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When it comes to resistance to embracing new technology, I’ve heard it all – from, “I built this business on relationships,” to “My clients never ask me for that technology.” Whatever your reason for your reproach – hubris, fear, unfamiliarity – technology is going to radically change your business. It matters little how you feel about it. Change is inevitable, and firms that approach it rationally and adapt to technology will have the best chance to successfully serve the next generations of clients.
Consider the iPhone. One shouldn’t make statements like this lightly, but the iPhone, introduced to us merely 10 years ago, changed the world. When Steve Jobs unveiled the iPhone in January 2007, he cleverly introduced it as “three revolutionary products” – a phone, iPod and a miniature computer in one. Reactions were swift and mostly cynical. Steve Ballmer couldn’t help but laugh. Jim Balsillie, then-co-CEO of the maker of BlackBerry was dismissive, calling it, “one more entrant into an already very busy space with lots of choice for consumers.”
How did these capable and otherwise successful executives, and other “experts,” get it so spectacularly wrong? What was it about the iPhone that left its competition in the dust while inspiring many imitators? Was it the touch-screen? Was it the high-resolution camera? The music player?
What most people missed was that the iPhone was built on an entirely new paradigm. It was not an incremental, linear extension of an existing technology. Rather, it created a wholly new genre that didn’t exist before its launch.
Looking back just a few years prior, the jump from the traditional landline phone to the early cell phone was easy enough to understand. It was a phone. A portable, untethered communication device that made our lives immensely easier, but it was still just a phone. Landline to mobile. The step was linear and incremental.
Then came BlackBerry. It was a cell phone, but it was also an internet device that sent and received emails. It made grown men and women look like teenagers gleefully texting their friends, thumbs pumping on their “Crackberry” devices. It had a huge impact on how we conducted our daily business. Some might even describe it as life-altering. But the progression from the conventional cell phone to BlackBerry was, again, linear and incremental.
Thus far, the evolution of the telephone device was like going from a vinyl record to a compact disc – improved with impressive features, but still more of the same.
Enter the iPhone. The only thing the cell phone (including BlackBerry) and the iPhone had in common was the word, “phone.” Unlike its predecessor, the iPhone was essentially a portable computer that let you take high-quality pictures, share those pictures instantaneously, search for the best restaurants in your neighborhood, make dinner reservations, make deposits to your checking account, look up your brokerage account and make trades, read and watch the news, check the weather, listen to music, watch movies and shows, find and pay for a ride, and on and on. It opened up a whole new world and introduced us to new ways of doing things.
Oh, and it made calls too.
It was something thoroughly different, in the league of its own. Yet, many put it in the same category as the existing cell phone. They failed to perceive that it was a product that was wholly other, belonging in its own genre.
Still, without the iPhone, your cell phone was (and still is) perfectly capable of making calls untethered to your landline. So when you upgraded your old cell phone to an iPhone, it wasn’t because it was “broken,” and you weren’t trying to fix anything by switching.
Herein lies your blind spot.
When considering new technology, you might ask (wrongly), “What’s broken?” or “What are we trying to fix?” Those questions stem from linear thinking. The answer is often, “Nothing is broken, and you are not trying to fix anything” just like your cell phone wasn’t broken, and you weren’t trying to fix anything by upgrading to an iPhone.
The new technology you are being pitched isn’t offering you incremental improvements to your current set-up with more “bells and whistles.” Rather, it’s providing you with radically different methods of doing things in ways that were never done or envisioned before. Thus, it forces you to use a bit of (often a lot of!) imagination to evaluate new technology because you can only assess them fairly with an unprejudiced open-mind, and not based on what you previously knew.
Your clients can make bank deposits with their phones but do they have to wait until month-end to see how their investments are faring? They have bought and sold houses or refinanced their home loans signing paperwork mostly on their computer, but do they have to do it the old-fashioned way when you require them to sign paperwork in ink to open an account with you? They have moved on from the traditional taxi service to ride-share service, but can they make an appointment with you on their smartphone instead of exchanging many emails?
The world has moved on to the smartphone – or post-smartphone – era, but is your firm still unwittingly stuck in the previous decade? Are you ready to serve Gen-X clients effectively without friction? What about the Millennials? They might appreciate your high-touch, personal attention. But your technology? Not so much. In fact, they will be quite unforgiving of any frictions they experience in interacting with you.
The good news is that the world is changing rapidly, but basic human needs remain unchanged – among them, the comfort of knowing that we will be secure financially and that our financial choices are aligned with our most important goals and deeply held values. Technology trends notwithstanding, that is what clients ultimately desire and what you want to help address. It’s just the expressions of service delivery that will be different.
Hoon Kang, CPA, CFP®, ChFC, CLU is a practice management consultant with Elliott Bay Advisors. His practice focuses on helping founder-centric advisory firms transform from practices to enduring businesses with transferable enterprise values. His articles have appeared in AICPA PFP Planner, Leimberg Information Services and Journal of Financial Service Professionals. He can be reached at [email protected].
Read more articles by Hoon Kang
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
