These last few years, we have seen a new generation of disruptive technology begin to influence our preferences and behavior, from the way we do business to the way we live. Whether you look at advanced artificial intelligence, language-translating earbuds, self-driving vehicles or smart homes, technology has entangled its way into the fabric of our daily lives to the extent that we find it difficult to delineate when or where its influence begins and ends.
This realization forced me to think about just how a few core principles still stand the test of time in the midst of this transformative era. While technology empowers new possibilities, it also exposes fragility in the current way of doing business. The perfect combination of unique elements and impeccable timing must be present for a business owner to not only recognize opportunity but harness it to grow. So what are those core principles we need to harness in order to succeed? How do we know, as advisers and business owners, where we should take transformative leaps to keep our firm competitive?
I recently sat down with Charles Koch, CEO of Koch Industries, a man who has lived through dozens of transformative periods in his lifetime, and we discussed what it takes for a company to sustain success during major evolutionary periods. While Koch Industries is a multinational organization with subsidiaries in industries like manufacturing, energy, fiber, ranching and finance, my talk with the billionaire showed me that success can be boiled down to two aspects that can make or break a company: change and culture.
As Mr. Koch put it, “Everything has improved in the last 100 years or so. Everything can be made better.” It’s a great reminder of how complacency stifles change. If everything can be made better, begin from the inside, out. Find avenues and opportunities for your stakeholders to challenge conventional thinking, present ideas on how to make the firm more efficient and effective, and encourage this innovative mindset by rewarding the team with project-based bonuses or fun competitions.
As an example, this summer will mark the Carson Group’s first RISE Innovation series, where stakeholders have the opportunity to submit their ideas and present them in a TED-style forum in front of the entire firm. The winner will get a cash bonus and more importantly, a way to influence the direction of the firm.
Your success as a firm will depend on you and your team’s ability to embrace new ways of thinking. If it’s not broken, break it. As the leader of your firm, it’s your responsibility to embrace and encourage that mindset. Mr. Koch understood the importance of instilling the idea of “change” early in his career, and it’s kept the company on top since 1940.
Another piece of wisdom I received in my conversation with Mr. Koch was about culture. The first thing to understand when trying to establish a strong, passionate culture is to let people thrive by designing roles around personal strengths. By recognizing how people work, process, and GSD — get stuff done — differently, you mold their skillset to the company, you retain them longer, and you do so because they’re inspired by their role in the firm’s growth.
This naturally leads to an element that Mr. Koch believes was instrumental in his success: diversity. He explained how the company exudes the core principle of “equal rights and mutual rights.” It’s given them a competitive advantage in attracting some of the brightest minds who might not have otherwise considered the firm.
Of course, advisers should take this a step further and explore an additional form of diversity: diversity of thought. With an aging adviser population and the decades-old stigma of the lack of gender diversity in financial services, we have an incredible opportunity to change the face of our profession for the better — to build teams that bring together people with differing experiences, ages, genders, backgrounds, races and ways of thinking. A firm full of “yes men” isn’t going to survive.
While these two ingredients sound idealistic, Mr. Koch reassured me they are not. Advisers may scoff at the “soft” or “fuzzy” best practices, but he will be the first to tell you it’s these very things that catapulted him to grow 6000-fold since taking over as CEO of Koch Industries.
Mr. Koch taught me no one is ever too old to learn something new. When an 82-year-old enlightens you on new technology in the modern world, you find yourself humbled by the never-ending journey to learn. To sharpen the saw. To evolve. To grow.