On Your Toes
It is rarely simple to accept change. Retirement plan advisers today are faced with unprecedented change that is beyond their control. The changes occurring in the industry today are swift, sweeping, and significant. Plan sponsors are more concerned with retaining customers and paying utility bills than they are with meeting their retirement plan adviser to discuss which 401(k) plan auto-feature should be added. Plan sponsors are not happy. Plan participants are dismayed. A large number of plan participants fall somewhere between being concerned that they might become the victim of the next plant closure and pondering a future where they see themselves needing to stay gainfully employed into their 70s. Such a scenario has caused more than a few advisers to surf that fine line between depression and hibernation as they struggle with the question: “What should I do?”
What is the retirement plan adviser to do?
Advisers are used to activity—whether it is meeting with clients, looking for the next client, or strategizing a course of attack that targets a competitor whose firm has stumbled in the press recently. Advisers are energetic people. When nothing seems to make sense in “these unprecedented and uncertain times,” it seems like the logical time to pose the question: “What should I change?”
Absent a retirement plan adviser’s ability to revise the macro-economy, it might make sense to take a hard look internally toward one’s own organization and ask, “What can we/I do better?”
A quick distillation of business school change models will result in two dominant strategies for implementing improvement: continuous process improvement and business process reengineering.
Most advisers have worked in organizations where continuous improvement processes were part of the cultural lexicon. An employee completes an idea or suggestion, the quality team reviews the idea, and if the suggestion is perceived to be of value, the submitting employee receives $50.00 and a recognition award. That works in many organizations—in good times—but, during these “unusual times,” firms should consider increasing the stakes by taking a larger calculated risk with business process reengineering.
During this period, when so much of an adviser’s day is consumed by uncontrollable events, noise, and concern for what may occur next, doesn’t it make sense to carve out time (90 minutes a day for a week or two or three consecutive days) for tossing your entire business model up against the wall, and have someone ask the tough foundational questions?
Ask yourself: What business are we in? What is our target market? (With a follow-up question—what percentage of our accounts fall within the bulls-eye?) Can we afford to continue producing these personalized-return sheets for the three plans? Is report production our business—or is report production holding us back from being extraordinarily more efficient somewhere else?
You (or someone) must ask the hard-hitting questions and assume nothing.
Accepting the Risk
Business process reengineering can be successful only by starting with a blank sheet of paper. Anything less will quickly surface as a continuous improvement effort, whereby existing processes and systems are “tweaked to greater efficiency.” That is not necessarily bad, but it doesn’t take advantage of the macro change-oriented environment prevalent today.
What makes this work is an up-front acceptance that there are no sacred processes or clients when participating in such a session.
Advisers who accept the time commitment and challenge associated with a business process reengineering session should be rewarded with a more efficient and streamlined organization.
Steff C. Chalk is CEO of the Fiduciary Consulting Group, a fee-only fiduciary consulting practice serving corporations and nonprofits. A judge for the PLANSPONSOR Retirement Plan Adviser of the Year award, and a faculty member of the PLANSPONSOR Institute, he is also the co-author of How to Build a Successful 401(k) and Retirement Plan Advisory Business.