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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
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Welcome to Building the Billion Dollar Business, the podcast where we dive deep into the strategies, insights and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics and mindset shifts that set the top 1 % apart from the rest. I'm Ray Sclafani, and I'll be your host.
Nine ways to leverage the Pygmalion Effect, driving greater organizational success and raising the bar for clients. What is this Pygmalion Effect? Well, simply put, it's setting high standards for your team. It's crucial in building a client -focused firm, helping foster the interdependent team that consistently achieves excellence for clients. And it's not solely about achieving excellence, it's also about creating a culture that thrives on growth,
innovation and superior client service. You know, as a firm owner, you have a unique opportunity, a front row seat to shape the culture of your business and drive its success by establishing and maintaining high standards. Understanding the Pygmalion Effect, particularly through the lens of a study from 2000 called the McNatt study and insights from the Harvard Business Review provides valuable insights into how expectations drive high performing teams. So the Pygmalion Effect,
Also known as the Rosenthal effect is a psychological phenomenon in which higher expectations lead to improved performance. Named after the Greek myth of Pygmalion, this concept was first demonstrated in a classroom setting by Robert Rosenthal and Lenore Jacobson in 1968. Students who were expected to perform better by their teachers showed significantly greater academic improvement. Simply put, a leader's expectations
can dramatically impact the performance of team members. So when you believe in your team's potential and set high expectations, it creates this self -fulfilling prophecy where employees rise up to meet these expectations. In fact, in a seminal article called Pygmalion in Management by J. Sterling Livingston, which was published in the Harvard Business Review, first in 1969, it delves deeper into this effect, explaining how
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managerial expectations shape employee performance. More recently in 2000, a comprehensive meta -analysis exploring the Pygmalion effect in organizational settings was conducted and the analysis consolidated findings from numerous studies on managerial expectations and employees confirming this clear positive correlation between high managerial expectations and improved employee outcomes.
So as we coach high performing financial advisory teams, I start thinking about what are the benefits of setting high standards? So I asked a number of advisors who are leading billion dollar firms, hey, how does this Pygmalion effect impact and transform and strengthen your advisory business? And here's what they told me. First, it enhances performance by motivating team members and advisors to exceed basic expectations, which leads to better client outcomes, stronger asset flows,
and a culture of growth. Another advisor said to me, by setting high standards of excellence, it increases client satisfaction when advisors go above and beyond in delivering not only top -notch service, but top -notch advice that fosters greater trust and loyalty. Somebody else said to me, by setting these high standards, professional development is amplified, encouraging continuous learning and professional growth.
In fact, instead of chasing team members down to take classes and certifications and credentials, team members and advisors take their own lead and want to be at the forefront of industry trends and best practices. I've also observed myself as a business coach that when you set high standards, it signals a commitment to excellence and attracts like -minded professionals to your firm.
So in this arms race for talent, where you're seeking to attract and retain top talent, setting high standards and a high bar of excellence already creates this magnetic effect about your own firm. The other benefit that I see, especially in the world of financial advising, which is complicated and complex, you're always looking for team members who are good adapters, who are innovators. And by setting high standards, you foster this way of thinking, this out of the box thinking.
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that team members are excited to solve complex client challenges and solve problems in a way that's truly collaborative. So there are some real world applications and I wanted to provide you nine simple tips. If you're thinking about your firm's culture and you want to improve overall performance, you want to strengthen client satisfaction, build deeper relationships multi -generationally, I think these nine tips might be helpful for you to think about. First and foremost,
Lead by example, demonstrating the behavior and work ethic you expect from your team elevates everybody to play a bigger game. Your commitment to high standards sets the tone for the entire team. Second, set clear and achievable OKRs. These are objectives and key results. They're a goal setting framework first introduced by John Doer in his book, Measure What Matters.
Objectives define what you want to achieve and key results represent specific measurable outcomes that indicate whether you're on track to achieving each objective. Third, communicate expectations clearly for each role and set of responsibilities. What is meeting expectations? What is exceeding expectations? What is far exceeding expectations? And what is not meeting expectations?
by quartiling expectations in your firm for each role and set of responsibilities ensures your team understands the high standards you're setting and reinforces expectations through regular communication and feedback. Fourth, encouraging ongoing training and development. High performers, high performing teams learn together and investing in others is the sign of great leadership. Investing in continuous learning opportunities for your advisors and team members
High standards require up -to -date knowledge and skills, so fund access to these designations and certifications, workshops, and seminars. Fifth, foster a supportive environment, encouraging collaboration and support among team members. A positive workplace culture helps team members and advisors feel valued and motivated to meet high expectations. Number six, recognize and reward excellence. In another episode, I'll talk about
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this notion of gamification, but acknowledging and recognizing rewarding team members and advisors who meet, exceed, and far exceed standards of excellence creates a powerful motivating environment and reinforces the importance of striving for excellence. Number seven, use constructive feedback. Regular constructive feedback helps every team member improve. It also creates a culture where that's expected.
Focus on specific behaviors and outcomes, specific examples, offering guidance on achieving high performance levels. Oftentimes you'll notice high performers have a high sense of self -awareness and will already know about what they need to shift and change and improve. By the way, check out, there's a tool on the ClientWise eXchange™ called Giving Feedback and Advice From a Collaborative Perspective™. If you're a financial advisor listening to this podcast,
there is a complimentary membership waiting for you at the ClientWise eXchange™. Check out exchange .clientwise .com. For everybody else, there's a valuable tool we coach using high performing teams called Giving Feedback and Advice From a Collaborative Perspective™. And you'll find a link to that in the show notes. Number eight, encourage innovation and risk taking. High standards often require innovative approaches and a willingness to take calculated risks.
Encourage team members to think creatively and explore new ideas. then lastly, monitor and adjust. It's all about continuously learning, monitoring the effectiveness of your high standards, and then adjust them as needed. Flexibility will ensure standards remain relevant and achievable. Even implementing one or two of these initiatives can produce demonstrable results. We've seen recently a mid -sized wealth advising firm
seeking to expand its development of its lead advisor team set high expectations for ongoing education and professional development. They did this by simply implementing a rigorous training program. Client satisfaction and retention quickly began to climb in addition to referrals and introductions, which is launching a new organic growth strategy. All of this thanks to advisors simply becoming more confident in their knowledge.
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and skills in generating better client interactions and outcomes. Similarly, setting a standard that all financial planners within your firm achieve the coveted certified financial planner CFP designation has been shown to significantly enhance a financial advisor's career success, generating about 14 to 33 % more income than non -CFP advisors and earning 12 % higher compensation than their peers.
Setting high expectations and high standards is a strategic decision. It can drive exceptional performance and greater client satisfaction. By leveraging this Pygmalion effect, you can create a culture where high expectations directly impact the firm's high performance. Implementing the practical tips outlined will actually help you establish and maintain these standards. So listen back to this episode. It's simple, it's straightforward, and there's a lot of content.
Hopefully this ensures that your business remains competitive. Embrace the power of expectations and then watch your team, your firm thrive. For more insights and strategies on empowering your wealth advising team members, visit the blog at ClientWise and join in on the conversation. By design, each of these episodes has a series of coaching questions. And my hope is that you and your leadership team take 12 to 15 minutes out on a weekly basis and
listen to the episode and then maybe begin to answer a couple of these questions. Pick out one or two of these coaching questions and decide as a group how you can improve your firm. This idea of Kaizen, which is a constant state of improvement, even incremental improvement on a week by week basis can be incredibly powerful. So the first coaching question is simple. What can your firm do next to expand its culture of striving for growth, innovation and superior client service?
In this episode, I outlined nine specific elements, real world applications that can help you raise the bar on client satisfaction by setting higher expectations. So maybe ask the leadership team to give a score on a scale of one to five. How well is the team today? How is each individual today executing in each of these nine areas? Second question, how can setting high standards within your wealth advising firm evolve?
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in order to meet the changing expectations of clients over the next five years. After all, we're about to see the beginning of the greatest wealth transfer in recorded history in this country. In other words, the boats are beginning to rise as the tide is rising and are you gonna capture your fair share of marketplace? So think about these high standards and how the marketplace is evolving and how you're expanding and elevating client service. Third.
How can you further develop and refine the use of OKRs, these objectives and key results to continuously drive innovation and excellence within the team? Number four, how do you envision the Pygmalion effect influencing your firm's culture and performance as the financial landscape evolves? A simple question. I'd be very curious to ask your team how they would describe what a high performing team looks like.
and whether they're meeting or exceeding or far exceeding their own definition of high performance. Number five, what strategies can be implemented to ensure that your firm's supportive and collaborative environment grows stronger, fostering even greater interdependence among team members for sustained client success? Well, thanks for tuning in and that's a wrap. Until next time, this is Ray Sclafani. Keep building, growing and striving for greatness, together.
we'll redefine what's possible in the world of wealth management. Be sure to check back for our latest episode in article.
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