Rebooting the global asset management industry

Rebooting the global asset management industry 51 Leaders have recognized that they have to be role models in new values by setting the tone at the top (41%). This is part of a leadership style based on example, teamwork and achievement that also ensures four other outcomes. First, senior executives in the business develop the skills to turn vision into action (36%). Second, staff incentives are linked to targeted outcomes (37%). Third, performing regular competitor benchmarking to ensure that progress is sustained on the transformation journey (32%). Notably, perhaps, only 13% of our respondents expose their leadership team to regular 360-degree appraisal. Various constraints holding back the adoption of AI and GenAI have served to moderate the incidence of all these actions. As the constraints ease over time, the tempo is likely to accelerate. There is ample recognition that small and medium-sized asset managers can no longer rely on markets to bail them out as they face the existential headwinds outlined in Section 2 (Figure 2.1). The hiatus will also coincide with sharp market volatility as the US–China trade dispute shows no sign of resolution. Major change programs initiated by asset managers after the bear markets of 2001-02 and 2008-09 soon ran out of steam as capital markets roared back to life. Few respondents in our survey expect this to repeat with their latest programs. Markets are likely to remain in a low real return era with frequent risk-on/risk-off cycles that, at best, will mark a sideways move. Only resilient business models can thrive in such a situation. And that requires visionary walk-the- talk leadership with a can-do mindset. Various constraints holding back the adoption of AI and GenAI have served to moderate the incidence of these actions. Insights Without mindset shifts, GenAI is just another tool Leadership is about taking people where they have not been before. Our motto is ‘Simply Better’: better than yesterday and better than expected. Our staff know that they can make a difference. We always want to know what they are thinking. Those in the trenches know what’s really going on. Transforming our operating model has been as much about mindset shifts as about technology. GenAI is as much about people as about technology. Talented people have a high sense of self-worth and worry that GenAI will devalue their craft and increase stress levels. The magnetism of the past remains powerful. Hence, we have used a twin-track approach. First, we ensure that top executives sing from the same hymn sheet and have clear ownership of our growth strategy. Second, the strategy has a convincing narrative that is communicated across the business. The narrative not only sets out the guiding principles we aim to follow, it also spells out clearly how they will affect staff, what kind of skills they will require, and what monetary and non-monetary incentives will come with the redesign of work. It also avoids the visionary rhetoric that sales and investment professionals so distrust, and addresses head on questions on unfolding asset industry dynamics and their inherent opportunities and threats. We are making progress knowing that our staff judge top executives by what they do, not what they say. An Indian asset manager “Leaders have to double down on getting buy- in for technology from their staff, otherwise transformation plans will deliver little.” “We need leaders with their heads in the clouds, feet on the ground and hearts in the business – those who constantly challenge the status quo.” Interview Quotes