As all of us adjust to working from home, we know that the world we lived in has changed as a result of the COVID-19 crisis. It will never be exactly as it was pre-crisis, but we do not know what the landscape will look like when the crisis is over. The key points we need to consider are: how will our decision-making processes change, how we will interact with our clients and co-workers, and how will we ever be able to work without our dogs and cats sitting on our laptops?
One thing we know is that every single business process, big or small, will be examined through a new lens. The big thinkers are already laying down what they think should change. Marc Andreesen, in his remarkable call to action, has alluded to the “monumental failure of institutional effectiveness.” He challenges us to “build”....build better housing solutions, a better education system, and a better transportation system. “We should be asking the question, what are you building? What are you building directly, or helping other people to build?”
Many of us in the investment management community are asking ourselves what solutions we would like to build. The current level of disruption was not foreseen under any #operational risk scenarios.. What plans should we put in place to deal with events like the one we are currently facing in the future? The alternative would be to write the current situation off as a once in a century event.
The crisis cuts deeply for most investment managers, who will need to explain how they will deal with a similar crisis going forward. Furthermore, many researchers have said that we are still in the early innings of the crisis - how will they deal with the situation as it unfolds now? Global demands for many products will shift in ways we cannot predict - more gloves, less high heels. Global supply chains will be disrupted as well. For example, big box retail stores will certainly be impacted, and many will not survive. For investment managers, it means that new data sets will have to be assembled, new analytic models will need to be developed, assumptions will need to be revisited, and risks will need to be reassessed.
Investment Managers will have to become more nimble, more strategic, more client oriented. As we transition to the new normal creating profitable growth will require executive and management skills and leadership. They would need to be more adept at
- Allocating resources and capital for strategic yield
- Creating new success metrics for planning, decision making and incentivizing
- Digitizing the operating model, reducing cost and adding efficiency
- Creating a more customized client experience, providing them with more transparency
We at Pepper are working with clients on transitioning to a decentralized work environment with cloud based Investment Data Platforms, reducing cost by easing data collection and aggregation and increasing oversight by building end to end Deal Pipelines, creating interactive dashboards and analytics to have a complete view of the business. We advice Investment Managers on adopting cutting edge technology for efficiency and productivity.