Strategy First or Tactics?

Financial planning is like religion.  There are two ways to look at it.

In religion, “Orthodoxy” emphasizes correct belief and rituals, whereas “Orthopraxy” emphasizes correct conduct.  Wikipedia has an interesting discussion of the differences if you begin with orthopraxy.

“So what?”, the planner cries!

There are two approaches to planning, just like religion.  Orthodoxy is strategic and orthopraxy is more tactical.

Orthopraxy seems easy, follow the steps and all will be well.  At the same time it is difficult because most people do not know why the steps are there, whether they have changed, or whether they apply specifically to themselves.  This form is about efficiency and is generally found with planners who are formula driven.

Orthodoxy on the other hand is easy because each of us can, within limits, design our own plan.  Orthodoxy is difficult because to implement our vision we must choose from a smorgasbord of possible tools, rules and practices.  This plan is about effectiveness.  Efficiency comes later and usually with the help of a guide.

I have noticed that most people who expect to have plans “done to them” are in the orthopraxy camp, while a few others want to be the planner and have an assistant.  More the orthodox way.  “I have this idea about my future, help me implement.”

I have previously talked about the difference between maps and guides.  It is the same discussion.  Some people will be better with maps than guides because otherwise they would have done nothing.  For the ones that are interested in the process and making it personal, only the guide approach works well.

For the professional planner who is providing the guidance, there is a unique problem.  People do not adopt new courses of action very easily.  For the mapmaker, the problem is to get people to change how they allocate their resources, how they become disciplined, and how they tolerate the review and revise process.  For the guide, it is about clarifying over-arching, sometimes conflicting, goals, becoming a mentor and  conscience.

People do not change easily even when faced with overwhelming evidence of the need to do so.  The solution lies in the ability to communicate the need in ways they can understand and act upon.

Consider what the Dalai Lama has said, “Every change of mind is first of all a change of heart.”  Or as sales trainers like to point out, “Logic will never change anyone’s worldview.”  Meaningful change is first emotional.

People need an assistant because it is fiercely difficult to change your own worldview.  That may be a foundational reason why many do-it-yourself planners have weak results.

The professional planner can help with appropriate guidance, information, discussion and repetition.  Done perfectly, the client will accept the change as their own and act accordingly.

Do not overlook the advisor-guide’s possible contributions.  Financial planning involves much more than a collection of techniques and a colored pie chart. 

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Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.


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