Lifewealth is so serious about technology that it has its own digital division. Jason Harwood explains how Lifewealth’s technology strategy reflects its business strategy.
Lifewealth is a Melbourne-based business that has been operating for 22 years. We have $500 million in FUM. We have three divisions: financial advice, accounting/business advisory, and digital.
When I joined the business five years ago, the founder and two shareholders at that stage, wanted me to really drive growth in the business. That was my mandate to come in and take control of the business as CEO.
As part of taking control of the business, I undertook a SWAT analysis to find out what was working well, what were our opportunities, and where were our weaknesses. One of the things that was quite apparent were some of the gaps in our technology. Questions around we could achieve if we had the technology in place to support our people, meant we had to do some work around driving that technology aspect for the business.
We looked at what technology we could use for our financial services business, and there were plenty of good technology options available, like Salesforce and Xplan.
But the turning point for us was about 3.5 years ago, when I had a clearer idea of what I wanted to bring into the business to drive it forward from a technology point-of-view. And at that time, it was a CRM system. But a CRM system that would adapt to our needs, rather than us having to adapt to the software’s requirements. And a CRM system that would allow us to plug in best-of-breed solutions as we moved forward into the future, allowing us to be ahead of the game as a business.
So, at that time 3.5 years ago, we came across a start-up business in Melbourne called Dexterous. We worked with them to find a solution for our business. In fact, we enjoyed working with them so much that we established Lifewealth Digital earlier in 2019, because of the combined values and vision we had for our respective businesses. I’ll talk a little bit more about our relationship with Dexterous later.
Business improvement
So, what’s great about technology? We all get excited by it. Technology can do such amazing things that it’s hard not to be pumped about what the possibilities of technology are. But there are also downsides to using technology, if we don’t plan for it well.
When it comes to business improvement, all businesses are different. They have different requirements, they have different goals and strategies. Every business is different but we’re all trying to improve, become more efficiency and deliver better outcomes for our customers.
However, 70 per cent of all technological change, or digital transformation, initiatives do not reach their goals. A global survey of senior executives in 2018 found that the number one risk they foresaw in their business for 2019 was digital transformation. Why is this the case?
Why does some digital transformation succeed while others fail?
In a world of technology, there has been constant change. I think the vast majority of people do like technology because we have seen how it has benefitted us, both personally and professionally. So, we do excited about the next opportunity that comes along and the ways in which that technology will improve our lives.
While the possibilities of technology are exciting, if you don’t implement and execute it properly, and if you don’t constantly review the technology to ensure it is continuing to meet your goals, then you’re not going to have great outcomes.
Digital transformation also requires having the right mindset, by ensuring you are not playing into the flaws of your organisational practises. So, it’s all about linking your digital transformation to the strategy and vision of your business.
And digital transformation is also about leadership. You need to be clear in communicating to staff and clients about how your technology in a digital transformation is going to link in and deliver outcomes for not only your clients and your business, but also for your team. This is absolutely crucial.
From our experience at Lifewealth, we did this by engaging our people as early as we could and getting their input as part of the overall process. Our team was a major part of delivering on this technological outcome.
Why undertake digital transformation?
I’m a big believer in the power of what your people can achieve. Most people want to be employed and do a job that leads to a greater good. They want to be part of something that matters and feel like they are making a difference in the world.
However, when your people are lost to you as a result of the frustration of working with inadequate technology and systems, it is very hard to get them back. And you won’t get them back through words alone. You need to make meaningful changes within the business that makes their jobs easier.
So, why undertake digital transformation? A big part of this is delivering better outcomes to your people, so they in turn can deliver better outcomes for you.
Vision and mission
At Lifewealth, we were very clear on our mission, our vision and our business strategy. The management team made the decision to spend the time, energy and resources to do a digital transformation. We know we’ve still got a long way to go, and despite the bumps along the way, we’re happy with where we have got to today.
Our mission statement at Lifewealth is: Lifewealth exists to achieve peace of mind and happiness for its clients, people and communities, by understanding what matters most to them.
We genuinely live our mission within the business. However, we still have a long way to go with our vision for the business, but one of our key points is: We have created positive change for our client’s experience through our willingness to innovate.
If you’re not pursuing your vision, then innovating for innovation sake is pointless. Innovating to improve your clients’ and people’s experience is crucial.
At Lifewealth, we’ve had no voluntary turnover of staff in three years. This is important to understand, as it goes hand-in-hand in delivering improved processes and systems for your people, and then having your people in a positive mindset, feeling they are achieving and working towards a greater goal.
By involving and engaging with our people early in our digital transformation, they understood that the changes the business was going through would also benefit them. We are now a fully digital business, with no paper-based files across our accounting and financial advice divisions. And we are almost a fully integrated ecosystem.
One of the keys in our digital transformation was enhancing our internal communications and the way we shared information. We used Facebook Workplace, which is a mobile and web app that aims to keep team members connected. The service offers features like Facebook Groups, Facebook Messenger, built-in audio and video calling, and access to the social network’s profiles, events, and live video tools.
By using Facebook Workplace it has brought our team closer together. We share business and policy updates on there, we use the chat function, which has enabled us to significantly reduce our internal emails. Team members share their life events, like weddings and birthdays.
Linking digital transformation to business strategy
In order to link digital transformation to a business strategy, you need to ask yourself two questions. They are:
1. Are our current systems and processes cable of supporting the business in the pursuit and delivery of its strategy and vision.
If the answer is ‘yes’, then why undertake a digital transformation? Instead, take the opportunity to pursue some smaller tactical wins, like using Facebook Workplace. But, if the answer is ‘no’, then you need to ask yourself the following question:
2. Are we prepared to give up on our ‘why’ in favour of the status quo?
If the answer is ‘yes’, then you probably need to spend some time thinking about your ‘why’! But, if the answer is no’, you need to start thinking about the cost that sits within the business, like technology and systems. Once you understand the real cost, you need to determine whether you can afford not to digitally transform.
Ordering your existing systems and processes is about time cost, staff satisfaction and opportunity cost. When it comes to disengaged staff, there is clearly a severe impact on your business, including its profitability and ongoing value.
We knew disengaged staff wasn’t good for our business, so to address this, we knew we had to improve our technology. The key to this was implementing a CRM system that would adapt to our needs, rather than us having to adapt to the software’s requirements. And we did that by teaming up with Dexterous about 3.5 years ago.
Dexterous is a centralised system and a mobile app, which has provided our business with greater flexibility in how we operate. Advisers can also record their file notes directly into the Dexterous system, which has been great for driving business efficiency.
When it comes to centralised document storage, this is a good example of how the system has adapted to us, rather than us adapting to it. We have some legacy documents stored on SharePoint and OneDrive, as well as document storage within the Dexterous system. However, all of these systems plug into Dexterous, which has been very efficient.
Workflow and task management across Lifewealth’s three divisions is managed through Dexterous. We also have an external stakeholder portal, where clients can upload, for example, their tax receipts. This allows our accountants to directly access this information and receipts, allowing them to complete their work much faster. As our accountants get through the work, the various stages of the workflow get updated, so it becomes a better client experience and we field less phone calls.
Another great thing about teaming up with Dexterous is that we’ve been able to create solutions where we’ve had problems. For example, FoFA was a time-consuming challenge for us to manage.
However, in 2019, in conjunction with Dexterous, we created a system called Ontoma. This is a streamlined solution to managed FoFA compliance requirements and establishing best practice frameworks for delivering regulatory outcomes, while also enhancing the client experience.
By automating our processes, Ontoma has helped to reduce the time-consuming burden of compliance administration. This has been a big win for us.
When you’re talking costs of implementing technology, a system like Dexterous will probably cost a business between $24,000 to $40,000 in upfront configuration costs, with an additional $15,000 to $25,000 per annum to run the system.
It’s worth remembering that there will be distraction if you’re going to undertake a digital transformation of the business in pursuit of your vision. But the reality is, without this digital transformation, you’ve already got distraction in your business in a negative way. However, if you are being distracted towards a better outcome, at least you know that should be finite and you’re actually going to achieve something as a result of it. And this is particularly so if you can engage your staff along the way and they can see the benefits of those changes.
Key points to consider
In summary, there are three key points an advice business should consider as part of their digital transformation. They are:
1. Digital transformation has to be linked to your strategy. It has to underpin the delivery of your mission and it has to drive your business towards its vision.
2. Identify a trusted technology partner. This is not only incredibly important but it has to reflect what we do as advisers. A technology partner has to understand your needs and goals. A technology partner has to deliver solutions and be constantly undertaking regular reviews to ensure your digital transformation is meeting your goals and requirements.
3. The status quo in your business today is costing you far more than you realise.
So, ask yourself, what could your business achieve and what vision could you pursue if the foundations of your firm were built on a loyal, passionate, focused, happy and hard-working group of team members?
Do you have the tools in your business today to support those team members and help them achieve their goals for the business?
Jason Harwood is CEO of Lifewealth Group.