61

Matter
Peter Sheahan

First, congratulations for being here. You should never forget
what an unbelievable honor it is to be in this room, but also
take time to reflect on your own work and investment and
energy that got you here. So that’s number one.
Number two, thank you for all you’re about to do for
the Foundation and everything that Pamela Landwirth and
Give Kids the World Village represent. That’s a very difficult
thing to follow, let me tell you, coming up after something
as special and moving as that. The job of my session, though,
is to help take some of the conversations that were happen-
ing yesterday afternoon, some of the conversations that were
happening today, around the changes and the disruption
that we face, and see if we can’t convert that into opportu-
nity to differentiate ourselves to become the obvious choice
in the hearts and minds of the people whom we want to mat-
ter to the most—our clients, our communities, etc.
In order to prepare for MDRT, I decided I would spend
most of my time trying to understand your world. I looked
at the macroeconomic environment all over the world, and
it’s really strong in some parts. You’ve got a lot of people from
China here who are producing 6.3 percent growth; in India,
it’s 6.7 percent. It’s a little different here in North America.
I’d say volatility probably describes the macroenvironment.
On top of that, we have a low interest rate environ-
ment, which obviously poses challenges to risk product and
income-based product. So I moved from that, and I thought,
Well, let me take a look at the legislative environment around
the world. I lost about seven days of my life looking at regula-
tion, after which I thought I might stab myself with a pen.
But whether you are dealing with a fiduciary standard or
new financial reporting standards, we’re all dealing with sort
of increased government intervention and likely increased
compliance costs that go with that.
I moved from that, and I thought, Well, let’s take a look at
demographics, and I started at the intergenerational transfer
of wealth. Did you know that, in some countries, more than
60 percent of the money that transfers from one generation
to the next moves away from its primary advisor toward
another? Let’s add to that the fact that we have a millennial
generation who can’t get to the toilet without telling seven of
their friends. And think about what that does for transpar-
ency and competition in the marketplace.
I’ll move from demographics to technology. Let’s think
about robot advisors. Let’s think about artificial intelligence
and big data and the pricing of risk. I mean, I got to the end
of my prep for MDRT, and I settled on one clear conclusion.
You’re going through just a little bit of change. Would that
be a reasonable statement? And, I know, you’re like, dude,
really? They paid you to come and say that? Actually, yes.
But we’re not going to spend the next 17.5 minutes talk-
ing about what is changing. We’re going to spend it talking
about what we do about it. Specifically, how do you take the
change interruption and create market opportunity?
The first thing you need to do is to do something about
it, if that makes sense. We do this work all over the world,
and I’ve only ever seen three responses to change. Response
number one: Lay in the corner, in the fetal position, suck-
ing your thumb while making small meowing sounds and
hoping all the disruption goes away. Anyone familiar with
that response? I felt a bit that way after Juan Enriquez’s

Peter Sheahan
Sheahan is the founder and CEO of Karrikins Group, is known internationally for his innovative business
thinking and thought leadership. With staff in more than 23 cities across seven countries, he knows
firsthand the challenges of growing a business in these rapidly changing times. Sheahan has advised
leaders from companies as diverse as Apple, Goldman Sachs, Hyundai, Pfizer, and Wells Fargo. He is
the author of seven international titles and has delivered more than 2,500 presentations to people in 20
different countries. He has been named one of the 25 most influential speakers in the world by the National
Speakers Association and is the youngest person ever to be inducted into their industry Hall of Fame.
National Speakers Bureau
c/o Don Jenkins, 14047 West Petronella Drive, Suite 102, Libertyville, IL 60048 USA
email: don@nationalspeakers.com phone: +1 847.281.3568

View this presentation in the Resource Zone at mdrt.org or purchase from mdrtstore.org.

©Million Dollar Round Table Annual Meeting Proceedings | 2017

62 General Sessions: Main Platform
presentation, wondering what on Earth is going to happen
to my life code. Sounds a little bit sexy actually, but we’ll
come back to that later on.
The second response to change is that we come to MDRT.
We go to the Focus Sessions. We interact with our peers, and
we’re now hitting all the right places. But when we get back to
our firms, back to our practices, we sell and we produce and we
advise exactly the same way we did before we got to MDRT.
It’s called the passive-aggressive response. If you’re married,
you’re probably pretty familiar with this behavior as well.
The third response, though, is that the world’s changing,
and I need to do something about it. But here’s the thing. Is it
possible to take all the changes in technology, is it possible to
take all the regulatory change, and actually destroy value in
the market rather than create more? Is that possible? Because
think about how overwhelming the amount of technology
that now presents itself for client service delivery, for pric-
ing risk, for interacting, for marketing. Every week, there’s a
new social media platform. And the question is, how do we
choose what we do about it? And, also, how do we choose
when to do something about it? And that’s the first thing I
want to talk to you about.
When you study companies around the world, and you
look at their ability to respond effectively to change, the first
thing you want to understand is when it is time to move.
Every now and then in my job I get to meet someone whom
I have no right to meet.
I remember once I was in a green room, in Toronto,
Canada, and I met a guy named Dr. Garry Kasparov. He
played chess. He was good. In fact, he was so good, he won
16 world championships and eventually started his own
world championship. By the way, I think that the most suc-
cessful thing he ever did was to challenge Vladimir Putin
in the Russian elections and live to tell the story. But that’s
a story for another day, right? Anyway, I met this guy, and
whenever I meet someone like that, I ask a question. I said
to Dr. Garry Kasparov, “What was the hardest world cham-
pionship you ever had to win?” And I thought he would say
the first or the last. But he said the third. I was like, the
third? That’s such a strange answer. I said, “What do you
mean the third was the hardest one to win?” He said, “The
first one was actually not that difficult. I was 22 years old. I
came out of nowhere. I won 13 games to 11. I played fast. I
played aggressive,” which I thought sounded a little bit like
an oxymoron when describing a game of chess. I said, “Well,
like you moved your pawns really quickly?” He didn’t think
that was very funny either, by the way.
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But he said, “I played fast. I played aggressive. I won. No
one really saw it coming. I came back in year 2, and I won
with exactly the same strategy that I won year 1 with. The
problem was that, when I came back in year 3, everyone
knew how I played. Everyone knew what my likely approach
was going to be. Between year 2 and year 3—you’ve heard
the cliché—I had to not only learn a new way to play chess,
but unlearn an old way as well.” But he said even that wasn’t
the most difficult thing. He said that the hardest thing was
when he was playing his new strategy, when he was experi-
menting with new technology for service delivery, when he
was attempting to, in some way, shape, or form, adapt to the
new opportunity, to engage with clients in a new way. His
version of your kind of changes.
When he was doing that work, he said that he felt like
he was going to lose the game. He would feel pulled back to
playing the way he had played all those years before. And he
discovered in his third world championship that in order to
be great and stay great, you have to be prepared to escape the
gravity of your own success.
And I think it’s a really interesting metaphor and a way to
think about the levels of change and disruption we face. So,
if you’re in Asia-Pacific, perhaps you’re facing the move from
a fairly transactional environment to a highly relational envi-
ronment. If you’re here in North America, you’re probably
facing a shift in the relational environment to an advisory
environment or at least one where a fiduciary standard is part
of that. And we want to sort of delay, delay, delay, and wait
and wait and wait before we start to invest in the technology,
invest in the compliance, which, given the level of uncer-
tainty there is, kind of makes sense. Except the problem is
this: The longer you wait to respond to change, the bigger
the risk you’re likely to have to take to catch up.
It was fascinating to hear Juan’s example, where he asked if
you could name 10 companies within the United States or in
Europe that didn’t exist ten years ago, and then he gave a case
study about Uber, $68 billion. Did you know that that com-
pany turns twelve in October? Most people think it’s only
about three or four years old. But it sat on the periphery of
the market for a long period of time. And it was not a burning
platform. Have you ever heard that saying? Except for the taxi
companies—they saw it coming, saw it coming, saw it com-
ing, saw it coming. Did nothing, did nothing, did nothing,
did nothing, and bam, overnight it gets critical mass. And, all
of a sudden, it fundamentally changed the way we move our-
selves around the world. I know there are equal competitors
in other parts of the world; in China, for instance, there are
©Million Dollar Round Table

all different businesses doing the same thing. But they sit here
on the periphery of an industry, and we do nothing, nothing,
nothing, nothing. And bam, they change.
And, if we wait too long, we have to spend a small fortune
trying to catch up. And so here’s what I would like to encour-
age you to think about. Imagine you have two choices of
responding to disruption. One, you could respond when the
market was strong, when your brand had equity, when your
revenue was growing, when your margins were predictable.
Or you could respond when your revenue was flat, your mar-
gins were squeezed, and you were losing trust and respect
in the marketplace. If you could choose one or two, when
would you rather change? At one or at two? One? Six days a
week and twice on a Sunday. But we don’t do that because
it doesn’t hurt enough. Does that make sense? Because why
would you want to escape the gravity of your own success?
My encouragement to you as you go through MDRT in
the next couple of days, as you hear the case studies, you
hear the examples, you hear the data telling you where the
world is going, is to pay very close attention to what you
hear. Because nothing ever changes in industry that nobody
predicted. And it’s the technology, the regulatory change,
the shifting client relationships, the use of big data. All
these things that you’re going to talk about that are sitting
on the periphery of production, sitting on the periphery of
risk, sitting on the periphery of financial advice—they’re
the things that will not only represent what this business
looks like in ten years, but also represent the opportunity
that’s available to you.
Take regulation. Take a fiduciary standard for those of
you here in the United States. All the fiduciary standard
requires that you do is to get closer to your customers before
you give advice, and then you give them the best advice.
Could you see market opportunity in getting closer to your
customers? When you look at technology, think about com-
pliance costs as it relates to financial reporting, say, in parts
of Asia right now. Can you imagine the role technology
could play for arbitrage and automation and client services,
reducing the cost of face-to-face? It’s an unbelievable oppor-
tunity presented there, but the problem is, we’re going to
wait, wait, wait until it hurts, and then we’re going to try to
play catch-up. So my advice is to move before you need to
move. That’s the first piece of advice.
The second, though, beyond timing, is to get the focus
right. When you stand back and take a look at what’s hap-
pening in financial services right now, I would describe the
trend as the maturing of an industry. Let me explain.
©Million Dollar Round Table
Matter 63
When you study industries that go through change, ulti-
mately, they start in a place we call “Happy Land.” If you
want to know what Happy Land looks like, it’s when you’ve
got strong protections geographically against competition.
It’s when your margins are predictable. Maybe you’ve got long
trail information, whatever that looks like. Life is good. And
then, some piece of technology, a robot advisor or new fidu-
ciary legislation or greater competition, disrupts Happy Land.
And it forces the business models in one of three directions.
Number one, volume. Number two, differentiation, or
what we’ll call a niche. And number three, services.
So let me explain volume. Volume is basically where we
attempt to differentiate, to become the obvious choice, by
being the cheapest possible player. So technology consolida-
tion would be the strategy for that space. Services: You’ve
seen this all over the world in financial services right now,
where we say we’re not going to sell one product, but we’re
going to sell more than one product. Because the most valu-
able asset we’ve got is the relationship with the client, the
relationship with the customer.
The third model is niche, which is, “I’m going to find
something to do better than everybody else.” Quick ques-
tion: What do you think the number one response in most
industries is to this sort of disruption? Where do you think
most of them choose to go? Nowhere. They choose to stay
in the middle where they are neither the cheapest, the best
service offering, nor the most differentiated. What happens
is, we end up trying to be everything to everybody and end
up being absolutely nothing to nobody.
The question is not whether you should jump on every
new piece of technology, because that’s what someone says
you should be tweeting to get new clients. The question is
not: Should you sort of respond to every single thing as soon
as it happens? The question is: How do you intend to win
in the market? Are you going to win a prize? You’re going
to win because you’ve got more to offer. You’re going to win
because you’re better at something than everybody else. And
the willingness to choose and focus and align behind that
choice allows you to say, “New idea, new technology, new
change, new disruption. Is it aligned or misaligned to how
I’m going to win?” Not, “Is it right or wrong, good or bad?”
Is it aligned or misaligned?
Because what happens is, if you stay in Happy Land, it
becomes the land of the boiling frog. Do you remember that
metaphor that says if you throw a frog in hot water, it jumps
out, but if you put it in cold water, it slowly boils it, and you’ll
eventually cook the frog? It’s a slightly masochistic metaphor
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64 General Sessions: Main Platform
for a Monday morning, I know. But we see it in business
all the time. You hear them say things like “Remember the
good old days? Do you remember when you used to make
this margin on that product? Do you remember when I used
to get business just because I was a good member of my
community, and I didn’t have to go out for RFP every third
year?” That’s when you know you’re reminiscing, and you’re
potentially becoming a boiling frog.
My advice to you as you face more change and more dis-
ruption is, if you want to become the obvious choice and
matter more, to get extremely clear on why people should do
business with you and how you’re going to win.
Let me finish with a really powerful example of a brand
that I think did this. I think it represents exactly what we
should be considering, which is orient ourselves toward the
disruption rather than away from it. Because it’s in the dis-
ruption that the opportunity is present. That environment
you see behind my slides is the Burberry flagship store in
London, England. [visual] Now, when Angela Ahrendts,
who was the creative director at Donna Karan New York,
took over at Burberry, she was asked this question by a finan-
cial analyst: “Who’s Burberry’s number one competitor?” He
thought she would say Coach or Louis Vuitton or Gucci. She
said, “No, no, it’s Burberry online. It’s the ability to buy what
I’m selling to you face-to-face in a bricks-and-mortar store
on the Internet for 25 percent less than I’m selling it for in-
store.” Can anyone relate to this competitive challenge? Ride
the disruption in the channel, direct to consumer. We’re see-
ing it all over the world, right? She said, “I have two choices.
I could reduce my price or increase my value.” And then she
said, “I’m going to increase my value, which means I have
to make walking into the Burberry store feel like it’s at least
worth 25 percent of the underlying value of the products.”
So here’s what they did. At the first prototype of the store,
on Regent Street in London, video cameras would film you,
as you walked out, and do facial recognition. So, as you’re
walking, she knows you’re in the city. Freaky and illegal, so
thankfully that never made it into the store.
But what did is field communications technology. So when
you walk into the Burberry’s Regent Street store in London,
it tags you if you’re wearing a Burberry garment. And so it
knows you’ve entered the store. It takes that information,
sends it to the cloud, the CRM system, which then sends it
down to the handheld devices of everyone who is serving you
today everything you’ve ever bought from Burberry in your
life. It says whether you bought an umbrella in São Paulo the
week before, or a belt in Sidney, and then they can begin to
Annual Meeting Proceedings | 2017
offer advice. Because they take everything you bought and
compare it to everything everybody else has bought like you,
and—wait for it—they scrape your Twitter feed and they
scrape your Pinterest feed as well, and they begin to make
product recommendations based on not just people like you,
but on the things that you like.
They then cross-reference that recommendation to the
enterprise resource planning system, the inventory system, and
they only make recommendations for products that they have
in-store or could have at your door within 24 hours. They go
one step further. If you go back to that slide, you’ll notice that
in the center here is a 60-foot screen. [visual] On that 60-foot
screen, they show catwalk footage live, meaning it’s running
live. And it’s showing you footage of not just the things you
would like, but the cumulative buying preferences of everybody
in the store in real time, things that they are most likely to like.
You guys are impressed by that. Wait, I’m not even fin-
ished. Those mirrors that you see up on the outside on the
top—these little mirrors all around the store? Those mir-
rors double as flat screen televisions, and when you pull off a
raincoat, a trench coat, from this coat hanger, it triggers the
two screens closest to you. And the first screen shows you the
artisan making the jacket. Because if you’re going to spend
$2,500 on a raincoat, you’d better have a really good excuse
for making that purchase. It goes one step further and then
says, on the next one that, by the way, this belt, these shoes,
and that hat would look beautiful with that jacket.
Now, what’s really interesting is that when Angela
Ahrendts was asked the question, the number one thing she
said they learned from that store was not that they could
make money with that level of intensity of capital invest-
ment. It was an expensive thing to do. She said, “What we
learned was that customers no longer want to be treated as
market segments. They really want to be treated as segments
of one. And that we were all fearful of the Internet and tech-
nology and what it represented to our business, and then
we found out that by moving toward the very technology,
moving toward the very thing that threatened us, we found
opportunities to create world-class, in-store, face-to-face
experiences using exactly the thing that we were losing to on
the web, which was segmentation and accuracy and recom-
mendations and all the things that were working there.”
She said, “I want to make walking into a Burberry store
feel like you’re walking into a website.” And in the five years
that followed the beginning of that journey, of moving
toward not just technology but, in their case, to the millen-
nial consumer as well, that everyone was sort of afraid of it
©Million Dollar Round Table

and moved straight at it. It created brands, value proposi-
tions, products that trend, and they tripled the enterprise
value of Burberry in about a 48-month period.
And they did it for three reasons. Number one, they
moved before they needed to move, meaning they could
have sat on their bricks-and-mortar strategy and done busi-
ness the same way they’ve always done it and fallen victim to
their own success. But instead of waiting for a burning plat-
form when the disruption hurt, they moved early. They took
smart, intelligent risks to begin to learn how new technology
could change the environment.
Two, they only invested in the technology that supported
how they’re intending to win. They didn’t want to reduce
©Million Dollar Round Table
Matter 65
costs; they only wanted to create value. They wanted to be
a niche player. So they made a decision to move toward a
niche instead of getting stuck in the middle where they were
nothing to anybody or basically average. And they became
world-class at the in-store experience.
And, three, they oriented themselves toward the very
things that disrupted them. They moved there, learned
there, refined, and repeated over and over again. And that’s
the recipe to taking disruption and turning it into market
opportunity. Move before you need to move so that you can
take small risks. Focus and align time on what you intend
to do to win. And orient yourself toward the very thing that
disturbs you and disrupts you.
Annual Meeting Proceedings | 2017