“If you want to build a ship, don’t drum up people to collect
wood and don’t assign them tasks and work, but rather teach them to long
for the endless immensity of the sea.”
Antoine
de Saint-Exupery
The investment industry is today very immature in its human capital
management, with high turnover, minimal succession planning, and a
strikingly homogeneous work force. As founders age and investor
demographics change, the established investment firms will face
a
how to attract, develop and retain talent. “Purpose-driven companies,”
says Jeff Hunter, CEO of
Talentism,
“are more likely to have employees who exhibit cohesive behavior and
act in the best interest of the company and the investors.” Thus, we
foresee a professional CEO role emerging in asset management: She will
be fully focused on leadership as distinct from the traditional CIO and
VP of Sales. It’s worth noting that some of the leading asset management
firms, including D.E. Shaw and Blue Mountain, are leading the way by
being very proactive and mindful about managing their culture and
principles.
The Jobs
To Be Done in Asset
Management
\label{the-jobs-to-be-done-in-asset-management}
Christensen popularized the idea of analyzing a company by looking at
the
“Jobs
to Be Done” needed by its clients. Most money managers think their
main job is returns, but they are wrong.
According
to Amanda Tepper, CEO of
Chestnut
Advisory Group: “contrary to conventional wisdom, investment
performance alone does not drive asset flows. While there is a clear
relationship between the two, investment performance accounts for only
about 15% of the reason for placing money with managers. We found (very
low) correlations between trailing three-year returns (the primary
metric most institutional investors follow) and subsequent one-year net
capital inflows.”
Managers will still have to cover the basics like meeting return
expectations at the right risk levels with the proper internal controls
(the technical jobs to be done). The true opportunity set, however, lies
in connecting deeply with investor needs (their functional and emotional
jobs to be done). The winners in asset management need to provide
targeted customization at scale (a functional job). See Picture 8 for a
summary, and see