A Sharper Focus on Wealth Management’s Future
By Graig Norden
Since Steve Jobs’ death in 2011, four biographies, three documentaries and three feature films have been released about him. His legend grows and he continues to inspire. Yet, those in the wealth management industry should never read another word about Jobs.
Instead, if advisors really want to prepare for the future and confront the changes they will encounter, it would be prudent to review the career of George M. C. Fisher.
As a reminder, Fisher was the former CEO of Motorola and held a pristine list of corporate credentials before being recruited away to revive one of America’s most cherished brands, Kodak. During his tenure there, Fisher was spared no tool — highly paid strategy consultants, elite investment banks, shrewd lawyers and savvy advertising and PR professionals. He also forged partnerships with the elite tech icons of the time, such as Microsoft and Sun Microsystems. Fisher even brokered a deal with Steve Jobs, who repackaged Kodak’s digital technology into Apple’s QuickTake cameras in 1994. In hindsight, this was an ominous sign.
Later, as Fisher prepared to leave the company in 1999, he sat down with The New York Times. In that interview, he lamented over the negative perceptions of his performance, while defiantly reminding readers that Kodak was poised to have its best financial year in its history.
Perhaps there were aspects of the company that performed better as a result of his tenure. Costs were cut, a focus on photography was reinforced, tough decisions were made. But it was Kodak’s middling digital strategy that was its fatal faux pas. Still, Fisher was obstinate until the end, stating:
“In 1993 no one, not even Bill Gates, understood the impact of the Internet. Still, if you’d asked me then how big Kodak’s digital business would be by now, I’d have said $2 billion, maybe $3 billion. Well, it’s $2.3 billion this year. Maybe my real failure is that I haven’t communicated how powerful our digitization strategy really is.”
The rest of the story, known to most everyone, is the sad history of a firm gallantly fighting on until declaring bankruptcy in 2012.
The mistake Kodak made can be boiled down to one word: incrementalism. The firm tried to have its cake and eat it too by positioning itself as a traditional photography firm that embraced digital technology at arm’s length. That strategy sounded good — bold enough but rational, creative but institutionally sound.
This is relevant because the wealth management industry is littered with those boorishly carrying George Fisher’s torch two decades later. And however easy it is to pick on Kodak for having invented digital photography in the ’70s, many investment professionals seem loathe to self reflect. So it is hardly a case of Shakespeare foreshadowing Lady Macbeth’s death to suggest that those investment advisors who follow Kodak’s strategy will suffer the same fate.
So one final lesson from Steve Jobs?
Don’t be an incrementalist. In his bid to turn Apple around, Jobs broke things and angered investors, clients and protectors of technology’s old guard. He also got big things done, in large part because he ignored conventional wisdom and usually did things in the most definitive way possible. There were mistakes and rough moments for sure, but because he saw the speed at which mobile, cloud technologies and chips were redefining technology, he concluded that there was no time for incrementalism.
Wealth managers have a choice: emulate Steve Jobs or fall on George Fisher’s sword.
We originally published this article in The Financial Revolutionist on January 27.