Tuesday Email: The Gap Between Knowing and Doing

Happy Tuesday!

Every Tuesday I'd like to offer strategies for the week ahead and a thought to fuel your action.

I walked past an Amazon box in my entryway at least a dozen times.

Seven steps, that's all it would take to carry it to the blue recycling bin outside.

Seven steps.

I'm not a lazy person. I help run a firm with over 100 employees. But that box just sat there.

When I finally picked it up and walked those seven steps, I stood there and thought: Why did I let it sit there?

And if I can't overcome the mental game to do something that simple, how are any of us going to do something as disruptive as evolving our businesses before we're forced to?

The Paradox We All Live With

Here's the thing: The present you knows what the future you needs, but the present you doesn't act.

We know we need to evolve.

We know disruption is coming.

We know we should be adopting AI, creating efficiencies, diversifying beyond AUM. We know all of this.

But we don't act on it.

And it's not like a quality flaw or a personality flaw. It's a human flaw.

We have this incredible ability to understand what's coming, to access more information than any generation in history. But the gap isn't informational. It's psychological.

We go to conferences. We read books. We listen to podcasts. We consume all this content, and then it evaporates as it gets into our mind. We get to the office and face emails and fires. We never take the time to use that conference insight to actually rethink how we work.

That is the gap between knowing and doing.

Why We Can't Act

The human mind is wired to prioritize immediate comfort. That fire we need to put out. That email that will give us a dopamine hit when we send it.

There's always something more pressing.

We know the thing we're working on has a gain—we'll feel productive, we'll eliminate one item. But if we invest time into something with a future gain? It's abstract. Uncertain. Hard to prioritize.

It's the same reason 25-year-olds struggle to save for retirement. Their brains can't prioritize a gain more than a lifetime away.

The research here is striking.

Psychologist Peter Gollwitzer did a meta-analysis that revealed goal intentions, statements like "I intend to grow AUM by 20% this year", account for only 20 to 30% of variance in actual behavior change.

Having a goal explains less than a third of whether you'll actually achieve it.

The reason? Goal intentions specify what you want but fail to specify the when, where, and how. We set goals at the beginning of the year but don't talk about how we're going to do that. We think stating it will make it happen.

The missing link is implementation intentions—an if-then plan: If situation Y occurs, I will initiate response Z.

A better goal would be: "Every Monday at 9am, I'm calling five prospects from my old list."

Focus on the action, not the goal.

But there's another layer that makes this harder.

When we sit in a conference session and learn about AI workflows or new processes, our brain releases dopamine similar to the reward from actually doing the task. Learning feels like work. Like progress.

Then we face what is known as the implementation valley of death. The conference environment where ideas are abstract and frictionless versus the messy reality of our office. The software doesn't integrate like they said. We hit hurdles you didn't anticipate.

I lived this building our technology company. I studied another company's model inside and out. We went to replicate it and hit bumps I couldn't overcome. I had the illusion of competence. The public-facing version was the output of lesson after lesson stacked together. I didn't have that depth.

It's the same at conferences. Things sound easy. We think we get it. But we don't know the depth. And when we return to reality, the information just sits there.

The Kodak Lesson

The popular narrative is that Kodak failed because they didn't see digital coming. That's totally incorrect.

Kodak invented the very technology that destroyed them. In 1975, engineer Steve Sasson invented the first digital camera. Market research Kodak did in 1981 projected that digital photography would replace film in 10 to 20 years.

They had the knowledge. They even had the patent.

But instead of pivoting, executives used that 20-year window to milk the cash cow of film.

They didn't want to cannibalize their high-margin chemical business for low-margin digital cameras.

Loss aversion, the fear of losing certain profits today, prevented the actions required to secure tomorrow's profits.

They had all the insight, the information, the patents.

They just didn't act because they were comfortable in what they knew.

We see this in our industry constantly.

We're comfortable in the AUM business we know. Anything new gets pushed aside: "It's not generating enough profit. We'll deal with it later. Right now we need to focus on what's making us money today."

That is our Kodak moment.

The Software Trap

"But we are acting. Look at all the software we're using."

Buying software to solve a problem is retail therapy for business problems.

We mistake buying the software for solving the problem. The gap gets filled with shelf-ware that mirrors unused gym memberships.

We get frustrated because we're not seeing ROI. But buying it isn't the problem, implementation is.

We have to spend time with it to get value from it.

Closing the Gap

This gap is closable. But it requires us to do the one thing we find most difficult: treating our own business with the same rigorous discipline that we demand of our clients' portfolios.

Think about how frustrated you get when clients don't take action on their financial plan after you've guided them step by step.

We need to do that for our own businesses.

There's a framework called MAP: Motivation, Ability, Prompt.

Motivation is the desire to do the behavior. Ability is the ease of doing it. Prompt is the trigger to do it.

If a behavior doesn't occur, at least one of these is missing.

Think about CRM migration. Leadership has motivation, but does the team? Are we making it easy, or is it a huge hurdle? What's the triggering prompt?

If we're not getting the AI adoption, process adoption, or CRM adoption we want, then audit MAP for the people whose behavior you're trying to change.

James Clear argues that you don't rise to the level of your goals, you fall to the level of your systems. When we set goals, we should spend longer setting up systems. Creating behaviors and habits that, consistently done, give us the best shot at reaching our goals.

That Amazon box sat there because although I had motivation and ability, I lacked a prompt.

Every time I walked past it, I rationalized why I couldn't take it right then.

If our mental games keep us from doing something that simple, we're definitely struggling with bigger, more disruptive things.

The gap is maintained because we value consistency with our past self more than adaptation to our future environment.

Memory becomes a substitute for thinking. We rely on what we know has worked instead of thinking about what could be done.

The only way forward is to be intentional. To accept what we are today but know we're not alone. What we are today is not what we need to be tomorrow.

And we start that process today instead of waiting until we get hit in the face.

The best is ahead!

-Matt