“Logical” is a term that could have easily been coined for those of us who work at the core of financial technology systems. Our mission has been to create IT that can stand up to intense use under demanding conditions, so what you do is wrap yourself in this idea of proceeding with what is logical.
Something is beginning to stir though. Change in financial markets has never been as quick and as complex as it is now.
Regulation, digitalisation and consumer driven change is creating a new type of challenge for providers of financial services. Whilst these challenges require deep technical knowledge and logic we are finding they require something much more complex, a new culture.
As an institutional asset management firm the “purity” of logic is taken for granted. But over the past, say, three years we realised we needed a new culture that was nimbler and quicker and was more adapted to changing demands in the marketplace, including regulations.
At Source ETF we wondered if the new culture would be less about spreadsheets and powerpoints and more about creating and articulating stories. Stories and large scale financial systems…. It seems something of a contradiction.
We have just started with this idea but the results are already starting to fundamentally change the way we think and work together, as well as our operations. It is also a lot more fun.
Our take on stories
Every company has its own story. You will get a better sense of a company from the stories of its employees and clients than you will from the pure logic embodied in financial statements, forecasts and spreadsheets.
Pure logic often remains the go-to method for articulating the history and direction of a business. However, it is not always the most effective in execution.
As a CTO I am used to dealing with logic. There have been many times in the past where, after pitching a strategy to a senior management team, I am left deflated because they don’t “get it”. That’s especially true when I am trying to communicate something new and complex.
My reaction (and I’m sure I am not alone here ) is often – “how can they not understand something so logical?”.
The reason is actually quite simple. I will pitch strategy to them after weeks and months or investigation, testing and submersion in a subject.
It’s unrealistic to expect the beautifully constructed pure logic, that I’ve had weeks to work on, to instantly convince a group of people. Yet we try to do this again and again and we end up frustrated.
There is a tough moment for leaders when they face this uncomfortable truth. The responsibility for a lack of action on change often lies with our failings. Our failure to communicate. In effect, what we create are blank spaces instead of knowledge.
When we began to realise this we looked around for ways to improve how we communicate and motivate change. It needs something of a philosophical turn to ask deep questions about these problems. Suddenly you are dealing with culture rather than logic, emotion, understanding and empathy.
So how did early man deal with some of these blank spaces I just referred to?
The answer is that most early communication was based on the power of stories and metaphor to create connection and emotion between the leaders and the rest of the tribe.
We have continued to rely on story and metaphor at critical moments in modern society.
Look at JFK’s famous 1962 speech “we choose to go to the moon”. Ultimately he was asking the American people to fund the space race at all cost. There were no numbers or dates in that speech but it was a fantastically delivered and colourful science fiction story that captured a generation’s imagination.
As we questioned how to get people on board with change at our company we recognised 4 key elements that make stories so powerful in organisation change:
- Many aspects of what we demand of people when we ask for change are actually made up of these blank spaces. That is, the change journey is full of unknowns and you, the boss, are asking these people to take a bet on it. Stories fill in some of those blanks by relying on or stimulating the imagination.
- They help simplify complex details.
- Stories help you deepen relationships between people and the change journey. “Digital transformation” is an example of logic at work. We know that work processes must become more digital. However, it is very complex and creates pain for people. It represents an ill defined but huge change that is difficult to grasp. By contrast humans understand and are familiar with story telling, imagery, metaphor and outcomes.
- Stories make complex ideas transportable – other people can convey and propagate the essence of your big ideas quickly, effectively and emotionally. Simply put, in an organisation if I can believe and tell a story then I can back it.
Stories are full of emotion and values that motivate people in ways that pure logic does not. But the strange thing is they also have to be very tangible.
Stories need outcomes. There is a theory that stories should be open ended and just let the journey unfold. But we have found that outcomes are very important very early on.
Our company was founded in 2008 a time of change in financial markets as significant and fundamental as the great depression. We needed to innovate to survive and over 8 years we are well known as the guys pushing new ideas to the market. But like all companies it’s hard to maintain that energy level over that period of time. In early 2016 we realised this and decided we needed to reinvigorate the culture and mindset that built our reputation.
A small group of us created a narrative and story line which heavily borrowed from the history and culture of the Mongol hordes.
Adopting their story line and making it our own we used this narrative to create a new operating methodology and rhythm. We were also pretty lucky in so much as we decided to roll the social collaboration tool slack! At the same time, which we integrated into our story line (it was our steppe pony).
In short we decided we were going to go forward and Genghis’s mantra “ If you’re afraid – don’t do it. If you’re doing it – don’t be afraid!”
Did it work?
Well we have been at it for 6 months and a huge amount has changed. The visible things for us is less emails, less meetings. Decision making and sharing is in real time and using more of a crowd approach. We’ve quickly adopted and launched new ideas.
We launched a social client engagement campaign for the first time this summer, leveraging the hype around Pokémon go! with a black cab advertising campaign. We encouraged clients to use their smartphones to take pictures of cabs carrying our ads for the chance of winning a troy ounce of gold. No senior manager was involved but all the necessary checks and balances were performed internally.
We had been thinking about social media for years but something in our culture changed and everything became easier. From idea to execution it took us two weeks.
On the morning after the US election our Slack traffic spiked by 25%. Everyone was talking about what had happened and what had changed. Real time threads started to form between our market experts and investor teams and we quickly realised one of our products had just become hot.
On that day we created a narrative for why the Biotech product was interesting for our investors and got it out the door within hours . Within 10 days we had trebled the funds’ assets from its historic highs to $500mio.
As I said earlier, we are fairly new to this. We realised we had to switch from pure logic to a combination of those traditional sector virtues and stories. In fact of course story is an older way of working, brought up to date with social collaboration tools. These are allowing us to add to our culture and to change the way we work, improve the flow of ideas and the speed of execution.
So now story is part of the story of our company and the way we act. The story is not complete and continues to evolve. And we will create new stories to help us adapt for the challenges of the future. Sometimes the old ways are the best.