As the world confronts the ongoing pandemic, it has become clear that most organizations have been focused on the near-term concerns and challenges such as cash management. Although, there is good reason to effectively manage current challenges, it’s also critical for forward thinking business leaders to find the time to work out how to make their businesses better when they emerge from this state of paralysis.
Over the last couple of months, our team has spoken with numerous leaders and senior members across various firms within our industry, and one thing is quite clear: many of the most professional firms are busy planning for the future.
The business environment changed so quickly in response to COVID-19, that most people were, understandably, caught by surprise. As such, the initial reaction of most was to lockdown into “survival mode”, effectively mirroring the rest of the country (and much of the world). As people settled into their “bunkers”, it seemed that people were pushing-off many decisions until everyone emerges from this situation. Clearly, the first priority is to scrutinize cashflows and ensure liquidity, but many have already assimilated and acted on the data and have now moved on.
While everyone is working remotely, it presents a unique opportunity to forge new relationships and reinforce old ones. Reaching out and connecting with old and new contacts is critical in order to identify new trends and triangulate upcoming opportunities that will arise through this unforeseen disruption in the market. Collecting as much information as possible right now, through speaking with colleagues and peers, can mean the difference between finding appealing new deals and missing them entirely.
Given investment values will likely face adjustment over the next couple of quarters, it is more important than ever to ensure that fund managers deploy remaining capital as wisely as possible to shore up fund performance. This, of course, can directly affect capital-raising prospects in the long-term. Further, pinpointing new investment opportunities can generate momentum to raise targeted capital in the near-term (i.e., capital required for select deals or strategies). Now is not the time to sit on the sidelines, rather it’s the time to seize any opportunity made available through proactive networking and market insight.
For a growth plan to be effective, a firm must ensure its people are prepared to manage the new opportunities. This can be done by advancing certain members of the team into new positions or by upgrading skillsets of the team by hiring new people. Now is an ideal time to consider the current structure of your team, with a focus on how to ensure the right people, with the most appropriate expertise, are in place to prepare for what is to come next. With a change in landscape, it is possible there are gaps in technical skills and/or industry expertise that need to be filled.
Additionally, it is essential to provide sufficient training, necessary to make sure the team can successfully execute your growth plan. Ongoing training should always be a priority, but it’s even more crucial in the current environment, giving the speed of change that we are all experiencing. As such, firm leaders must identify which specific training is central to advancing the team as a whole.
Proper mentoring of each person within the firm is also a key component to a long-term plan, as it will increase the likelihood of success for your highest-performing people, as well as ensure retention. Executing an appropriate “people-plan” is beneficial to the leaders and the staff of an organization, as morale increases with the promise of a clear and bright future. This will yield both a tangible and intangible return for the company.
As organizations approach new opportunities, they must make sure both the systems and the tools available are sufficient to address the additional challenges that will inevitably occur. Further, the most successful businesses remain focused on solving problems before they arise, with the goal of future-proofing the infrastructure. Therefore, it’s critical to be able to identify which systems and tools will be necessary, not only today, but several years from now.
In addition, efficient and frequent communications have never been more important. Communicating with counterparties, colleagues and even those within your own firm, via the most appropriate channels and at appropriate intervals are all vital to successfully executing on growth. Competitors will surely be focused on strategic communications with others in the market, and those firms unprepared or unwilling to keep up, will fall behind.
There are certainly many who are leading their firm with a long-term view and implementing many of the strategies mentioned above. Most who have adopted this view are quite optimistic that this period offers distinct growth opportunities that will pay dividends for years to come – and I tend to agree.
Langham Hall is an award winning provider of Fund Administration, Depositary and AIFMD services to global fund managers. To hear more about how we can help, whatever the requirements, please get in touch with a member of our team.