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 happening 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 opportunity to differentiate ourselves to become the obvious choice in the hearts and minds of the people whom we want to matter 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 environment, 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 regulation, 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 transparency 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 talking 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, sucking 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 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 pricing 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 successful 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 championship 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.

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 experimenting 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 environment. 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 uncertainty 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 company 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 coming, 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 ourselves around the world. I know there are equal competitors in other parts of the world; in China, for instance, there are 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 encourage 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 margins 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 compliance 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 opportunity 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 happening in financial services right now, I would describe the trend as the maturing of an industry. Let me explain.

When you study industries that go through change, ultimately, 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 fiduciary 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 consolidation 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 valuable 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 question: 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 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 disruption 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 disruption 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 financial 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 seeing 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 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 finished. Those mirrors that you see up on the outside on the top—these little mirrors all around the store? Those mirrors 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 investment. 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 technology 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 recommendations 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 millennial consumer as well, that everyone was sort of afraid of it and moved straight at it. It created brands, value propositions, 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 business the same way they’ve always done it and fallen victim to their own success. But instead of waiting for a burning platform 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 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.

Peter Sheahan, the founder and CEO of Karrikins Group, 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.