This is one of the most frequent questions I get from managers. Many managers look for an ideal sales structure. How should they organize sales vs. client relations; or, sales vs. consultant relations? Should they segment their sales force by client type or organize geographically? Where should product specialists report? How should the marketing and sales organization align with product development and management?
The answer to all of these questions is that it depends! There is no one ideal structure. If there were, all firms would have it. The best structure for a particular firm depends on: its market position; growth goals; existing client relationships; existing personnel; and investment capabilities. Designing and implementing the right structure will align the firm’s investment and marketing sides so that all personnel are synchronized and it’s brand in the marketplace is clear and strong.
Look for my new white paper coming out this week on building a premier marketing and sales organization.
It seems that both strategic and tactical asset allocation is in transition. Strategically, conventional approaches used over the past 30 years are being called into question. Analysis of risk measures and correlation between asset classes are being challenged. A generally accepted new approach may emerge, but we haven’t seen it yet.
Tactically, there is evidence of some rebalancing into equities after the big drop, but not yet sufficient to return to pre-bear market levels, although the rally of the past six months has helped. Many investors have not taken the actions necessary to return their portfolios to their strategic allocation.
The severity of the recent market events will affect investor behavior for some time. One beneficial aspect of this period is that it will generate some new thinking around asset allocation which is likely to inform investors in the future.
In my discussions over the past few months, I find a lot of inaction both from an investment and business standpoint. Many investors and managers seem to be watching the markets gyrate without making any moves. Similarly, there seems to be paralysis on the business side. Since firms are suffering from a profitability standpoint, they seem to be frozen, or cutting costs without much strategic thought.
Some consider this inaction prudent; they are exercising a sense of calm within the storm. Another description might be complacency. They are neither taking actions to avoid additional risk, capitalize on opportunity, or manage their business proactively. While it has been difficult to keep up with the volatile environment, managers who have well thought through strategies, and execute efficiently, are likely to be those that take most advantage of the tumultuous times.
As investment firms react to the new post-crisis environment, one of the issues they will need to address is what they should outsource. I have no doubt that outsourcing will continue to increase in the industry as firms will be reluctant to staff up with full time help to the degree they have in the past, as managers will be cautious to increase their fixed costs.
In the sales area, the outsourced solution is third party marketing. These businesses should continue to serve small managers and alternatives firms, but whether their use with larger traditional firms becomes more popular is unclear.
I see the largest potential increase in outsourcing in the marketing area. There are now quality resources available on an outsourced basis in RFP production, data base population, all forms of writing and communications, presentation design, website design, and various other elements of the marketing process. Managers should consider these variable cost solutions to their marketing needs carefully before restaffing with full time employees.
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