Sometimes big, landscape altering ideas start out as little more than observations, growing under the shade of something much bigger. But with a little time and attention, these thoughts can grow into agents of change.

These ideas are our saplings:  thoughts we are nurturing about the business of doing business.

Specializing Your Way to Growth

Gina Solomon . January 28, 2016 

Many of us have been there before:  you join a small growing firm and, as the company grows, you are asked to take on more and more responsibilities.  It is an act of survival.  There are simply not enough bodies to go around to cover everything that needs to be done.  So, out of necessity, you become a jack-of-all-trades, doing things you never dreamed you would be doing, just to make sure the company succeeds.

Before you know it, your proverbial work “backpack” is stuffed to the brim with tasks and responsibilities, some of which you are really good at – and some of which you are doing simply to fill a gap in expertise or resources “for the time being.”

However, at some point in the business cycle, this act of survival―done solely with growth in mind― becomes one of the largest impediments to growth.  Working with our clients, we’ve found that one of the true balancing acts of growing is identifying when to shift from a generalist culture to one that is more specialized.  We call this exercise “unpacking your backpack.”



As firms grow from small to medium-sized and beyond, having the ability to manage the wide range of tasks in your employees’ “backpacks” becomes not only more difficult, but also increasingly less efficient for the company as a whole. 

For example, if you have one individual who is responsible for both sales and client service (which is typical in smaller asset management firms), that individual may be forced to make a decision between selling and servicing – both of which should be a priority (we’ve covered more on the topic of separating sales from client service in our blog titled Creating a Client-Centered Organization).



Truly unpacking, and by that we mean in way that allows your business to set a foundation for growth, requires a lot more than just understanding what everyone is doing, identifying the overlaps and redrawing responsibilities.  It requires a handful of steps designed to not only understand what resources should be specialized, but why, and to what end.

Step One:  Develop a strategic plan [link to strategic planning part of the site] to understand where you are now, where you want to be, and the time line you think it will take you to get from point A to point B

Step Two:  Determine what resources you need to get from point A to point B and how they differ from the resources you currently have.  Do you have the right people in the right seats?  Where are the gaps and overlaps? 

Step Three:  Dissect responsibilities across the firm, including identifying where there are overlaps and where there is both affinity and talent. Which responsibilities does it make sense to group together and which should be separated?

Step Four:  Lay out the roadmap to transform resources from the current generalist structure to the right level of specialization for your growth plans.

Determining when to start this process isn't entirely straightforward.  No one organization is the same and - despite similar products, industries and even sizes - when and how to initiate change tends to be very organization specific.  For example, a firm's growth prospects (whether through organic success or industry trends) and the firm's willingness to initiate and embrace change will all play into timing.

Contact us to see how we can help you grow. (link to contact page)


Creating a Client Centered Organization

Gina Solomon . January 26, 2016 

A mid-sized global manager recently asked us to help their senior management team think about client service best practices. This firm is in the fortunate position of having several years of high performing strategies in sought after asset classes and, as a result, has grown pretty significantly over a relatively short period of time. They have also gone from being a regional player in their home market to one that is expanding rapidly into markets around the world.

While the firm has, thus far, comfortably absorbed the growth within their existing structure, the management team is well aware that continued (and predicted) growth will likely have an impact on their boutique, service-oriented culture if they don’t plan for it appropriately.


In today’s hyper-competitive markets, superior client service is not only expected, it is one of the key hiring assumptions for asset managers. As a business practice, it’s been demonstrated that delivery of top quartile service can lead to not only better asset acquisition, but better asset retention. Given the potential headwinds in this area, this firm’s management team has been incredibly astute in thinking about the potential change in their service delivery in advance of need.

But delivering "best practices" in client service is more than just timely and accurately client reporting, it’s about knowing your client and understanding their needs. It can include everything from structure, to internal support, to thinking about what "best practices" truly means—both from the perspective of the service receiver and provider.


To help firms think about their own structures and whether they are organized to deliver on expected (and growing) service requirements, we've outlined a handful of key observations from our work in this area:

  1. Don't Underestimate the Power of Senior Management Advocacy and Support – We’ve found that in those organizations where client service is given an equal “seat at the table” along with investment management and sales, and have a voice in decision making, the combination is incredibly powerful.  Each of these groups have a different and important vantage points from which to see the business.  Their contributions, when equally supported by senior management, can ultimately create a stronger organization than those firms dominated by just one area of expertise.

  2. Best Practices Mean Different Things to Managers and Sponsors – From the client’s perspective, good client service is about much more than showing up on a regular basis to talk about the portfolio and its recent performance. It is about the manager truly understanding that client’s needs and objectives and helping them deliver on those goals.  It is about having the right people in the right seats to engage clients, provide insight,  develop partnerships and, ultimately, help your clients to be better at theirjobs. From the manager’s side it is about protecting the health of your business by better understanding your client’s needs – so anticipating their actions, looking across clients to understand trends and drivers behind decision making, and pro-actively developing and offering solutions to address those concerns before they impact your business.

  3. Structure Depends on Business Complexity, Not AUM – Not all AUM is created equal.  If you add $1 billion in AUM to an existing strategy, the stress it puts on the organization to service those client depends on whether it is in one account or 10 accounts or 50 accounts. If you add $1 billion across several strategies, the stress to the organization is multi-fold.  As your organization grows in complexity, the need to specialize and “unpack your employees backpacks” (link to blog post) becomes more critical. This is particularly true for sales and client service where, if not split, can hold the same resources responsible for both new client acquisition and client retention at the same point in the business cycle.

  4. Growth Can Overshadow the Need for Service – We’ve all heard a version of this story:  a firm knocks the ball out of the park for a few years in a row, AUM flows in, complexity grows, performance falters and assets flow out as quickly (and easily) as they funded. In the intervening years of heady asset growth, most firms tend to focus on “making hay while the sun shines" because client demands are minimal and the threat of client loss is not omnipresent.  It is not until performance turns that firms generally focus on the need to truly service their clients and understand their needs.  If this work is done when performance is good, experience (backed by studies from Greenwich Associates among others) has shown that client retention can be much more successful during periods when performance falters.

  5. Economics Support Dedicated Service – Given that the cost of acquiring new assets is substantial and the business cost of client loss is even greater (both reputational and through asset and revenue replacement) it makes sense that the effort expended to maintain clients (client service) should be equal to that of new client acquisition (sales). As indicated above, a strong client service program, if done in conjunction with a strong sales program, can both grow assets while at the same time building relationships that help to protect against client departures in times of stress.

Regardless of whether you are a start-up looking to develop a service culture, or a substantially sized company that want to ensure that projected growth doesn’t impact your established service culture, Sequoia can help you strategize on structure, processes and implementation strategies.