Manage Disruption by Fostering a Culture of Innovation

Every industry is facing disruption today, as technological innovation changes everything from how we order car services to how we obtain financial advice. One of the ways to avoid having your business end up in the dustbin of history – along with horse-drawn carriages or video cassette recorders – is to have a culture that fosters innovation.

At my firm, we are working to make innovative thinking an even greater part of our culture. We’ve created opportunities for our investment teams and our staff across all departments to assess current and emerging trends in the markets and develop ideas that could enable our firm to remain at the forefront of serving our clients’ needs.

Incubating Investment Ideas

With our investment teams, 2017 marked the second year of our OppTank initiative, which is a forum for bringing new ideas to a seasoned panel, similar to the format popularized in the TV show Shark Tank. Investment OppTank provides an outlet for our analysts to incubate ideas. As we think about the growth of our firm and the need to remain competitive in a constantly changing industry, we understand that we have to create innovative strategies and investment capabilities for our clients. We know our investment staff can play a critical role in generating these new ideas. Analysts from our investment teams recommend products that they believe could serve unmet customer needs. Our goal is to identify a potential strategy that we would first incubate with seed money, and then if it proves viable, we could eventually roll it out as a new product for clients.

Our teams have come up with a wide range of ideas for new investment strategies, from one that focuses on companies innovating in life sciences to another that concentrates on companies promoting gender equality, a strategy that could appeal to clients looking to make an impact with their investments. 

All the ideas are rigorously tested. The analysts have to pitch their product recommendations to a selection committee. We look for ideas that are in keeping with our firm’s investment philosophy of focusing on products that have durability and can serve our clients’ long-term needs, and not simply capitalize on short-term trends in the markets. Departments across the firm get involved. Our product implementation teams, as an example, will assess the feasibility of bringing a product to market because obviously an idea isn’t worth pursuing unless you can effectively operationalize it.

The popularity of the program was evident in that we received even more ideas our second year, from all of our offices and from every one of our investment disciplines, including equity, fixed income, multi-asset, alternatives and beta solutions.

A Broad Company Initiative

We also developed an Innovation Leadership Program in which we formed five teams of employees across the firm to collaborate and develop innovative solutions to the following challenge: “How might we create investing relevance with the next generation of investors in a world where their preferred approach to advice is self-help driven?”

The senior leaders of our firm ultimately selected two of the solutions for further assessment. One of those, which could help individuals pay down debt such as student loans in an innovative way, has demonstrated significant appeal among next generation investors, and it is now in the advanced stages of design research and development.

Customer Centricity - Using Design Thinking to Solve Our Clients Wants and Needs

Brainstorming about how to innovate, of course, will be most effective if you apply a rigorous approach to developing and testing ideas. Our Learning & Development team partnered with a design thinking training firm for help developing our design thinking acumen. (Design thinking is an approach for creative and practical problem resolution, originally based on the way designers in fields such as engineering, architecture and urban planning address challenges.) With an emphasis on honing skills necessary to be creative and innovative, our framework has enabled us to identify and develop ideas to meet the evolving needs of our clients.

All this started in 2016, when a small cohort of participants took part in a two-day innovation simulation and tackled a business challenge in a team-based competition. That cohort spent the next seven months completing their training in design thinking and applying what they learned to several innovation projects. Several participants from that initial cohort are now innovation coaches who are working with more than 55 employees across our firm to address innovation challenges that we think align with our specific strategic goals and business needs. We have found laying the foundation for an innovative culture has three key components. First, you have to be laser-focused on your customers. Second, you must be willing to allocate resources to challenge the status quo. Finally, you must have a forum for sharing best practices for tackling challenges across your firm.

If you’re an established firm that’s been around for a number of years, it can be especially difficult to adapt to exterior changes. Sadly, for many companies, overcoming inertia and resisting the urge to keep doing things the way they always have can become insurmountable challenges. But by fostering a culture of innovation, and unleashing your employees’ creativity, you may be able to ensure that you’re not just ready for, but maybe even ahead of, what comes next.