Disturbing Trends in the Financial Industry

Several trends in the financial industry are contributing to how we perceive Wall Street.

  1. CNBC reports, fewer individuals are participating in the markets, most likely due to the belief that large traders and high frequency trading are rigging the markets against the individual.
  2. In his blog, Matthew Yglesias, reports: “In a survey of 500 senior executives in the United States and the UK, 24 percent of respondents said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.”
  3. The Dodd-Frank bill, along with other legislation has been created to minimize the impact of the actions of large investment banks and trading organizations on the world economy.  This legislation often clumsily restricts the actions of the whole industry in order to protect our interests from unethical practices.

John G. Taft, in his blog How to Fix Financial Capitalism? Focus on Ethics, believes that the only way to restore public trust and confidence is to have each bank and trading house commit to and invest in professional and business ethics as a core principle and value for the company and each employee.  Many companies outside of the financial industry have done this resulting in excellent results with building trust with their customers and stakeholders.

Two more articles on corporate corruption and the need for ethical conduct with consulting:

The Spreading Scourge of Corporate Corruption,

Shared Ethical Responsibilities of Consultants and Clients

Finally, Susan Snyder describes a detailed process and critical steps to creating an ethical culture in her blog:

Creating an Ethical Culture: A CEO’s Checklist

Is an ethical approach to business and the community part of your company’s core principles?  What does it mean to your stakeholders, employees and customers to have an ethics first approach?

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Viewpoint: The Big 8 Reasons You Shouldn’t Use a Large Consulting Firm

David Fields writes in his article, Viewpoint: The Big 8 Reasons You Shouldn’t Use a Large Consulting Firm that he has become convinced that large consulting companies are no longer the best solutions to most clients problems.

The large consulting companies generally provide sound work and feature excellent processes and are smart, conscientious professionals.

In most cases, however, a company will achieve better results by turning to a small consulting firm.  He gives 8 reasons that a small firm will give better results.

  1. Larger staff does not equate to more efficacy.  Five hundred mediocre strategists just means reaching more people with mediocre ideas
  2. Big Ideas emanate from small collaborators.  Many of the new ideas are being published by members of small consulting firms.
  3. Increased personnel drive decreased efficiency.  Having your project handled by a consultant stamping out identical solutions with efficient precision is not beneficial for your company.  Thus extra capabilities only results in increased overhead.
  4. “We’re right where you need us” holds little sway.  In the current age of internet communications and efficient travel, having a consultant located closely to the assignment has little value.
  5. Entrepreneurial thinking is found in small companies. Small consultancies understand being flexible, nimble, cost conscience, and the value of disruptive thinking.  You are less likely to find this thinking in large, bureaucratic organizations.
  6. The big thinker won’t be working on your project.  When you engage a breakthrough thinker in a small consultancy, you most likely will be working with that key person.
  7. Large consultancies are slow to adopt new ideas.  Momentum is a fact of life in a large organization.  Small organizations are more nimble and able to adapt to new information.
  8. The consultant’s success is not aligned fully with your outcome.  When you work with a boutique consulting group, there is little doubt who the customer is and that the consultant’s success is closely linked to the success of the customer.

There are times, such as projects that requires a large resource pool, that a large consultancy is more advantageous, but in many cases a smaller company will be more responsive and the outcome will be better aligned with the company’s needs.

Adapting to a Rapidly Changing Environment

With the pace of change being extreme in today’s business world, people who can adapt rapidly are usually the most successful. You can’t afford to lag your competitors.

To be successful with change, you must gain new skills.

Jeff Haden in his article: “How To Master Any Skill (No Talent Required)”, talks about not only applying the hard work to learn a skill but the need to get out there and make mistakes to really master a skill.  Jeff goes on to show several examples about how this works.

You can’t be timid and wait until you master a skill, you need to go ahead and make mistakes.  You need to also learn how to minimize the impact of those mistakes, however.

Informal Market Research

Market research doesn’t have to be complicated or expensive. You can find out lots, just by striking up conversations with or calling the appropriate people.

If you really want market intelligence, first do some planning:

  1. What do you want to know?  Do you want to know what your customer thinks, do you want to know what the market conditions are or do you want to know what your competition is up to, etc?
  2. Who is available to talk with?  Can you call a supplier that also supplies your competition, can you talk with your customer who also uses your competition or can you ask some other entity like a bank or some random business person about how she/he perceives the general business conditions.
  3. What questions will get the answers you need?  What lead-in questions will you use to get the person talking?  What follow-up questions can you ask?  I often just ask people; How’s business?  It’s amazing how much information that person divulges.

You should invest the effort to form a relationship with the person you are asking questions of.  They could become a long term source of valuable information for the future.  You shouldn’t be too aggressive with the questions, just let the person talk and ask occasional questions.  Don’t forget to reciprocate and give the person some valuable information back.

It’s important to continually monitor your business, market, customer and competition by talking with the right people and listening closely to what they say.

Business Growth – Keeping it Simple

I read some sage advice from a source that may not be everyones cup of tea.  This person is a consultant to the MLM (multi level marketing – AMWAY is the most famous company) industry.

http://networkmarketingcures.com/hot-training/its-not-that-complicated-stop-making-it-that-way/

The point, though can be applied to every business.  How to focus on growing your business.

  1. Keep it simple.  Put all of your energy into the big picture for your business.
  2. Decide who the most valuable customers are to you.  Why?  Build a list of these people.
  3. Why would they be attracted to you?  To someone else?
  4. Focus on building a relationship with as many of these people, not just reaching them.
  5. Master one communication method.
  6. Finely craft your message.  Make sure it hits as many of the key points as to why your customer should be attracted to  you.  Hone your message, razor sharp.
  7. Spend 15 to 30 minutes per day perfecting your message and working on getting the message out to your target customers.

Focus is key

“The ’secret’ to having successful marketing campaigns is copywriting. Better known as persuasion by words. Communicating your message clearly and directly to your target audience to move your business forward. This is something you should put all of your psychotic focus into studying.”