The triple threat of regulation, return and fee pressure, and political and social change are driving huge changes throughout the fund management industry.

Several of these forces are converging to impact our cultures.

We need innovation and diverse ways of thinking in order to come up with all the ideas that are going to help us adapt our operating models.

"We need to meet client and regulatory expectations around conduct and a culture of doing the right thing"

We need to attract great talent by understanding what society expects from us, and the fact that our employees want to work at a place that has purpose.

And we need to meet client and regulatory expectations around conduct and a culture of doing the right thing.

What are we doing to evolve our cultures? As a baseline that we all have: clear articulation of principles / values; give the grass-roots employee networks a voice.

I believe we should also be reinforcing culture at all levels:

• We make senior executives accountable: in our business reviews that are tied to bonus pools, about a third of the review are metrics on hiring, retention, diversity, and culture.
• We feel it should be a management issue not a Human Resources (HR) matter.
  BlackRock has the Human Capital Committee where the 100 top managers of the firm globally take responsibility for the implementation of cultural change within the organisation.
  From the employee opinion survey, we figure out what the top five takeaways are to improve for the next year, and the committee is responsible for implementing that change.
  They are measured against the result from the employee opinion survey for the next year.
• Another angle we should be pushing is the average employee. When it comes to promotion, career mobility and the major elements of these individuals, BlackRock’s principles are included in all of those assessments.
  The questions you are asked when you are judged for promotion focus on the exhibition of these principles.
• We also have global principles awards. We will pick the individual in each region who most exemplifies the four principles and they will get an award, dinner with the president of the company and they get their name on screen savers all over the company for a month.

There are a lot of ways that we are trying to push it from different angles to make sure that people really feel the culture within the organisation.

We also have a huge emphasis on internal mobility of which I am an example. This is important within our culture because internal mobility breaks down silos and ‘group think’ that can be created when you work with the same people for too long.

"We also have a huge emphasis on internal mobility"

And the kind of culture that can attract open-minded innovative and diverse thinkers — is exactly the kind of culture that we need as we look to make major changes to our business models, as we adapt to the forces driving change in the industry.

This is part three in a series. To read part one, which explains the three biggest forces shaping the asset management industry – click here.

To read part two, which focuses on how these forces are heralding a shift towards multi-asset investing – click here.

This article is taken from the research report Fund Technology, Data and Operations, Europe 2019. To download the full report click here.

 

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