David Shelton: What is your firm’s ‘meaning of life’?

David Shelton

Research tells us there is not only such a thing as a mid-life crisis but a quarter-life crisis too, which apparently hits people in their late-20s. People facing such crises often get caught up in meaning of life questions, such as “where am I going?” and “how will I get there?”. You do not have to look far to find parallels in the business world, especially the advice market.

Questions such as “what business are you in?” and “what is your vision and mission?” have been around for years. While they serve their purpose in certain planning processes, the answers do not always lend themselves to obvious actions and practical outcomes. There is a time and place for everything and the same applies to the meaning of life questions. The questions that work best for advice businesses are:

  • What do we do?
  • Who do we do it for?
  • How do we do it?
  • Where do we do it?

The good news is that single sentence answers are best because it is important to be concise and specific. Lengthy answers suggest a lack of clarity and that the business is not the master of its own destiny. Only the business can set its own direction and far better to get that right than let the vagaries of a rapidly changing market take over.

So, when is it worth spending time on these four important issues? There are three situations where the process can be useful.

  • Setting business strategy
  • Working out or reviewing the client proposition
  • Testing the perspective of the management team

It is impossible to set a clear strategy and plan if we do not know our target market, exactly what we offer them, how we provide the services and where we expect to deliver it. This may seem obvious but it often gets missed, and the first three points are particularly important.

We know there are as many segments in the market as there are variations on financial advice and planning, so being clear about this is very close to the “meaning of life”. And all firms have different values and methods of operating, which is equally as important to tie down.

Consider this example set of responses for an established retirement planning advice business:

  • What do we do? We help you plan your life in retirement and manage your financial affairs to achieve what you want.
  • Who do we do it for? Private clients with over £100,000 who are within three years of planned retirement.
  • How do we do it? Provide a comprehensive approach to retirement planning within which we prepare a long-term financial plan. We work with other specialists to make your plan come together.
  • Where do we do it? In our offices or those of other specialists; whatever you prefer.

As you can see, clarity is useful when setting or reviewing the client proposition. The latter, by its nature, is very detailed, so having a good overview that sets the boundaries is a helpful start. In fact, it is essential to start here. Never begin proposition development in the detail of service components and pricing.

The final use of the questions is very different. As principal you may sometimes wonder if everyone in the business is pulling in the same direction. Do they share your views on where the business is going and the types of client that are really important? Ask these questions during a management or team meeting, tell colleagues to answer in a single sentence and base it on what comes to mind first. Avoid judgement when you share the answers but be prepared to debate the differences.

This approach has been used many times to help planning, proposition and team alignment. The following example for “risk and protection” advisers shows it will work for any business:

  • What do we do? We make sure you have all your main “life risks” managed, from becoming seriously ill to protecting your family.
  • Who do we do it for? Families and working people between the ages of 30 and 50.
  • How do we do it? Streamlined advice with online fact find and product selection, and automated reports to make sure you have the right policies for your needs.
  • Where do we do it? Internet and telephone.

Obviously this is a very different business from the retirement planners but the few words sums up what it is about.

As with the quarter or mid-life crises the meaning of life questions can be useful when the time is right. We do not necessarily need to think about them every day but without them it is very easy to lose direction and competitive edge.

David Shelton is a consultant at Stoke Bishop Associates