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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.
Ray Sclafani (00:00.334)
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 Schlaffani and I'll be your host.
So in today's episode, our topic is turning failures into fuel for future planning. When you think of an American success story, it's hard to imagine one more compelling than Abraham Lincoln's journey from a humble log cabin to the White House. But did you know that along the way, Lincoln lost his job, was rejected by the Illinois state legislature, failed in business not once, but twice, and suffered a nervous breakdown?
By the age of 40, he had experienced more failures than most people see in their entire lifetime. Yet Lincoln went on to lead our great nation through one of its darkest periods. How did he build such resilience? He never considered his failures as stop signs. Instead, he saw them as steps forward. Granted, we've all heard the failure is a teacher motivational trope, but this is about more than just learning from mistakes.
It's about creating a process that allows you and your team to turn setbacks into strategic assets, building resilience, evolving, and knowing what to do when, not if, things go wrong. Failure can fuel better decisions, encourage stronger teamwork, and find a strategic and sustainable path forward. It starts with a structured framework that equips your team to extract real value from every setback, big or small.
and emerge stronger and more agile. If you're building an enduring firm, teaching your team to problem solve, make decisions and learn from their mistakes and setbacks is paramount. You have the choice to either accept failure and move on, or you can turn it into a valuable tool that expands your team's collective wisdom and hone their ability to adapt to setbacks. Think about what Lincoln did his entire lifetime. Failures in the advisory world come in all shapes and sizes.
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Sometimes they're relatively small setbacks like a client review that maybe didn't hit the mark. Others are more substantial, like maybe if the SEC shows up and does an audit that just doesn't really work well, or a missed quarterly revenue goal, or strategic partnerships that yield no referrals. No matter the scope and size of the setback, each can serve as a catalyst for future growth when you and your team use the following framework. I'm going to share a simple four-step process
that you can teach your team. First, reflect with radical honesty. To derive value from any failure, you must start by looking at it honestly. What went wrong? What was the lack of preparation for that client meeting or the breakdown in team communication? Reflection about assessing facts without sugarcoating them. Bring your team together and encourage a safe, open dialogue. The goal isn't to blame, it's to clarify.
In his book, What Got You Here Won't Get You There, Marshall Goldsmith notes, the higher you go, the more your success is built on the things you didn't do right. By engaging in honest reflection rather than complacency, you can identify gaps in processes and missing skills essential for continued growth. Okay, step two, identify the core lesson. Every failure holds a tactical and sometimes strategic lesson. For example, a missed
quarterly target might point to flaws in the business model or signal that growth that was estimated was overestimated. The key is pinpointing precisely what didn't work and how it applies to the future. By framing the failure as a learning experience, you shift your team's perspective from discouragement to curiosity. Say you entered into a partnership with a CPA firm expecting reciprocal referrals that never materialized. Now that's never happened, right?
Instead of focusing on the disappointment, explore the why. Was it a misalignment of values, goals, expectations? The lesson here could be as simple as refining criteria for partnership selection, or as complex as reevaluating how you set mutual expectations in all your business relationships. Step three, adjust and adapt. With insights from reflection and core lessons identified, you're ready to adapt.
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This step is where transformation begins, whether you're improving client communication, refining event planning or rethinking strategic partnerships, adjust course confidently by developing a plan that incorporates the lessons learned and setting clear action items to avoid similar pitfalls in the future. In his book, The Hard Thing About Hard Things, Ben Horowitz argues that failure should be a lesson in what not to do, not a mandate for inaction.
The most resilient teams do not avoid failure, but use it to better inform their next move. Step four, reframe and celebrate. Celebrating failure may seem bizarre, but it can be a powerful motivator. Celebrating failure may seem bizarre, but it can be a powerful motivator. When your team accepts that even setbacks are part of the journey, it encourages them to take risks, innovate.
and ultimately become more agile. Reframe failures as accomplishments, not glorifying mistakes, but by recognizing the resilience they build. Marking small wins like a refined client presentation or an improved partnership outcome reinforces your team's ability to turn setbacks into successes. Reframing also builds a cultural mindset that sees failure as progress. Leaders who celebrate these moments send a powerful message.
The message that growth isn't about perfection, but adaptation, grit, and learning from each experience. Okay, so here's an exercise you may find valuable. Now that we've got a simple four step process, let me share with you an exercise that you and your team can do right now. It's extremely actionable. As you look into the year ahead, perhaps the next quarter, or maybe further ahead into the future. As you look ahead into the next quarter,
year or even further into the future, encourage each of your team members to approach planning realistically. Identify not only what's working, but also what's not working with brutal self-awareness. If certain partnerships haven't yielded expected results or a client service approach needs refining, bring all of these into your planning process using each as a lesson for future enhancements. We encourage advisory teams we coach to list their top
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10 failures from the past year. Here's how. Number one, capture everybody's reflections. Ask each team member to create their own version of the list. What are their own individual failures? What are the failures of the overall team? Small, medium and large. Focusing on moments that maybe just didn't go as planned. These can range from problematic client meetings to missed targets or underperforming partnerships. Second, merge everybody's comprehensive list combined
all the individual lists into one and then prioritize this list of failures based upon the insights and growth each failure brought the team. Not the scope of the failure, but the scope of the insight and the learning, the growth that each one brought the team. Then celebrate these learnings. Rename this team list the year's top 10 learnings and celebrate them as valuable stepping stones rather than setbacks. Lastly,
Capture the wisdom. Identify the top 10 insights from these experiences that the team can carry forward. This set of learnings becomes a foundation of wisdom for the upcoming year. I would encourage you to make this exercise an annual tradition. When everyone else is focused on setting new targets and celebrating past successes, well, do it differently. Start by focusing on your failures. Capture the learning. Remember that the journey to success is never linear. True resilience and leadership
are found in embracing failure is inevitable. It's an invaluable part of every firm's journey. This will strengthen your advisors, your team members, foster a culture where everyone learns, adapts, and ultimately thrives together. With each episode, we have a few coaching questions. These are designed for you and your team members, perhaps even your leadership team, to sort of set back after listening to the episode.
and reflecting and learning and growing. So today there are three coaching questions. First, on reflection and resilience. As you think about past setbacks, what specific processes or actions can you establish to ensure that your team draws meaningful lessons and strengthens resilience? And then how can you apply these lessons to anticipate and navigate any future challenges? Second, on adaptation and innovation. Thinking about recent adjustments you've made,
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every good team does. What were the proactive steps that your team took to adapt and evolve your own strategy? How will you encourage each team member to embrace a mindset of continuous improvement and innovation? And lastly, on building a culture of learning. How will you foster a team culture further that views failures as essential steps towards growth? What practices will you implement to celebrate learning moments
reinforcing a mindset that values adaptation and perseverance over perfection. These questions are aimed to cultivate a forward thinking, resilient, and learning focused team environment. Well, thanks for tuning in and that's a wrap. Until next time, this is Ray Sglafani. 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 and article.