Have you heard of the Echo Chamber Principle?
It seems people are no longer open to opposing views.
They rarely change their minds about anything. And that includes the sceptical trustee at the conference, flicking through your latest marketing deck.
What happened?
Social media algorithms locked people of all stripes in their very own echo chambers. This has created a mindset that touches all aspects of our lives, including work.
What does this mean for fund managers?
This wasn’t always the case. Humans (we include investors in that grouping…) were once more open to new ideas and challenges. The “problem --- solution” structure was highly effective.
But that is no longer the case – and it means you should consider rethinking your approach.
Avoid telling investors they got it wrong – or that they have a problem.
You need to get investors to drop their defences before they can absorb your argument. A less aggressive communication style will help.
How should you introduce investors to new ideas?
- Start your marketing deck with a big change – and give it a name if you can
Not a problem. Not a better solution than the one the investor already has. A big change that is happening in the world right now. Perhaps no one could have predicted this change was coming, but it’s pregnant with possibility. - “You used to do things in a certain way - and that was logical”
Investors are human. That means they act like humans...
Treat them, and their past decisions with respect. Nobody wants to spend time with people that ridicule them. So, no investor wants to engage with a manager who does the same.
For example, what happened the last time you told someone their politics or religion were wrong? What about their taste in music?
I doubt it opened up a considered, meaningful dialogue. More likely, the shutters came down, arms were crossed, and relationships were damaged. - Show them there will be winners and losers
Humans need motivation to change their stance – so give them that. Explain how the greatest risk lies in standing still. There will be winners and losers, and you don’t want them to be on the wrong side of that line. - Now you can present yourself as their guide to the promised land
If they stick with you, they can be a winner too. Explain what this change means and give evidence that you have the tools to help them benefit from it.
Don’t worry, we’ve been helping managers like you with these types of communication challenges for over a decade. And we’ll explain how to present your “promised land” and guide your investors there in a future article.
Believe me, this strategy works
It probably just did:.
- We presented a big change and gave it a name: “The Echo Chamber Principle” (because of social media, people are less open to opposing views).
- We told you that the way you were doing things was understandable – it’s people who have changed. Your approach was rational and valid.
- We told you there would be winners and losers.
- We told you we were your partner in navigating this change – hopefully, this made you more receptive to our solution.
But – and I am sorry about this – our change isn’t 100% real.
The truth is that investors haven’t really changed at all. Regardless of social media or any other phenomenon, no one likes being told they are wrong. The shutters come down and they stop listening.
Asset managers have rarely been great at navigating this reality.
Why not be one of the exceptions?...
It can work for you
The changes happening in markets around the world are real. And too many investors are happy with the status quo.
Follow the four steps and investors are more likely to drop their defences and follow you into the unknown. What might have been an uncomfortable challenge to their world view is suddenly a new promised land with you as their guide.
In conclusion
Stop identifying problems, start naming changes. Stop telling investors they’re wrong, start being a new partner.
And, yes, the irony is not lost on me.
I am telling you that you’re wrong.
But I know you can take it.
Reach out if you want to discuss how you can navigate this change.
