There is a fairly simple process to obtain a qualification, even if it’s a painful one. But experience is often much harder to acquire.
Many business owners would love to bring their employees up through the business and promote them all the way up to board positions. However, the big jobs are not just a test of technical competence or factual knowledge.
Instead, they are often a test of temperament, resilience and fine judgement - qualities that are built over time after having been in a range of comparable situations.
Experience is not the same as age or time spent in the job. It’s the well from which we draw when complex or difficult scenarios present themselves.
So how do you give someone relevant experience for a role they’ve never had before? I have a couple of suggestions, and I’m sure you will have more examples of your own.
1. Scenario Testing
Shadowing a director is often cited as a useful way of gaining experience, but it doesn’t always give a person exposure to those critical moments when an experienced director must draw on experience.
Watching someone else cope with a situation isn’t really a test of how the observer would react themselves when faced with the same scenario.
Something I’ve seen firms do successfully is set up test scenarios, where succession teams are given a crisis to manage. This might seem a little artificial, but it can work well and allow the experienced director to do the observing and feed back appropriately.
It can also cover off a number of tests which many firms will undertake anyway, such as disaster recovery.
2. Have the Information, not the Answer
Financial advisers, like other professionals, are heavily solution-orientated. It’s easy to think you can plan for every scenario, and we often formulate an answer halfway through a question.
But something I’ve stressed to various developing management teams is that you don’t know what problem you’ll have to deal with in the future. Most of us couldn’t have foreseen the credit crunch or the Covid pandemic, for instance.
The next great crisis will be, by its very nature, completely unexpected and unpredictable. So how do you prepare for the unknown?
The best you can do, as a management team, is to ensure that you have all the information you think you might need at your fingertips. You know you’ll need to make adjustments to your financials, to how clients are supported, to resources, and much more besides.
Obviously, thrashing around for days because you didn’t have the information to hand to make a decision is not setting yourself up for future success.
The sort of management information Consumer Duty is forcing on us all is useful, but we should go further. Great management is ultimately about making great decisions. Some critical decisions will be made under significant pressure.
Experience is one thing which will improve your chances of making the right choices, but really good, instantly available management information can be of equal importance, and prevent decisions being based simply on a gut feeling.
Data and management information is undergoing a revolution. We haven’t seen the full potential of machine learning yet, but our expectations are already well in excess of where they were 10 years ago. We want to be able to view live data, changing in real time 24/7. We’ve already seen how financial information has been transformed by online systems such as Xero.
If I have one message to give to future business leaders, it’s this: try to experience a crisis rather than observe it.
Assess what information you were missing when you needed it most. Demand that information and more at your fingertips every day so you can be ready for the next problem.
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