Culture is the purest competitive edge in the investment industry, according to new research

Cultural change

A new research paper called ‘The impact of culture’, published by Thinking Ahead Institute, suggests that the implementation of cultural change across the investment industry still lags.

According to Thinking Ahead Institute, a not-for-profit member group, investments organisations’ focus on organisational purpose and culture has increased in the last five years and its importance as a differentiator continues to rise.

“Filling this gap between opportunity and execution presents considerable organisational challenges,” said Roger Urwin, co-founder of the Thinking Ahead Institute.

In Urwin’s view, the factor most indicative of edge is leadership commitment to elevating and actively shaping culture in the organisation. “During this five-year study, conversations with investment organisations about how to generate sustainable performance from more effective cultures, that started at quite a low base, have improved markedly,” he added.

The Institute makes three recommendations for institutional investment organisations; develop a unique organisational purpose to define client value and grow stakeholder trust, develop a culture dashboard to track all dimensions of culture, and to create a common language and fact base for culture and have an aspirational target culture.

“Organisations that have an edge in these areas have been particularly well-positioned to address stresses from the Covid-19 crisis and the recent social crises around racial injustice. In these abnormal conditions, strong culture has proved to be a huge blessing,” commented Urwin.

As part of the Institute’s ongoing power of culture study, it is gathering data from investment organisations, both asset managers and asset owners, to explore their strengths and weaknesses in order to develop benchmarking to help drive up cultural standards.   

Urwin said: “We measure what we do because we can. But we can measure more than the activities we currently do. The Institute’s culture model and dashboard represent an attempt to capture a source of considerable comparative advantage for those who recognise the value in measuring culture as a step in the path of cultural improvement.”