Avoid withering on the vine

Alongside AI-accelerated cyber threats, CEOs must also contend with the rapid disruption that generative AI tools; in particular agents that have the capacity to not only improve productivity and, increasingly, handle project workflows and complete tasks unsupervised. Some industry leaders in the software technology space believe that firms who are not using agents in the next few years will simply wither on the vine.

Another set of questions for CEOs to consider should include:

Do we have the right talent internally to manage the pace of change from a technological perspective?
Do we have the right risk systems in place?
Do we have the right advisory capacity, both internal and external?

Yet AI is not simply a matter of tooling. It is, fundamentally, a talent and leadership challenge.

The question is no longer whether to adopt AI, but whether leaders have the right teams, culture and mindset to adapt at pace.

Incubating talent to handle these long-term challenges, while also recognising that younger colleagues will be better placed to understand the unique demands and opportunities of an AI-driven world, is going to be a tricky yet necessary balancing act for CEOs.

Investment professionals must evolve, acquiring new skills to leverage AI effectively. The consensus is that

AI will not replace asset managers, but those who know how to use AI will replace those who do not.

This is an era that some have described as being a combination of the Renaissance and the Industrial Revolution. Disciplined agility will favour the brave and thwart those less willing to embrace change.

Effective leadership to manage this multi-generational challenge means not only identifying the best talent within one's organisation but giving them the opportunity to apply their vision and creativity.

"We learn most from our failures. Unless you're setting a culture of boldness and challenging orthodoxy, you are going to be disrupted by others who are more adept and agile", said a globally renowned geopolitical strategist.

In a world of 24/7 news flow and data sharing, there is a lot of noise for CEOs to cut through to ensure their signal is being received loud and clear. Arguably this places even greater emphasis on leaders getting out and speaking with their colleagues across the organisation, driving home the big idea in language that resonates and motivates in equal measure.

What is most critical for future-proofing businesses?

Setting a culture of boldness
Identifying and empowering talent
Listening to end clients

Moreover, this helps CEOs identify who the best talent is across key divisions, to earmark as future leaders. One needs the nerve to delegate responsibility and allow people to grow into leadership roles. Those who struggle most assume that the attributes, the skills and the success that got them to where they are, are the right recipe for continued future success.

However, that mindset is doomed to fail as asset management firms seek out ways to remain relevant to their investors and future-proof their businesses.

A fundamental consideration of future-proofing is, quite simply, to listen to the end client.

As the executive of a large US institution remarked at IMpower FundForum:

A lot is changing; investor preferences, demographics, increasingly market volatility and macro uncertainty. What we see is a preference for fewer service providers. Therefore, scale becomes ever important because there's a certain amount of fee pressure.

Service providers need to have a strong and scalable operating platform because increasingly institutional clients are not just outsourcing their investment management, they're outsourcing their middle and back office functions as well.