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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 (00:00.142)
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. Imagine this, I'm 80 feet underwater.
off the coast of Australia, diving the Great Barrier Reef. As a PADI-certified master scuba diver and rescue diver, I've logged hundreds of dives over the years. But every now and then you see something that just resets how you think. I'm following the largest octopus I've ever seen, slowly underwater, moving across the reef. No urgency, no wasted motion, just complete awareness. And as this octopus was moving, it changed its color.
instantly seamlessly, it kept blending into whatever was around it, the coral, the rock, the sand, even the fish. In fact, if you weren't paying close attention, you would lose sight of the octopus. It's not reacting late, it's adapting in real time. And I remember thinking that's intelligence at a completely different level. No force, no speed, just awareness and adaptation. And then in December,
of last year, I read this article in the Harvard Business Review, becoming an octopus organization, and I couldn't shake the image. Because most businesses don't look anything like that. The authors made a really interesting point that landed pretty hard. Most organizations today are still built like machines, predictable, controlled, optimized for consistency. And that worked a long time ago, but the world those models were built for is long gone.
Ray Sclafani (01:58.894)
Clients are more informed, expectations are moving way faster. Talent wants ownership, not instructions, and the pace of change doesn't give you time to sit back and plan your next move. Yet, most firms are still trying to operate with rigid structures and processes and layered decision-making, and the result is what the authors call a Tin Man Organization. Slow to move, waiting for direction, struggling to respond when the environment shifts.
And here's the part that bothered me most. After decades of transformation efforts, they cite in their research, only 12 % of businesses actually produce sustained results. That's not a small miss, that's a systemic one. And so here's what really hit me. As I read the article, three ideas stayed with me. The first is the shift from complicated to complex. In a complicated world, you can map everything out. You can build a plan, follow the steps,
and get a predictable result. But a complex world doesn't work that way. It behaves more like the ocean I was diving in, small changes ripple, conditions shift, you don't control it, you respond to it. And if you're leading a firm today, especially in wealth management, you're operating in that kind of environment. Your clients lives are complex, their decisions are emotional, and their expectations evolve at a rapid pace. You just can't script your way through that.
You need people who can think and interpret and respond in the moment. The second idea that stuck with me was this intelligence and where it sits inside organizations and teams. In a lot of firms, decision making still kind of climbs a ladder. Information moves up, decisions come back down, and that lag is where the opportunities die. What the article describes is something very different. The people closest to the client, closest to the problem, have the ability to act.
not recklessly, but with context, clarity and trust. And when that happens, something shifts. People stop feeling like they're executing tasks and start acting like owners, they listen differently, they care more, and they see things earlier. That's where innovation really comes from, not from a strategy session, from the front line. And there's a line in the article that stuck with me, organizations that are deeply focused on creating value for clients.
Ray Sclafani (04:22.112)
are far more likely, in fact, three times as likely to lead in revenue growth and generate meaningfully higher profitability. That doesn't come from a better org chart. It comes from how people think and behave day to day in the trenches. The third idea that stuck with me is one that challenges many leaders. If you take this seriously, your job changes. You're not the person with the answers. You're the person responsible for creating an environment that allows others to take action.
The authors describe leaders stepping back from directing work and focusing on shaping the system instead, removing friction, creating clarity, making ownership visible. And that's uncomfortable for a lot of founders because it requires letting go. But if you don't, everything will still run through you. And that is the ultimate constraint. I keep coming back to that moment underwater. That octopus didn't stop and ask what it should do next.
It didn't wait for direction. didn't freeze when the environment changed. It just sensed and adapted and moved and kept changing color. And every part of it was working together even though each arm could operate independently. That's the model, not control, coordination, not rigidity, fluidity. This article is adapted from the upcoming book, The Octopus Organization. It's written by Jaina Werner and Phil LeBrun.
both of whom are executives in residence of Enterprise Strategy at Amazon Web Services in London. And they advise Fortune 500 exec teams on designing adaptive customer centric organizations. I would consider picking up a copy and ordering the Octopus organization. It's worth your time, especially if you're leading a growing firm that's in hyper growth mode and feeling the strain between how the business was built and what the market is now demanding.
The firms that learn how to adapt inside this environment in real time are the ones that will grow scale and ultimately endure. The rest will keep trying to push harder on systems that were built for a different world. And that, it rarely ends well. With each episode, we introduce a couple of coaching questions to allow you to reflect on the episode itself. So today there's just two. One, as your firm grows over the next three years, where will you need to shift decision making closer to the client?
Ray Sclafani (06:41.72)
so your team can respond in real time instead of waiting for direction. And number two, if you stepped back and redesigned your organization to better adapt to change, what would you stop doing first so your team can take more ownership and think more interdependently? And if you enjoyed today's episode, please be sure to share it with a colleague or a team member that you think might benefit from listening to this episode as well. 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 and article.