Client-centered cultural biases
Investment industry cultures vary widely by context and geography. There is one version of culture that has widely succeeded in service businesses, based on extreme commitment to clients and clients always coming first. Such a culture can only increase in demand given increasing client sophistication.
- Effective cultures that succeed over time are generally balanced, distinctive, implemented well by leadership, and synced to strategy. According to research on corporate culture (see Groysberg et al. 2018), the three largest elements of focus in a firm’s culture are clients, results, and employees. Effective culture is shaped by the balance among these three areas, often with an emphasis on the client-centric ethos—an organization’s purpose and drive in serving its clients—which is increasingly recognized and appreciated by a discerning clientele.
- Building a client-centered organization goes hand-in-hand with a fiduciary mindset. A healthy fiduciary culture both protects and generates value. It is therefore important to establish a continuous focus on culture rather than wait for a crisis. The key to the fiduciary mindset is being passionate about client-centered and competency-driven actions.
- Client-centered culture means having a clear client value proposition. This involves empathy, having integrity in all products, keeping a realistic sense of value for money, and wrapping all of these elements with trusting client relationships. Doing so is easier in a business model where conflicts of interest are deliberately minimized, as far as practicable.
- Client-centered culture can be assessed through client audits and client satisfaction scores. The next 5–10 years will generate significantly better methods and technologies to reduce the subjectivity in measuring client perceptions of value.
- Survey respondents rank clients as the highest priority stakeholder (68% overall and 77% from C-suite respondents), compared with 26% who say shareholders and owners come first (15% among C-suite).
- In addition, 38% say that client-centricity is the most important strategic factor, though this varied by region—from a high of 42% in the Americas to just 28% in Asia (where tech was prioritized more).