I was at a conference last week in Los Angeles for Citywire magazine and they had a speaker, Ben Hammersley, a technologist, journalist, and author based in London, England. Normally I don’t take notes during speaking engagements, but given the fact that such a large part of what I do now involves technology, he had my attention. A lot of what he said resonated with me, so I wanted to share my thoughts on his presentation with my readers.
He had a quote on the projector that seems simple, however, after examination it was extremely powerful:
In this industry, robo-advisors and the like have created a mad scramble of professionals that share the same anxiety-fueled thought: financial advisors and wealth managers will soon be replaced by robots. I personally believe that any redundant or repetitive task should be done with a script to automate the process. If you are not adding value other than completing the task and checking a box, there’s absolutely no reason you should be wasting brain power on it. Instead, they can focus on their clients and important day-to-day activities that utilize their experience. I believe the above quote could also read “Robots don’t steal careers. Robots steal tasks.”
The ‘5 Whys’
Ben then spoke about a concept introduced by Toyota in Japan, called the ‘5 Whys’. I believe this can be used to answer the question above and discover why you’re doing tasks in the first place.
“5 Whys is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem. The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?” Each answer forms the basis of the next question. The “5” in the name derives from an anecdotal observation on the number of iterations needed to resolve the problem.”
I believe many organizations in our industry would find that a good number of the tasks we perform are born from old ways and outdated mindsets. Maybe we should be more like a little kid that repeatedly asks “Why daddy?” or “Why mommy?” Although I’m not a parent, I’m sure that the repetition can actually push a parent to think, “Yeah, good question; why do we do that?” (maybe not out loud, but you get the point).
Break Free of Anchoring
He used this concept to dovetail into another interesting point about the mindset needed to succeed in today’s technology-driven environment with a simple concept: ‘Constant Legacy-Free Reinvention’.
I believe this is the core to many of the issues in our space. Anchoring to past technology and processes is a death nail in a forward-thinking firm. One must cultivate a fresh mindset every day and avoid clinging to the past.
Ben brought up a great story that can help advisors get into the robots-for-tasks mindset using chess as the analogy. He explained that in the 1980’s IBM created a chess-playing computer dubbed Deep Blue that won its first game against Garry Kasparov, a Russian and Croatian chess grandmaster, in 1996. Mr. Hammersley’s point was clear – everyone at that time predicted that this would be the end of chess as we know it. They thought people would lose interest knowing that computers had mastered the game, so why bother? However, the actual effect was quite the opposite. Instead of giving up, the quality and quantity of chess players substantially increased in a short period of time.
Why Did This Occur?
Well, for the chess-playing prodigy in an emerging market country, their abilities no longer plateaued as a result of competing against only local players. These underprivileged chess players now had powerful AI competitors they could play against from the convenience of their home. They even created AI that played to the ability of their opponent and slightly increased in skill as the player improved.
While the global chess world was experiencing a renaissance, local chess clubs faced new challenges. Players were found cheating constantly, as they could simply get up to go to the bathroom during a match and check their phones for optimal moves. The chess clubs wised up and, instead of countering the machines, embraced the change into a new form of chess dubbed ‘Centaur Chess’. Here’s an excerpt from Wikipedia:
“Advanced Chess (sometimes called cyborg chess, centaur chess or Ivanov chess) was first introduced by grandmaster Garry Kasparov, with the objective of a human player and a computer chess program playing as a team against other such pairs.
Many Advanced Chess proponents have stressed that Advanced Chess has merits in:
- increasing the level of play to heights never before seen in chess;
- producing blunder-free games with the qualities and the beauty of both perfect tactical play and highly meaningful strategic plans;
- giving the viewing audience an insight into the thought processes of strong human chess players and strong chess computers, and the combination thereof.”
Ben’s point was that everyone in the professional world should look to become ‘Centaur Chess Players’. As it relates to financial advisors, this means that we should embrace technology to supplement and increase our abilities by offloading redundant tasks to machines. By doing so, we can focus on strengthening our more human features that will never be replaceable by computers. As a side note, I am fascinated that Centaur Chess was first introduced by the same chess grandmaster that IBM’s super computer beat in 1996 for the first time. I think that is the best example of the mindset we should all look to emulate. Think about it: instead of taking the easy route and writing off all technology after Kasparov was beat, he embraced and actually used it to his advantage. This is painful and requires a lot of humility, but is a lesson worth respecting.
Moore’s law states that computers become roughly 2X as powerful from one year to the next. When building technology these days, you must account for the fact that what you are building could be obsolete in a few years. Therefore, the design of your technology stack should be modular with as little captive technology as possible.
Ben ended the presentation with some valuable technology that can be used to streamline your firm’s operations and unload many of your redundant tasks to new technology. For instance, you could use LawGeex for contract review, Amy for appointment and scheduling, and Textio for job description optimization. You can then use a device like Muse™ to optimize your mindset and WHOOP™ to optimize your heart rate and sleep pattern. Now that is a true, real-world example of fusing yourself with technology and becoming a modern-day cyborg (well, close enough).
Again, the point here was to embrace technological change and look forward to removing the monotony from your lives. Many careers and jobs these days have aspects that are never going to be accomplished with technology, so focus on what that is and offload the rest to technology (I know, easier said than done!).