a client before you can start delivering a tailored financial plan and, even then, it may never be truly objective or well-focused on their individuality. On the flip, imagine a client spending 10 minutes to complete a questionnaire that delivers a deep understanding (for them and for their advisor) of every aspect of their behavioral diversity.

See Leon’s other writings for Nasdaq here.

Top 20 Behavioral Interview Questions to Identify High-Potential Practice Managers

The talent management process companies go through has come under much scrutiny over the last year. It is no longer a matter of finding the right candidates for the right role, managers have started taking into consideration the behavioral aspect as well. If you too are ready to embrace the right hiring strategy to meet the needs of this new season, below are the top 20 behavioral interview questions you should be asking.

Why prioritize behavioral questions?

We’ve heard it times and times again: “Great businesses are built on people”. This entails that matching the right experience and skills to the right role is what makes successful teams. However, the traditional process of screening candidates lacks an essential component that identifies high potential candidates. A behavioral assessment. 

It is not only a matter of understanding your candidates’ behavioral tendencies, you should also be able to anticipate how they would react in a given situation. When recruiting a practice manager, you are recruiting for a client-facing role that requires certain agility in customer service. Knowing that behavioral intelligence deepens engagement in each human interaction makes it a must-have personality trait in your next hire. Only a behavioral assessment can accurately predict whether or not your candidate has what it takes to fill this role.

Make no mistake, this doesn’t mean that their resume is not worth taking into consideration. However, a person’s skills are a moot point if they can’t fulfill the behavioral requirements of the role, which in this case is effectively interacting with customers.

What behavioral indicators should you be looking for?

The behavioral questions you should be asking your next candidates help determine specific insights. Each role requires a given behavioral style that can only be uncovered through the right assessment. Before we dive into the questions you should be asking, let’s discuss those behavioral indicators.

Adaptability 

Many hiring managers will admit that adaptability is unanimously the most screened-for skill. Even from a business perspective, in order to stay competitive, companies need to continuously adapt to the changing economy and market needs. It only makes sense to ensure new hires are inherently capable of adapting.

Culture & values 

Company culture is an essential component of building successful teams. When screening candidates, you need to ensure they share the same beliefs and values as your organization, but also bring a diversity of thought and experience that will drive your company forward. 

Collaboration

Hiring people who can collaborate effectively and work well with others is essential to success. This sense of teamwork may not come naturally to every candidate you interview. While we all make efforts to effectively work with our teams, some individuals have an inherent ability to prioritize it and marvel in a collaborative environment.

Leadership

There is no doubt that great leaders make great companies. When hiring for a managerial position, leadership is not only a soft skill your candidates should have, it needs to be part of their behavioral style for a successful team. Leaders are expected to inspire, motivate and unleash potential in others. It cannot be taught.

Development 

A successful interview assessment not only uncovers your candidates’ skills, but it should also pinpoint development and growth potential. In today’s fast-paced work environment, it’s become expected of your employees to potentially grow into new roles and leadership positions. A behavioral assessment enables you to predict if a candidate has what it takes by screening for goal setting and self-motivation.

Productivity

Each role demands a certain level of multitasking. Candidates should be able to not only manage their time but also prioritize their tasks and decide which ones need to be tackled immediately, and which ones can wait. Hiring someone who can’t get this right means that key due dates and project timelines can fall through the cracks, ultimately hurting your business. People who can manage their time and prioritize effectively will help your business thrive.

What behavioral interview questions should you be asking?

Even though each role is different, these behavioral interview questions can help you identify high-potential candidates. Download the full list below.

What’s Next?

So you’ve gone through the interview process, you’ve asked the right behavioral questions, and got all the answers you needed. You might be wondering by now, what’s next? 

The next step is to determine the candidates’ behavioral styles. Through 500+ insights, the DNA Behavior discovery process allows you to uncover significant aspects of their natural behaviors and assess whether or not they are the fit for your company. Start your free trial today, and take the guess out of your hiring strategy.

hiring-what-you-see-may-not-be-what-you-get

HIRING – What You See May Not Be What You Get

Hiring is not an exact science, but there are ways to mitigate getting it wrong.

Twenty-seven percent of employers in the U.S. who reported a bad hire said that a single bad hire costs more than $50,000. (According to a CareerBuilder survey of 6,000 hiring managers and HR pros worldwide, 2013.) The internet is rife with tales of how expensive a bad hire can be.

But the bigger issue, and the one that has the potential to cause long-term damage to any organization, is the impact a bad hire has on productivity and morale. Matching candidates talents to the specific role, the team culture and conducting behavioral interviews to get below the surface, is more likely to get you to the right candidate for the role.

Sixty percent of hiring managers report that bad hires dont get along with co-workers, according to the Society for Human Resource Management.

Keep in mind that candidates will have a mixture of natural, learned and cognitive behaviors. These insights are measurable and, using a validated tool, can be revealed at the outset of the hiring process. Still, it isnt enough to fill a vacancy. The fit to the team, the organization, the culture and the up-line management, are significantly more important than the skill set a candidate brings to the table.

The lesson for CEOs: Dont hire yourself. Just because the interview went well and you connected does not translate to a fit for a role. Hire to the job. Hire to bring the talents you dont have to the organization.

And for you Recruiters? If you want to hire well, make sure you have a benchmark of the typical behavioral characteristics needed for high performance in specific roles. Not only do you need benchmarks for the role, you also need them for the team, department and decision makers. Without this information, the hire will be based on resumes, references and gut instinct.

Your reputation is riding on it. Candidates will be watching for vacancies at organizations who are known for their integrity, culture and treatment of their people. They will be more interested in the role than the salary. They will want your company name on their portfolio of work. They will want to boast they work for you.

Assessment Centers should take recruiting seriously too. Spend time with candidates. Its not enough to hire those that look good on paper and fit all the benchmarks; they also need the right character traits. If you are recruiting to a highly-pressurized role, you need to know their potential to manage others under pressure. Is there risk associated with the decision making in the role? How will the candidate respond under pressure? Are they going to become a rogue trader (for example)? Time spent in an assessment center provides insight into the extent a job applicant meets these qualities.

What to do?

  • Use a validated talent discovery system to get under the surface and discover the natural strengths and struggles.
  • Compare the outcomes to understand the candidates team fit and how they will interact with the leader and team members.
  • Have a list of powerful questions for conducting a behavioral interview based on the candidates natural strengths and struggles.

The most effective investment that a business can make into the hiring process, is to devote time and energy into benchmarking the talents and behaviors required for different roles. This makes for a smoother and more effective hiring process as you match candidates to roles.

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

Hell Yeah or No (#55)

I’ve heard “You have to listen to the Derek Sivers/Tim Ferriss Podcast” from so many friends and colleagues that I’ve lost count. And they were right. I finally found the time to do so and I was not disappointed.

Derek Sivers founded CD Baby in 1998 to solve the problem of distributing his own CD’s to independent musicians. After friends asked if he could sell theirs, too, CD Baby grew into an established online CD store without any investors. By 2008, CD Baby was making about $250K a month net profit.

Derek is incredibly well-spoken, insightful and thoughtful and is a treasure trove of life and business wisdom. One of my main takeaways from listening to Tim’s podcast interview of Derek is his “Hell Yeah or No” approach to life.

This ideology was solidified some years ago when he said “no” to a trip to Asia that he didn’t want to go on.  He realized that, by saying “yes” to things in his life that he really didn’t want to do, it took away from what he truly enjoyed doing and distracted him from his goals and objectives. So, he decided then and there that if something wasn’t a “Hell Yeah” from his perspective, then it was a “no.” Today, he says no to most requests and thus has time for the things that he loves and really wants to do.

I can really relate to this struggle and have tried to become more aware that every time I says yes to something that I’m not genuinely excited about, it’s a drain on my energy and a distraction from my long-term goals and happiness.

The “hell yeah” principal is also something that has improved our recruiting process at AP. We realized that, while we eventually hired the right person, we’d often let the wrong people get too far along in the interview process. Although interviewers saw red flags along the way, they’d wait for others to validate them. After taking a close look at our recruiting process, we decided that if a candidate is not a potential “hell yeah” from the beginning, then they are a “no” and it’s made a significant improvement in our hiring efficiency.

For the next few weeks, when you are asked to do something, ask yourself, is it a “hell yeah” or a “no”? I think you will find this filter to be liberating, I know I have.

For more of Derek’s wisdom, I too recommend that you listen to his podcast interview with Tim Ferriss or watch his Ted Talk on “How to Start a Movement.”

Quotes of the Week

“Whatever excites you, go do it. Whatever drains you, stop doing it.”

Derek Sivers

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5 Keys to Behaviorally Smart Hiring: Don’t rely solely on resumes, concentrate on who the person is

Great resumes can be bought. Behaviors can’t be.

The only way to effectively hire and retain candidates is to ensure you not only fit the right skills to the right job but that you also find the right cultural and behavioral style fit for the role and team.

Validating behavioral intelligence will deepen engagement in each human interaction the candidate will have in the business as part of their performance. A person’s skills will be a moot point if he or she can’t effectively interact with the team and/or customers or if the person is a social butterfly when a task-oriented person is needed.? The process of exploring and validating behavioral intelligence should also uncover life and business decision-making patterns as this could determine whether or not a candidate will be a long-term, loyal, and successful hire.

Happy Candidate in the Right Role

Key 1: Alignment of vision and life direction; engaging head, heart, and talent

Ask questions to discover if the vision and direction the candidate has for his or her life aligns with the vision and direction of the organization. Another important question to investigate is whether the organization can deliver its part to bring a successful outworking of the candidate’s vision and life direction? If the answer is yes, then not only will it be a great hire, but likely a long-term relationship. An individual is less likely to consider leaving when he or she is a part of working towards a shared key goal or milestone.

Key 2: Uncover life and decision making patterns

Understanding how to communicate effectively is the most valuable route to uncovering behaviors, decision making patterns and strengthening engagement. Knowing the communication style of each candidate prior to the hiring interview will enable the interviewing panel to customize their questions to the individual’s communication style.

To be able to effectively uncover life and decision making patterns, it’s important to understand how to communicate and the right questions to ask.Gaining insight into the communication and behavioral style of a candidate will reveal how well the individual/ he or she will fit with colleagues and respond to managers and supervisors.

Key 3: Match behaviors as well as talents to the role–having the skills to do the job isn’t enough

It is best to keep in mind, however, that having the skills to do the job isn’t enough. People want to work with meaning. Jobseekers will apply for positions they feel match their skills, but often the hiring process fails to match both talents and behaviors to the job. Whilst organizations need to secure the talent necessary for the success of the business, matching behaviors, as well as talents to roles, builds foundational blocks for long-term success.

Key 4: Don’t hire yourself

The trap many hiring panels fall into is assuming that a great exchange between candidate and hiring panel translates to best role fit. To avoid this pitfall, the interview panel needs to understand their own individual and collective behavior, communication and decision-making style in advance. This awareness will enable the panel to adapt their communication and interviewing style to the candidates. It is natural to feel more comfortable with communication that mirrors one’s own style. Conversely, it’s also the case that there could be an adverse response to communication styles that do not align.

Key 5: Be known as a champion organization; one that has candidates lining up to get in. Everyone wants to work for a winner.

Be Known as a Champion Organization

Understand and implement each of these 5 keys, and you are more likely to hire effectively and retain top talent. People want to work for an organization that values talent, communicates effectively, and is known not only for its success in business but its inherent ability to know, understand and engage with employees to get the very best out of them/unlock their potential. Having a reputation as an organization that delivers their employees vision, in addition to delivering the vision of the business, will attract top talent.

Key 1: Alignment of vision and life direction; engaging head, heart, and talent.

Key 2: Uncover life and decision making patterns.

Key 3: Match behaviors as well as talents to the role; having the skills to do the job isn’t enough.

Key 4: Don’t hire yourself

Key 5: Be known as a champion organization; one that has candidates lining up to get in. Everyone wants to for a winner.

There’s no such thing as the perfect candidate. Look for candidates who can perform at the job with a bit of training and practice but have a communication and behavioral style that’s the best fit for your current team dynamics.

Remember: Great resumes can be bought. Behaviors cannot be.

Behavioral Approach to Hiring Trap: The Dangers of Hiring Yourself

Right Person, Right Job, Right Fit

Hiring is one of the most significant functions of leadership. Hiring people that fit the culture of the organization can be more important than focusing on talent and skills alone. Hiring candidates that are culturally fit with your organization can help companies improve employee retention, engagement, loyalty and organizational stability. Understanding behavioral styles and how candidates would fit into not just the company culture, but the team dynamics and the specific tasks they have to perform, is fundamental to the hiring process.

Results of studies over the years vary on the exact cost of hiring the wrong person. But unquestionably, a bad hire brings exorbitant costs in the efforts of time, training, productivity, disruption, and possibly lost sales. These costs certainly include a lost opportunity to have had the right person accomplishing the tasks.

Overall, hiring is an expensive investment as it takes one of the most valuable resources: time. Therefore, it shouldn’t be rushed. Every hire must add value and fulfill a strategic role that enables the vision of the business to be expressed and implemented.

If the candidate performs well at the interview stage and theres a personal connection, exercise careful consideration as you might be in danger of hiring yourself. Hiring candidates who reflect your characteristics is a costly trap many leaders fall into.

If you are a leader involved in hiring, ensure that there is a very clear idea of the job to be filled and the value getting the right hire brings to the business. Feeling familiar and comfortable with a potential hire might not be good for the business but it takes an evaluation. Understanding how to manage different communication and behavioral styles to best engage hires with the business is a key to the evaluation and solution/ answer.

Wise leaders hire and develop people who are smarter than themselves. To be a proactive leader, understand the gaps in your own skill set and look for candidates who are able to fill those gaps in order to build a team that can deliver continuous excellent outcomes. A well rounded team leverages each team members strengths to match the tasks to be completed.

The key is to understand how to manage individuals behaviors within a team environment. Successful teams will always include, for example, relationship builders as they glue the team together and manage stake-holders expectations. Strategists, who are the planners, steer the team to deliver required outcomes on time. Initiators, who are the take charge type, motivate and author changes in direction and pace if required. Reflective thinkers question and evaluate the details.? Such behavioral factors working together bring strengths to an organization or team but also present some blind spots. As a leader, it is important to understand this dynamic and use the knowledge to draw together a cohesive, balanced, and high performing team.

Hiring the right person for the right job should involve a variety of viewpoints and skill sets. You want your team to challenge each other to achieve at the next level.

Understanding communication and behavioral styles uncovers:

  • Talents ? predictable behaviors that are ingrained
  • Learned Behaviors ? behaviors that are developed or evolved:
  • Skills
  • Knowledge
  • Experiences
  • Environments
  • Core Foundations:
  • Passion
  • Values
  • Purpose
  • Healthy Money Attitude

Leaders, heres your challenge: Use your understanding of different behavioral styles as a stepping stone guide to the right hire and:

  1. Be clear on the company and team values and company culture; who will fit in and/or what complimentary styles need to be added
  2. Evaluate the process, role, specific tasks and responsibilities that require an additional person
  3. Develop a benchmark for the “desired” behavioral style of the new hire that fits the role, the team and the company
  4. In addition to reviewing resumes, references and interview results, add a behavioral assessment for each candidate to see how close to the desired benchmark profile they are for another data point in the decision making process.
  5. Look at what the team will look like with the new person on the team (should there be a shift in responsibilities to leverage individual strengths?)
  6. Include a discussion on behavioral styles in the hiring process (this offers some really great discussions and insights that regular interview questions don’t provide.)

Invest time into building your team through both resume content and uncovering natural behavior, which provides stability over the long-term. Natural behavior is the unique mix of ingrained traits that shape how a person responds to other factors in their life that constantly change ? upbringing, workplace, learning, passion, relationships. Uncover this and you will have the right person in the right job delivering the right fit and will not have fallen into the trap of hiring yourself.