Asset managers are no strangers to transformation. Over the past decade, many have gained operational scale with operating model changes that harness technology, asset servicing partners and platform-integrations across both middle- and back-office functions.
However, the pace of innovation these days is changing the face of transformation. Those firms that are agile and can take advantage of the latest technology and market infrastructure evolutions should stand apart. To be ready for this next wave of transformation, asset managers need effective change management strategies. Yet all too often, many firms are falling flat when it comes to change management. At best, they are underestimating its importance. At worst, they are ignoring it.
Either way, failing to proactively and adequately define a right-fit change management program upfront has financial and cultural consequences. Transformation timelines may take longer because there may not be a dedicated team responsible for business readiness. In addition, functional teams could get lost in the weeds of implementation rather than zeroing in on operational readiness. Not surprisingly, longer implementation timelines can mean higher costs. Other challenges include attrition rate increases, incomplete scope definition and negative morale.
Asset managers could avoid these consequences and get more from transformation programs by changing their approach to change management. Instead of relying on yesterday’s approaches, asset managers need more integrated change strategies. While change management initiatives may vary in scope, this four-part foundational framework could help asset managers develop an effective change management strategy for any initiative:
1. Define the scope, inform the organization. It is critical that the entire organization—from the top down—understands the extent of the change management strategy from the beginning. Not only does this include articulating the main objectives, but it also means making it clear which functions, products and locations are impacted with a comprehensive communication plan.
2. Understand stakeholders, engage leaders. Once the scope is defined, direct and indirect stakeholders should be identified and understood. Identifying the level of stakeholder involvement is critical. All stakeholders must agree to their roles and have clear marching orders of how to fulfill them. The earlier this is done, the better. Getting key leaders to demonstrate commitment and show active engagement will set the right tone for everyone.
3. Gauge change, align culture. When sizing the amount of change for the firm, asset managers should ensure that the level, scope and speed fit well with the organizational culture. Successful change management strategies have to resonate and be authentic from a cultural standpoint to be effective.
4. Determine the structure, set the timeline. Depending on the size and structure of the initiative, change management may be a component of each functional project team or may be led by a standalone change management team within the program. With all this in place, asset managers can set and socialize the timeline to all stakeholders.
For more information on this topic, please read our recent InsideOps: Change management for asset managers: Is your firm ready to take on the next wave of transformation? or contact me at email@example.com.