Investment Professional of the Future

Investment Professional of the Future

How the Work Environment Evolves: Culture, Incentives, Values, Organizational Design, and Methods


It is important for employers to create attractive work conditions for their professionals. The central aspects of the investment firm’s people model revolve around (1) workforce scope and structure and (2) workforce style and culture.


Workforce scope and structure: The scope and structure concern the locations that the workforce uses, the number and roles of the employees in each location, and the team structures that exist to link activities through an operating model, investment model, and distribution model. Other aspects include the degree of vertical integration in the investment value chain and the extent of delegation and outsourcing arrangements.

Workforce style and culture of working: The style concerns issues of hierarchy and empowerment as well as the organizational commitments to training and development; the culture concerns values and incentives and the balancing and alignment of priorities among employees, clients, and results.

Organizations must reach informed and calculated positions on these elements that are essentially decisions about strategy by reference to the organization’s comparative advantage, situational context, and acceptable tradeoffs. And they will do so having regard to the key evolving factors that govern them. In short, nothing is stationary; everything is moving.

The big organizational change factors influencing investment firms are captured in our industry leader survey in Exhibit 19. The impacts of technology lead the list. Significant disruptions and transformations arising from technology are inevitably going to affect culture. In many situations, the culture will be adversely affected because personal change is always difficult, and for many professionals, change involves some pain.

An area where cultural change can be positive is the degree to which organizations create tailwinds from clearly defined purpose and values and give particular attention to individuals’ personal development. The full spectrum of how employees feel about their work is covered by the term “employee experience,” defined as what employees encounter, observe, or feel over the course of their employee journey at an organization, taking account of recruiting, onboarding, employee development, promotion, and exit circumstances. Although such areas have not been central to strategy before, greater attempts to manage the employee experience will become a more common lever for organizations to differentiate themselves in future.

Exhibit 19
Graph shows the predicted sources of disruption and change for invesment professionals. Those surveyed could choose up to three. The top two answers were the difficulty of integrating technology without diminishing culture and the growing importance of a firm's purpose and values alongside its investment capabilities, products, and results.

The majority of investment organizations have developed their investment propositions around talented individuals. Indeed, the star portfolio manager model has been used by a number of leading investment firms. Such a model will not be eliminated, but it certainly will be diminished as the teamwork plus technology model gains ground. Simply put, teams can create diversity payoffs that individuals can’t. In addition, it is becoming very clear that technology parse data more efficiently than people can.