In the midst of these turbulent times one thing is certain: digital technology is poised to reshape our industry with even greater speed, which will drive permanent changes in how we run our businesses. And even though we’d rather not have to adapt such under pressure, it’s still exciting to embrace digitization to improve efficiency and enhance client service.
Over the past few months, firms have quickly adopted hundreds of digital tools and practices – and have managed it well. So, now, many leaders are thinking about their next steps by asking: What’s our best path forward with digital adoption? Some are weighing bold investments to take their firms to the cutting edge of technology with the vision leaping out ahead in the post-pandemic era. Others are taking a more cautious approach, viewing digital tools mainly as a method to keep their firms more watertight for even rougher waters ahead.
Chances are that one of these approaches resonates more strongly with you, based on your firm’s unique strengths and competitive universe. Each view has its merits. However, the right answer might be to take a pragmatic path that passes between these extremes to deliver a competitive edge and greater efficiency.
The Lessons of History
No doubt, we are in uncharted economic waters right now. But we still can learn a lot from the experiences of business leaders who have dealt with major disruptions in the past. Entire books have been written about these topics, but there’s one influential article I’d like to highlight, which speaks directly to our challenges today.
Published a decade ago, “Roaring Out of Recession” (Harvard Business Review, March 2010) analyzed what it took for companies to come back stronger after three recent economic downturns (early 1980s, early 1990s and the Global Economic Crisis of 2008). The authors discovered that companies that executed the most dramatic cost cutting— one of two “all-in” approaches — ultimately had the lowest chance (21 percent) of beating competitors after the crisis was over. Meanwhile, companies that went “all-in” in the opposite direction, pushing to grow aggressively during a recession, had only a 26 percent chance of dominating competitors post-recession. Ultimately, the most successful companies pursued a “multipronged” strategy that balanced cutting costs and investing for growth.
What does a multipronged strategy look like in the context of digital transformation? Typically, it involves three objectives: formulating a firm-wide plan; driving operational efficiencies; and boosting personal productivity. Let’s consider each of these:
Charting a Path Forward
Studies about post-crisis resiliency haven’t yet focused on the wealth management industry. Still, we know intuitively that individual investors will look to advisors and their firms to help them chart a sound course for the post-pandemic world.
How firms use the time now to strengthen their capabilities will have enormous implications for how they guide their clients into the future. Let’s sustain our digital momentum to ensure that our industry stands out as a leader by providing the most responsive products and services possible.
The Empower Your Way Forward Program is designed to help Pershing advisors reflect on their business performance and adjust their strategies to challenging times. View the program overview and video.
Maura Creekmore is a Managing Director and member of the Executive Committee for BNY Mellon | Pershing. As the Head of our Global Client Relationships (GCR) organization, Maura leads relationship management, account management, global client service and strategic planning and administration for all of our broker-dealer segments. Maura has served in many leadership roles during her tenure at the firm, most recently as a member of the GCR leadership team focusing on employee and client engagement.