Cultural challenge: How to create consensus to drive strategy forward

Cultural challenge: How to create consensus to drive strategy forward

When faced with a need to evolve your market-leading reputation, an aligned enterprise is the most critical piece of the puzzle—above and beyond a good product portfolio.

Without all involved parties’ buy-in on shared goals, values, and direction, an organization may not maintain its relevance or reputation for innovation in today’s challenging marketplace. Often, a third-party perspective is necessary to help all parties come together to achieve consensus.

Such was the case when a global asset manager engaged Oculus to assist in the creation of an enterprise-wide strategy to achieve recognition as an innovator in the decumulation conversation in the post-retirement income market within the next five years. This organization had been working toward this goal for several years and had challenges with competing priorities and alignment on approach across the various business lines. Leaders in the organization determines a neutral, experienced viewpoint may be helpful to move forward.

A note about consensus versus alignment. At Oculus, we are sensitive to different cultures and how they impact strategies and implementation of projects. In some cultures, alignment is the lever to move forward. In others, consensus is critical and projects will stall without it. This client’s culture was oriented toward consensus, so our guidance and approach was geared to help them accomplish that.

Oculus articulated the goal—to bring an institutional income-first offer to the market. This new offering would maintain and increase the firm’s relevance in the market as an innovator and be attractive to large defined contribution. It was also important to align with the organization’s asset management value proposition to ensure go-to-market alignment.

Oculus then created a framework within which to approach the challenge:

  • We engaged in a holistic discovery process to review work to date, including options that had ultimately been discarded and internal rationales for those decisions.
  • We collected all internal perspectives through a series of interviews.
  • We educated the client on current offerings in the market and how these products impacted the recordkeeping platforms onto which future products would ideally be distributed.
  • We reset the baseline for future iterations of product conceptualizing by creating a scoring process to assess each product construct under consideration.
  • We identified strawman product concepts to score, leveraging our extensive research and product expertise on the retirement income landscape along with the organization’s now-clearly defined goals to guide our discussions.
  • We scored all the options through a series of in-depth working team meetings, identified the potential “right” constructs, made final recommendations, and ultimately drove to a quantitative result that was supported by the qualitative discussions.

Discovery

Upon discovery, we found that viewpoints from within the multiple teams represented on the working group were inhibiting an enterprise consensus on the most viable construct. We conducted a series of interviews to organize the conversation and determine what constituted success for the organization and found some surprises in the overall themes.

First, there was relatively good alignment across much of the group for foundational ideas of success. For instance, many identified regaining market recognition as an innovator in the retirement space as an objective to remain competitive. Almost all subjects said creating a clear line of sight to meaningful distribution of the new offering was a priority. There was also unanimous agreement that past efforts had lacked broad commitment, consideration of execution challenges, and a view on a broader suite of offerings.

However, there were differences based on the roles held by each working group member. Some saw inclusion of managed accounts as important while others did not identify this as key. There was misalignment about how quickly the offering would need to become broadly adopted, if at all. Beyond adoption, there was misalignment about what key performance indicators should mark success. Finally, the speed in which an engagement or participant experience capability would be developed was not fully aligned across the group.

Education

Oculus then facilitated several educational sessions to bring all participants onto a level playing field from which to start analysis. With multiple distribution businesses selling into different aspects of the defined contribution space, there were varying degrees of understanding about what each construct would mean in terms of implementation. It was necessary to begin from the same foundational place.

We began with the current market state including the benefits for creating this type of offering, the history of these offerings over the past two decades, recent developments in the past two years, the competitive landscape, how like products were being deployed, and what types of partnerships are occurring to bring them to market.

We then conducted a deep dive into four competitive product types. We looked at how each worked with asset management products and outlined how, depending on the construct, there would be varying levels of difficulty to deploy them on a DC recordkeeping platform. The degree of difficulty implementation posed would be a driving factor in the ultimate construct we chose.

After these sessions, the working group was able to begin looking at concepts with a common foundation.

Scoring and Concepts

The next phase was creating a mechanism to score potential offerings based on what we now knew were the most important things the future offerings should accomplish. We used the discovery findings in addition to what we knew about the overall enterprise business strategy to determine a set of guiding principles by which we would approach the scoring exercise, and determined three main categories: asset management persistency, client adoption and ease of implementation. Within these categories, 10 areas of impact were identified as critical, which were the areas we scored against.

We then identified the four product constructs we would stress test against our scoring mechanism. Through this process we determined that the development of a retirement income strategy and roadmap required deciding which construct to start with, identifying additional constructs for consideration, and eliminating those not aligned with the company’s overall value proposition.

Then we outlined a spectrum of income products and services integrated with the firm’s core investment product offering and the individual investor profiles that appealed to most stakeholders. From there, we introduced the scoring dimensions and their relative performance under each construct, incorporating feedback and determining impact levels.

All viewpoints were brought to the table to identify the pros and cons of each offering against constraints and guiding principles, as well as identify key product support requirements for partners, participants, sponsors and plan advisors based on final options. These working sessions ensured we had cross-organizational buy-in to the guiding principles so we could be certain of coming away with an aligned recommendation.

The scoring sessions laid out all the options in black and white. After evaluating each against the scoring mechanism, the working group unanimously came to the same conclusion about which solution was the right one to bring to market first. This allowed us to develop a universally supported position that we then presented to executive management, which formally approved moving forward to the development phase.

Outcome

Oculus was able to, in seven short weeks, drive consensus that led to confident decision-making. Discovery illuminated the varying perspectives and market knowledge, education gave everyone a common understanding, and scoring provided clear information, resulting in the enterprise recommendation on how to proceed with the support of all distribution line, the product organization and asset management. The effort was a true quantitative approach balanced with qualitative conversations that allowed all parties to reach the required balance to move forward.

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About Jamie McInnes

Jamie McInnes

President

Jamie is a recognized leader with over thirty years of experience working in several firms across asset management, banking and insurance. His leadership roles have focused on a variety of business models and markets covering retirement, wealth management and protection. In 2018, he joined Oculus Partners as a Senior Consultant and, in January 2021, Jamie acquired the firm.

Prior to joining Oculus, Jamie spent 10 years at Prudential Financial. Initially, he worked within Prudential Retirement ultimately leading its full-service business which delivered defined contribution, defined benefit, deferred compensation, IRA and advisory services to 4,000 institutional clients and 2.5 million individual participants. His final three years at Prudential were spent in Prudential International Insurance developing and leading its market entry to Indonesia’s life insurance market. As the CEO he developed the local senior leadership team while expanding distribution inclusive of bank assurance, tele-marketing and a direct-to-consumer digital channel.

Jamie joined Prudential from Merrill Lynch where he led its Retirement Group’s institutional offerings covering DC, DB, NQDC and trust and custody. This followed his return from Japan where Jamie had initially been leading the platform development for CIGNA’S joint venture pension business as their CIO and subsequently as the firm’s Executive Director advising multi-national firms around pension risk issues and the benefits of transferring benefit programs to a DC framework.

Jamie began his career in management consulting focused on banking and insurance company back-office operations and entered the retirement business initially with Putnam Investments and then joining a VC backed on-line 401(k) company prior to relocating to Japan.

Jamie earned his undergraduate degree in Biochemical Sciences from Harvard College, has a MPhil degree in International Relations from the University of St Andrews, an MSc in Finance from the Sawyer School of Business at Suffolk University and is a Chartered Financial Analyst.

Passion/Area of Focus

Helping leaders align and enable their teams to accomplish goals they felt were unachievable.