With the hot desk policy adopted by most organisations, most of us tend to use the same desk every time we are at work. I am no different and I am lured to the same desk at Citisoft’s Gresham Street office with a brilliant view of the majestic St. Paul's Cathedral. It’s human nature to resist change, however, we know that change is the only thing that brings progress, be it in our personal lives or careers.
As George Bernard Shaw once said, “Those who cannot change their minds cannot change anything.” As change agents, we very strongly believe that each of us should have the ability to adapt where change is the only constant factor in our industry. At the onset of my career, only traditional fixed income, equity products and plain vanilla derivatives were prevalent products traded in the market. This has now progressed to complex derivatives, private markets, and digital assets. What’s next? Offering a combination of these products in the Metaverse? Well, this is a possibility, and each of us and the organisations we work for need to be flexible enough to adapt to change.
Managing change can be achieved by adopting an approach to progress from the client’s current state to a desired future state using multiple strategies and structured processes. Asset managers’ approach to this is varied, with some having a carved out change function while others have chosen not to adopt a structured change approach. To the leadership community of the firms that are in the latter group: the elements of change listed below should enable you to see the benefits of a structured approach.
Recognising the need for change
“Organic” business growth from new market opportunities or launching new products is an implicit objective for every asset manager. To achieve these objectives, asset managers must be receptive to considerable change. My shout out to the leadership team is to pause and acknowledge the challenge that lies ahead and determine a strategy to take your organisation on this journey.
It is not only essential to recognise that decisions such as changing a key piece of technology or outsourcing a few functions, but also to take guidance from resources available in the market to validate that the agreed change will enable the firm to at least be in-step with the market, peers, and competitors. In addition to generating alpha, change will lead to many benefits such as gaining a competitive edge in the market, encouraging innovation, creating new business opportunities and thereby leading to a key goal of every asset manager—increased revenue.
Create a vision for change
A client I once engaged did not have ‘Change’ as an independent business function and had a vague and fragile approach to change management. Every end-client of theirs had varied and bespoke solutions to solve similar issues. In addition, some of these were resolved by introducing manual processes, which frequently lead to errors and escalations. A group of mid-level managers who saw the benefit of embracing a structured change approach presented a business case to the senior leadership team, however their idea did not take flight. Given the size of the organisation and its varied business lines, it would have been a monumental task to stand up a centralised change team. However, the client could have initiated the exercise with a single business line and slowly expanded to the rest over a period of time. Lack of buy-in from the senior management has resulted in the firm not having a change team and continuing to deliver non-standard solutions to their clients, which in the long run will prove expensive.
Creating a vision that captures the essence of the ”what, why and how” a firm intends to achieve their goals is crucial to the success of any large-scale transformation. The vision needs to be feasible, precise and flexible enough for your team to deliver. Pulling together the right team to work towards a common goal is paramount–firms need trustworthy decision makers and representation from the full breadth of the organisation–leadership teams, managers, subject matter experts and influencers. The vision should not only focus on the problem at hand, but also ensure a holistic approach in identifying changes required from front-to-back.
Communicate the change strategy
Merely creating a ring-fenced team to deliver change is rarely sufficient. Effective communication is the pillar of success of any change initiative. All your employees, clients and other stakeholders need to understand the new strategy and be trained on how their daily routine will be impacted. It’s best to keep your communication straightforward to reiterate your strategy across multiple internal and external meetings and forums. The leadership team should personalise the communication to direct reports by calling out pros and cons of the new approach and encouraging them to pass them down the chain. This will empower the team members to be a part of the change journey and most importantly to be open to constructive feedback.
Implement the changes
In this arduous journey, it is of great benefit to evidence quick wins. The change programme could be a large piece of work, however, to keep the crew motivated, it is advisable to publicise short term gains along the way. As an example, the automation of a manual process or minor operational procedure changes that has reduced risk and resulted in better oversight deserves communication of the benefits gained and recognition of the change agents that made this happen. These short-term wins are a huge motivational factor for the team and will give them the adrenaline to keep going.
Cultivate the change culture
A client I worked with lacked a robust change management process, with changes being presented to them by their end-client not being tracked to completion. We worked together to implement a process, agreed the process with the end-client and communicated the revised approach to the programme team across multiple forums. Though it was not a complex piece of work, the process took months to become part of BAU.
It’s always healthy for an asset manager to set aside some time for self-reflection and assess the pros and cons of the current structure – there is always room for improvement, seeking guidance and being open to new ideas. As this is a cultural shift for the organisation, embracing constructive feedback will empower the team to do their best work. The cycle continues until the change becomes the “new normal.”
Focus on the people
The central cog in the wheel for any change activity are your people who are involved in bringing about the change. In my experience of over 15 years in this industry, not having the right team to design, execute, support, influence, decide and lead signals the likely decline of the change team. I cannot emphasise enough on how imperative it is for the stakeholders of an asset manager’s change team to have the right aptitude to drive forward and along the way. Having the ability to adapt, engage and influence stakeholders at varied levels across the organisation, confidence and resilience are some of the key skills a successful change team needs to possess.
Implementing a change governance framework is important to ensure that the change function is aligned with the asset manager’s strategic objectives. It is pivotal for the change function to assist in coping with the rate of change in our industry and ensuring the firm can meet with the demands of its clients, the market and regulators. As a change agent, effectively communicating with passion and humility will enable one to connect with your audience and achieve success!