The path to great during uncertainty in Asset and Wealth Management
Posted by Luuk Jacobs on 17 September 2020
We’ve been rather spoilt with the pace of change in the last 20 years as new technologies have hit the market, with billions of people joining the market economy. This has created a dynamic and complex environment in which multiple windows of opportunity constantly open. Then suddenly, the world went on hold. The last 20 weeks or so have rewritten the rulebook but left the pages somewhat blank as we exist under a fog of uncertainty.
We have all had to come to terms quickly with this changed environment and companies have had to act with speed and efficiency to avoid a bumpy ride.
Former CEO of Intel Andrew Grove famously said, “Bad companies die in a crisis, good companies survive a crisis, but great companies are defined by a crisis”. His wise words are very apt now especially as we have moved from BCP into a more BAU-like mode and as we start to reinvent normal, it is important to acknowledge and reflect on the past, where we are now and what’s next.
There have not been any casualties in the Asset and Wealth management industry, so we know our industry has good companies, or at least operationally resilient companies but what makes a great company right now?
Being great is not about reopening the office buildings or about excellence at execution, which is a still widely perceived to be a source of sustainable competitive advantage. The developments in the last 6 months have even more shown that when technologies erase industry boundaries and the pace of change is so fast, you can’t wait for things to stabilise and therefore it is not enough to manage efficiency but manage change.
Therefor companies need to become excellent at reading the landscape, anticipating and forecasting and doing it extremely fast. The first mover of advantage of having some kind of clarity about the direction of travel for change before anybody else does, or in other words the ability to sense what is coming before the fog clears, is what will make companies great in these times.
As much as it is important in times of crisis to look at the needs of your clients to define what your next steps are, it is equally or more important to look at the landscape – even when it’s foggy. This is not an impossible task. Airplane pilots train for all eventualities and when qualified for low visibility operations situation. They undergo specific training and testing every year to be allowed to continue to operate in these conditions and to maintain high standards. Industry should see itself in the same way as pilots who can never slack off or miss out on new training and skills.
Thinking in this way we can see the bigger picture made up of competitors, alternative solutions and the wider environment to become innovative in the way our industry operates. As such creating the tactical and strategic insights needed to set out the next strategic steps for a company.
To move away from our industry’s focus on managing and distributing funds that are delivered to clients through (insurance and investment) wrappers or platforms, it is essential that we map the fundamental aspects of the changes that are happening around us, generate new insights and emerging opportunities and experiment.
In our series of podcasts around Covid-19 we have heard a recurring theme that those managers that have a fully committed digital strategy, e.g. a fully integrated digital platform, have emerged from this crisis as winners. While there are currently no losers in the form of failures in the industry all firms will have to re-evaluate their digital strategy and in the process this will undoubtedly lead to new or re-invigorated projects and programmes of implementation to ‘catch-up’ with the leaders. We must also not forget successful development and implementation is a re-iterative process, a continuum in pursuit of excellence and strong performance on all levels.
The landscape of an organisation is several orders of magnitude more complex than its inside. We are comfortable with and know the insides of our company, but we may find beyond its confines we are afraid to get lost and or make a misstep. Stepping outside of this is a significant cultural change and new tools and processes are needed to ground this culture change. It is not a one-off exercise, neither is it a task of a specific appointed team; sensing the landscape and generating insights is an ongoing team sport.
If someone asks you if crisis is going to lead your company to greatness, remember to tell them it may do but it is way beyond the returning to the office. It is about making sure the engine of great is running on new observations and insights which convert into tangible programmes to change not just the processes but the company, ahead of when the Covid-19 fog clears.
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Posted by Pierre-Yves Rahari on 28 September 2020Read post