Inverted thinking is a way to view your world in a new light and can be very useful to financial advisors trying to reach success.
Let’s first understand the concept better. During World War II, many Allied Forces planes were shot down and, in 1943, the English Air Ministry began to investigate the problem. As they did not have access to the planes that had been shot down, they had to focus their attention on the planes that had returned. An examination of the returning planes showed widespread damage, especially in the extremities. One solution was to reinforce these areas to better withstand the anti-aircraft fire. However, a mathematician they consulted, Abraham Wald, noticed small, but consistent, core areas where the planes had less damage. This led him to a startling and quite opposite conclusion: the solution was not to reinforce the areas where damage was visible. Those planes made it back despite their damage. It was more likely that the lost planes were struck in vulnerable areas that did not show up on the returned planes. Wald recommended reinforcing these areas, specifically the engines. He worked backwards to find a solution and his recommendations contributed greatly to the ultimate victory in the war effort.
This way of ‘inverted’ thinking was the subject of a famous 1986 commencement speech that Charlie Munger gave to Harvard Business School graduates. Titled “Invert, Always Invert,” Munger’s advice was very simple: avoid the things that lead to misery and you will greatly enhance your chances of happiness.
With that concept in mind, here are three key mistakes financial professionals should avoid to clear the path to success.
1. Complicating matters
“Simplicity is the ultimate sophistication”. Leonardo de Vinci’s timeless words ring true today. When presenting to clients, are financial advisors addressing the core issues that matter to clients or are they overcomplicating things? They now have access to literally thousands of products and strategies. Their success, and that of their clients, relies less on the array and complexity of available solutions. Rather, a tailored, clearly presented and regularly monitored strategy is much more likely to yield results for all involved. When preparing a presentation, ask yourself: is every slide in this deck absolutely necessary? Less is frequently more.
2. Veering from the game plan
My wife leaves early for work, so I usually get my six-year-old daughter up and ready for school. I often find myself confiscating a smuggled toy panda or encouraging a sense of urgency where none seems apparent. Similar to my daughter’s morning distractions, we can all struggle to focus and stay on track. Is your journey to success plagued with diversions and digressions? Did you complete the rigorous calling schedule you committed to today? Are you incorporating financial planning into every meeting? Your plan is certain to bear fruit – if you stick to it. Remove the distractions and stick to your game plan.
3. Focusing on the outcome rather than process
Our ability to conceptualize is a wonderful gift. The human capacity to understand cause and effect, to look into the future and plan for a desired outcome has helped shaped our history. Unfortunately, this attribute is not without its downside. Too often, we vacillate between past regrets and future worries and ignore what is right in front of us. The spiritual teacher, Eckhart Tolle, famously points out that mentally you can only deal with something that is happening right now. The past has gone and the future never arrives. Focusing on an outcome creates an anxiety gap that becomes counterproductive: your future goals can be compromised by your focus on them. Tomorrow is shaped by what you do today. Set your goals, carve out a realistic plan to achieve them and work on it. Today.
The path to success may thus be more simple and evident than you had ever imagined. To invert our original inversion, perhaps the three mistakes to avoid could be summarized with three attributes to embrace:
Turn your world upside down. You may be surprised at what you see.