Source: Goldman Sachs
Social media’s digitized encounters often strip away the subtleties of old-fashioned human interaction, leaving many people feeling disconnected in a supposedly connected age. “There’s a lot of difference between listening and hearing,” G.K. Chesterton once said. Today we are at risk of failing even to listen, much less to hear in any meaningful way.
A number of research studies support the view that modern technology habits have led to a decline in communication skills. In The Face-to-Face Book: Why Real Relationships Rule in a Digital Marketplace, consultants Ed Keller and Brad Fay explain how conversations in person can be much more powerful than those online. Keller and Fay estimate that perhaps 90% of our influential conversations take place offline, while only 8% are online. As they explain: “Social media is big and growing, but it is still dwarfed by the analog world in which people live and interact.”
Part of this phenomenon can be explained by the intrinsically physical nature and origins of human communication. Language was not built for ones and zeros; it emerged in close quarters and is powered by more than written symbols. As much as 93% of communication is conveyed by body language and tone of voice, by some estimates, with just 7% left over for the spoken or written (or texted) word.1 We’ve all seen this in person. “I’m fine” could mean a friend is not fine at all. “Yes, I’m in” could easily mean “I don’t like this deal and I’m walking away.”
What can investment professionals do to repair the steady erosion of interpersonal communication around us? The practice we advocate for those in financial services looking for a road to better communication is called “active listening,” meaning devoting one’s full attentive capacity to one’s conversation partner.
Learning to be an active listener
Investors are bombarded daily with digital information. They’re ‘spoken at’ constantly on screen and on line. But when are they really listened to? Mastering listening skills amidst all of this noise in our view is becoming a key differentiator and a powerful tool that can provide a competitive advantage.
Listening in an active way was a difficult skill to perfect even before the rise of social media. Our ability to devote full attention typically drops within the initial 30 seconds of a conversation (Exhibit 1). We then try to recover once we are aware that our attention has dropped. But it never regains the initial level. Little wonder: Our thoughts travel significantly faster than our speech.
EXHIBIT 1: ACTIVE LISTENING IS SOMETHING YOU DO, NOT SOMETHING THAT JUST HAPPENS
Source: Goldman Sachs Asset Management, Castleberry, Stephen B., Shepherd, C. David, and Ridnour, Rick, Effective Interpersonal Listening and the Personal Selling Environment, 1999. For Illustrative Purposes Only.
Taking careful stock of a person’s spoken and unspoken meaning puts you above the minute-by-minute bombardment with digital information. Active listening removes the interaction from the many scenarios in which people are “spoken at” on screens and on their smartphones.
As the definition suggests, active listening is something you do, not something that just happens. Here are the key habits we’ve observed in top advisors and financial professionals around the world with whom we’ve worked:
Staying engaged in the conversation. Asking the right questions is called “profiling with a purpose.” Use open-ended questions to deepen your understanding of the client’s viewpoint. Use more specific (or “closed”) questions to acquire more detailed information and/or to move from conversation about investments to your recommended actions. Ask confirming questions to make sure you understand and to demonstrate your understanding to the client.
Being alert to visual cues. As described above, body language, tone of voice and contextual clues can be more important than spoken or written words. Does your client warm to discussions of one topic but shrink from another? The telltale signs are often visual in nature.
Self awareness. Active listening requires social intelligence, especially the ability to understand how others perceive you in the moment. Maintain eye contact and avoid distractions such as mobile phones. Don’t interrupt – summarize what was just said as you take notes and acknowledge the views you are hearing.
Welcoming silence. Being an active listener is as much about building trust as the given discussion topics. Silence leaves room for the client to raise issues. It reaffirms that he/she is the focus. It helps ensure he/she is not left with a feeling of being “spoken at.”
Advisers and business people who hone these skills are the ones we think will stand out in the years to come.
