Revel Wood (ONE): Focus, the secret to success
Revel Wood, a founding partner of ONE group solutions, says the word “focus” means different things to ONE and its clients. By outsourcing non-core activities to ONE, clients can focus on their core business. ONE’s focus is on finding solutions that can improve their client’s governance, regulation and reduce costs.
As Gary Player said, the more you practice the luckier you get, and we have been very lucky at ONE with exceptional growth, a great team and marquee client base, but this of course is through practice – repetition on a very focused business model. We are first and foremost a solutions provider, governance solutions focused and not spreading ourselves thin trying to do everything for everybody.
Why Focus on core business?
The fund management industry is no longer an old boys' club. Today fund managers have to concentrate on the growing burden of regulation, governance, and pursuit of margins to meet the expectations of performance, transparency, and value for money. Meeting these expectations requires resources to be focused on front-office systems like research, digitalization, and portfolio management. Managers cannot waste resources on non-core, marginal activities like compliance, risk management, vendor and delegate oversight, and corporate secretarial that contribute to cost without improving margin or value added to the client. Indeed, fund managers' underinvestment in marginal functions, that are not core to their strategic objectives, can have the consequence of raising regulatory and operational risk.
“Firms need to get off the complacency chair and embrace the next evolution in business, namely margin sourcing”
Have fund managers dealt successfully with the burgeoning back office?
Historic lack of focus on back offices has resulted in complacency with siloed operating models, inconsistent data, incongruent reporting, and a lack of investment in automation. Over decades, burgeoning back offices created administrative quagmires from which it became difficult for fund managers to extract themselves. However, hopes of gaining efficiency, reducing cost and risk through outsourcing delivered mixed results. Firms failed to focus on the underlying cause, the lack of margin. Instead, they moved the problem geographically, administratively, or in terms of scale. They offshore, nearshore, or migrate activities to other firms that use a range of outsourcing processes or attempts to achieve scale. Meanwhile, firms lost sight of the impact on teams’ morale, and the most valuable assets of all business namely their people and their clients.
How can the focus help companies reduce risk, improve margin and morale?
Firms need to stop wasting time on marginal and margin-sapping activity. They need to get off the complacency chair and embrace the next evolution in business, namely margin sourcing. Firms should focus on getting rid of marginal activities and adopting an approach that achieves better margins and returns. Their teams will become more motivated. There will be focus on delivering clients’ needs instead of diverting attention to the myriad of non-core operational issues. Finance directors and tech teams will be able to focus spending to deliver client excellence, automation, and a more motivated team. Margin sourcing starts by removing marginal and costly activities to improve margins, investor outcomes, team morale, and a long-term sustainable business.