Managing transformative change: Lessons learned

The independent wealth management space continues to evolve rapidly as firms look to address the changing needs of financial advisors and clients. In a consolidating industry, where traditional business models and corporate structures may no longer be sufficient to drive sustained growth, all businesses, no matter the size, may need to transform parts of their structure or operations to thrive in the future.

The amount of planning, resources, and risk involved with meaningful change may seem daunting. But putting off necessary business optimizations because the process seems too heavy a lift could have serious implications for the long-term health and viability of your firm or practice.

My firm, Osaic, is in the midst of a major effort to unify multiple wealth management firms into a single entity. We’ve learned a lot through this process and through other large-scale changes and integrations, which has resulted in transferrable lessons that are applicable to all transformation. If your business isn’t transforming, it might not be growing so whether you’re in midst of huge change or modernizing to keep pace with the times, here are some tips that can help guide transformation.

GATHER INPUT FROM STAKEHOLDERS ACROSS THE FIRM

One secret to the success of any significant project is to make the planning process inclusive. Before starting a project, you should gather as much input as possible from a wide variety of people and departments. Even small or necessary changes have implications for other areas of the business that you may not have planned for. Some of the best ideas come from those working in the day-to-day rather than from the top of the organization. Functionality that’s important to one group may trigger broader conversations that improve the project, so take in all the feedback you can and make time for the larger group to gather regularly and discuss solutions and progress.

PARTNER WITH VENDORS TO ENSURE SUCCESS

Most transformation will require you to work with outside parties and vendors. Treat your third-party providers as true partners throughout the entirety of your project, starting early in the planning process. In a world of interconnected technology, nurturing strong relationships with vendors who work on your systems and platforms is critically important to success.

At Osaic, the first phase of our project had more than 150 external partner applications that needed to be transitioned over the weekend of our conversion.

To prepare, we conducted mock conversions with vendors, including our clearing firms, in a test environment. These practice runs allowed us to refine our process and course-correct as necessary. This was enormously helpful and uncovered several opportunities for improvement ahead of our transition.

You may not have such a large network of vendors but working closely with anyone involved in your business’s transformation, however complex, will lead to greater success.

SET REALISTIC EXPECTATIONS

When managing change, you must also manage expectations. Those overseeing projects should be realistic about what to expect, when to expect it and how it will impact the way users perform their jobs. Don’t overpromise. You run the risk of underdelivering and causing resistance to the change.

It’s also important for the teams to know they’re working toward something attainable, so they share honest feedback and input. We pivoted our approach when we realized the teams didn’t feel confident that they could deliver on the expectations initially laid out. They told us they needed more time, which we accommodated, and now they are working steadily toward the goal.

Clearly lay out to impacted audiences what the new environment and user experience will be after the project is completed. Let them know what, if anything, is expected of them, as well as what will change. Will they need to create a new login, remember saved passwords or recreate shortcuts? Being transparent will help users embrace change.

COMMUNICATE AND THEN COMMUNICATE AGAIN

Once you’ve determined what will be different and set reasonable expectations around your project, you must put tools and training in front of your audience to prepare them for their “next normal.” Then communicate with them on a frequent and consistent basis.

You should also make sure that communication is a two-way street. Your users or clients have firsthand experience with the systems, tools and platforms that may be changing, so leverage this knowledge by asking for feedback and empowering them to help you move forward.

While we did a good job communicating in advance of our conversion, one lesson learned is that we may have implemented our communications strategy too early. As a result, some of our audience may have tuned out because the change was too far in the future. As mistakes go, this one wasn’t too bad, but finding the right time to communicate in advance of change is important.

TREAT CHANGE WITH CARE

As you consider change in your organization, it always helps to have some standard best practices. Here are a few that I implement in every transition:

• Establish workstream leads and partner with them to create a detailed project plans. Documenting every step will take time but will be worth it in the end.

• Set up a command center. Having your team maintain oversight during implementation to answer audience questions and troubleshoot issues is imperative.

• Develop an FAQ library. Maintaining a running list of frequently asked questions and approved answers will help streamline responses during future projects.

Each project is unique and comes with its own set of opportunities and challenges. While our overall conversion project has gone as smoothly as possible, there were unforeseen challenges. And the process is not over. As investors know, past success is not a guarantee of future results. But proper planning, cooperation and solid communications can pave the way to success.

Cindy Hamel is executive vice president for business transformation at Osaic.