Leading the Call of (Consumer) Duty
Updated: Oct 30, 2022
Consumer Duty, the latest regulatory initiative for the Financial Services Sector has been finalised. We have timeframes to implement it, and I’m seeing lots of fabulous guidance and advice coming from some great sources. But how do we lead teams through this change (and others in the future)?
There is a lot of guidance around to support firms through this latest regulatory initiative. Suggestions for what it means, how firms can use it as a real opportunity. There’s a lot of great stuff out there.
I definitely see it as an opportunity for firms to develop and grow. To improve client service and engagement.
And I also see it as an opportunity to lead differently. To challenge the status quo.
Because it can be quite lonely I think, as a business leader. To absorb all of that guidance, hear what your compliance advisers are telling you, and then try to figure out what’s going to work for your business. Then to come up with the plan and solutions. When, let’s face it, time was pretty squeezed already!
And then there’s the challenge of getting the team to buy into what we’ve come up with to meet this latest raft of regulatory changes.
All while maintaining a positive attitude and culture towards compliance.
Good luck with that!
I’ve been in Financial Services, specifically the world of Financial Planning, for over 20 years. From RDR to SM&CR, through TCF and MiFID and now Consumer Duty. The regulatory landscape is ever evolving. Throw Covid in there too and yes, I know It’s a cliche, but it does seem that change is our only constant!
And how does that leave us feeling as leaders?
Well speaking for myself and others I know well, it can feel utterly overwhelming.
That was me a few weeks ago. Thinking it was me who was going to need to come up with our Consumer Duty plan. Thinking (wrongly) that it was only me who was going to be able to get this done.
Then came the simple masterstroke from our CEO, Jo. She sent round a great summary document (which you can find here if you’re interested) asking everyone to read it. And she set a date for a meeting to begin to discuss it. That meeting included people from across the whole business. From Administration, Paraplanning and Planning roles to IT systems and Operations.
I saw her email and I sighed. Loudly.
Of course that’s the first step. So simple - how did I not see it?
Because you see, that’s how we do things now. But I had again fallen into the trap of taking responsibility for solving everything. It’s a repeating pattern for me, and something I’m particularly bad at when I’m stressed and not thinking clearly. And nothing’s as likely to stress me out and trigger overwhelm for me than major regulation change!
I don’t think this pattern is unusual - lots of people I speak to seem to fall into a similar trap.
But it really doesn’t work.
Over the last few years, what we’ve seen work much better is exactly the opposite in fact.
Don’t take on all the responsibility and then present solutions! Instead, present the issue to a diverse, cross functional group. The people who will have to implement the solution anyway (and live with the results of your stressed out thinking and decision making!).
Netflix call it “Leading with Context not Control”. It’s a core part of their culture and it works.
Lead with Context not Control
There are two reasons why I think “Context not Control” Leadership works, the first I’ve known for a while, and the second is a more recent revelation!
Firstly, the quality of the thinking that goes into any situation will determine the quality of the solution.
And you will get far better thinking with more heads and more diverse input than you will trying to figure it all out on your own.
Better thinking = Better outcomes
As we have implemented the Thinking Environment at Emery Little over the last few years, we’ve watched that happen time and time again. Better thinking resulting in better solutions, saving countless hours, and thousands (probably tens of thousands) of pounds. Yes, there is an investment of time - providing the context (the issue) to a wider group and having them think really well about it takes longer than doing it all yourself in a darkened room. But it’s definitely a short term investment for a medium and long term gain.
And this collaboration brings an even greater benefit than the better solutions themselves.
It was a realisation I had at our last quarterly team day, as I watched the team celebrate all of the progress that has been made across all areas of the business in just three months.
When groups are provided real context, and then the space in which to think well and collaborate, everyone understands the issue AND the commonality of the end goal. Everyone feels heard and understood, and so, this way of working creates and builds connection.
To each other yes, but just as importantly, to the solutions themselves. And that means real collective effort. Everyone rowing in the same direction, in sync, towards common goals.
And that’s a real game changer.
Clear Context + Real Involvement = Buy in and Momentum
So far, we’ve applied this approach to a major change in our investment proposition, changes in tech, systems and processes, and recruitment challenges.
This is our first try with a major regulatory change, but so far, so good. We’ve found areas that align well with the focus of different areas. The consumer understanding outcome for example, aligns pretty well with Paraplanning, where consumer support could align well with Administration teams.
It already feels much better than the old days - of me and our compliance support trying to come up with proposals that would inevitably be met with groans and resistance!
I remember particularly in the past, feeling demoralised that after all of the hard work to come up with the solutions, it then felt like pushing a massive boulder up a steep hill to get things implemented and adhered to. Simply because a lack of deep level understanding in others meant they were anxious and a bit resistant to change.
With the context not control approach, and a Thinking Environment culture, it has instead become more like a collaborative shaping of that boulder and levelling of the ground. Then everyone getting behind it together and pushing it forwards.
So much easier, much more collaborative and inclusive. And much more fun!
How can we achieve this in practice then? What are the practical steps?
Applying the principles and practices of a Thinking Environment provides an excellent platform. You can find out more about that here, but to start with you could try this:
Provide the context
Present clear information describing the issue that is in front of you all
Rather than putting "Consumer Duty" on the agenda, instead put a question that you would like everyone to think about
“What do you think we could do here?”
isn’t a bad starting point. Or perhaps:
"What opportunities and challenges do you think this presents for us?"
Listen to everyone
Create a sense of equality by asking for everyone to contribute in turn
Make sure you create a space where genuine diversity of thought is encouraged. Invite people to disagree!
Do all of this consistently. Respond positively and enthusiastically to opinions that differ from your own and you can change the culture, reduce the pressure on yourself, and see progress and change (and fun!) across all areas of your business. Yes, even compliance!
I’ve watched it happen. I’ve felt the difference. Time and time again, I’ve been reminded that it works.
I’ve been reminded how simple it is, and yet how easy it is to slip back into those old ways. And how lonely those old ways feel.
The Thinking Environment, together with the concept of Context not Control Leadership have brought so many benefits.
Better solutions, more buy in, time and money saved. But it also relieves stress, reduces overwhelm and makes me and the other leaders in the business feel far more supported.
It really doesn’t have to be lonely at the top.
I’ve seen this work so well at Emery Little that I’m now teaching and supporting other businesses and groups to implement this approach. If you would like to find out more, take a look at my website or get in touch for a chat over a coffee!