Client Story

When success depends on internal consensus

A global investment firm had created a North American subsidiary through a series of acquisitions. Now management hoped to transition the subsidiary from selling not only financial products but also investment consulting services. If it successfully made the transition, the subsidiary would compete head-to-head with investment advisory giants already active in the US market. Management had tried for several years to steer the company in this new strategic direction but had little success. To step up the effort, management brought in a new CEO from a prestigious US investment firm—and enlisted us to help implement its strategic vision.

Aligning people, processes, and systems delivers results

We hit the ground running by conducting a rapid diagnostic. Our findings showed that employees throughout the subsidiary understood the new strategy but that they weren’t aligned behind it for several reasons. For one thing, after extensive turnover at the highest levels, there was widespread mistrust in the organization’s leadership—including mistrust of the incoming CEO. In addition, the interviews we conducted as part of our assessment revealed that the sales representatives felt the company lacked the right advisory capabilities and that the research coming out of corporate headquarters was inadequate for the US market. As a result, the sales representatives believed that management was asking them to play in a space where they weren’t being equipped to win. They also believed the company was presenting the shift in strategy as a binary choice: push products, or push investment advising. And they thought management expected them to cut over to investment advising immediately. What’s more, we found that the organization’s current incentive systems still focused only on encouraging sales of financial products and not on sales of consulting services. Legacy operating and IT systems inherited from the series of acquisitions that created the subsidiary made it even harder for the company to shift gears.

To support the strategic shift, we worked with the C-suite to handle the trust issue through a steady presence, effective communication, and symbolic action—for example, by conducting a summit so the subsidiary’s leadership team could gain consensus on the new strategic aim. Drawing on feedback from the sales teams, we also set up a working group of leaders from the subsidiary and its parent firm. The group’s mission was to focus on strengthening the company’s advisory research capabilities with a view to developing new offerings tailored specifically to the US market. Finally, through our communication campaign, we assured the sales teams that they weren’t expected to transform themselves into consultative advisors overnight. Indeed, we translated the strategy into a three-year set of guidelines that included revenue and market-share targets such as ratio of revenues from consultative versus product selling for each sales region.

When it really matters

Our support enabled the subsidiary to start making measurable progress toward its new revenue and market-share targets in just six months. Self-assessed senior-team effectiveness ratings improved 70%. And after just one year, the subsidiary rose by several levels in the industry’s league tables that rank investment companies in its market.