Silos in asset management firms between the front office, back office and sales teams are the result of increasingly complex organisations, according to an industry think-tank.
Research conducted by the 300 Club – whose members include CalSTRS, Hermes Investment Management and Royal London Asset Management – found the growth of institutional assets means firms need to carefully manage business expansion.
Roger Urwin, global head of investment at Towers Watson, said: “Complexity breeds silos which can damage culture and in turn sustainable performance. Growth generally has the same effect.”
Urwin said growth can lead to some divisions’ perceived value going up or down as a business expands and therefore, needs to be carefully managed by leadership.
He added that stamping out stereotypes was one of the best ways to ensure that growth did not increase silos and associated hostility.
The 300 Club paper also focuses on a lack of talent that it claims is prevalent within the asset management industry.
Urwin said this has a corrosive impact on corporate culture with extremely talented individuals’ strong and distinctive personalities having a material impact on teams.
He added: “Talent must be embedded in a team structure to be successful and sustainable. All talent needs a particular infrastructure of front- and back- office support.
“For an investment organisation to excel…the whole team must become the embodiment of that talent. That requires a culture of personal and collective development, appropriate freedoms and collaborations and respect and recognition.”