Most businesses would agree that corporate culture is a vital component of their success, but their understanding of what culture is, and what purpose it serves, might differ markedly. We believe that it’s possible to make general statements about culture that are relevant to many companies—no matter how each one defines its cultural contours.
One definition of culture, for example, is the beliefs and attitudes that reflect a firm’s values and shape its behavior and that of individual employees. Many firms might also agree that culture helps drive their businesses—infusing their commercial strategies with a sense of purpose derived from core values—while also driving talent attraction and retention.
Implicit in these ideas is that culture is the enduring framework that keeps firms focused on core values over the long run, providing continuity across market and financial cycles. A strong culture and values framework helps firms adapt while staying true to their core beliefs. There’s a necessary balance—and constant interaction—between a firm’s traditional values and more dynamic forces. Strong cultures continually check—and, if necessary, adjust—their bearings to stay on course.
Culture, in other words, isn’t static: it evolves.
A Dual Approach: Bottom Up and Top Down
Many firms likely articulate their culture and manage its evolution differently; we believe that combining bottom-up and top-down dimensions can be powerful. Bottom-up elements emanate from a firm’s core value and are expressed in interactions with clients and other stakeholders. The top-down dimension comes from senior leadership, including human capital leaders and the structures put in place to disseminate and perpetuate values across a firm.
There’s a common thread through these two approaches—people. At all levels of a firm, employees must be encouraged and incentivized to embrace the culture and model—and the behaviors they require. That’s true with respect to colleagues, clients and other stakeholders. All these elements are crucial in helping firms define and articulate their cultures and manage their ability to respond dynamically to changing conditions.
We’re by no means unique among asset managers in claiming that we put the client first in all we do, and we don’t see that claim as a differentiator. Instead, it’s something that defines us—a goal we aim to meet every day. One way to do this is by invoking “the client in the room” perspective: when a decision needs to be made, imagine the client sitting across the desk. It’s a great way of thinking about the client’s perspective, particularly when making important decisions.
The depth with which the “client first” principle is ingrained in our firm reflects our origins as a private-wealth-management business, so it’s an element of our culture that has endured. It might seem to be a narrow priority, but only in the sense that a headstream is narrower than a river. We believe that everything should flow from it: what we do, how we do it, and our sense of who we are.
Putting Culture Carriers in the Spotlight
In our view, the key to disseminating core values firmwide is aligning purpose, strategy and culture within and across all teams and business units. Alignment doesn’t just happen—it needs to be a key focus of the top-down dimension.
For example, cultural leadership—defined as a “focus on promoting AB culture and demonstrating inclusive behaviors” and “behaviors consistent with the values of the firm”—is one of the five pillars of the AB Leadership Framework that we use to evaluate employees’ performance and determine career advancement.
Culture carriers—those people most willing to openly embrace and advocate for the firm’s culture and lead by example—play a crucial role. We believe they need to be front and center, with enhanced visibility within the firm: they transmit their commitment and passion to others through day-to-day interactions; increasing the audience amplifies that effect.
Beyond the day to day, it’s important to tap the passion of culture carriers and leverage it more broadly by creating a top-down mechanism through which they can develop initiatives to infuse culture throughout a firm and enhance it over time. Members should bring different perspectives including backgrounds, skills and functions within the firm, emphasizing diversity and inclusion.
That’s the goal of our Culture Advancement Team, which includes Human Capital professionals who are central to integrating cultural values into every aspect of recruitment, talent development and retention. Human Capital is a key influencer because of its far-reaching influence on people: recruitment programs, training, performance assessment, career development and communications to guide employees. All these aspects are critical links between cultural attributes and people.
Cultural Continuity—and Evolution
As mentioned earlier, a culture’s ability to adapt is as important as the ability to perpetuate culture. Every firm’s culture is unique, but heritage can be a powerful influence and stabilizing force even as a firm evolves over time.
If we turn a lens on own culture, a team ethos stemming from an institutional investing heritage not only continues to shape our investment process but also helps us embrace, and benefit from, workplace developments from social change. Portfolio managers and analysts are challenged to contribute their talents and views, but the emphasis is on the investment process—not individuals.
Portfolio managers ensure lively, intellectually rigorous discussions that we believe drive more informed investment decisions with higher conviction and better results—driven by diversity and inclusion. This is a single example of investment teamwork, but in our view the principles extend to all collaborative efforts across many functions, firms and industries.
Diverse Perspectives Foster Better Decisions
We’ve written elsewhere about the benefits of cognitive and gender diversity in asset management, and their potential to drive better decisions and investment performance. As we point out in our internal training programs, “Diversity is being invited to the party; inclusion is being asked to dance.”
We firmly believe that diversity can help build stronger investment teams, bringing together people with a broader range of viewpoints than might otherwise be heard. But diversity won’t work unless culture is inclusive, too—people should feel safe and free to express dissenting views, in the interests of achieving a better outcome for clients.
It’s also important that there’s alignment between the stated culture of AB (how we represent our culture verbally, on social media, and within and outside the firm) and the experiences of employees and clients who work with us. If we say we’re a meritocratic culture, with a strong sense of personal accountability and with inclusion a priority in all we do, our employees’ feedback needs to mirror their experience. They should feel that this is an organization they belong in.
Research from Coqual, a global advisory group, helps us understand that belonging at work means that employees feel visible and seen for their unique contributions, connected to coworkers, supported in their daily work and career development, and proud of the organization’s values.
In modeling this aspect of our culture, portfolio managers can ensure better team conversations and, potentially, better outcomes for our clients. Our diversity and inclusion practices are also an important way in which we are positioning our culture, and our business as a whole, for continued long-term relevance.
Backing Up Cultural Commitment with Action
Company leaders need to continually instill cultural values in the actions they take: infrastructure, leadership design and frameworks and the execution of key initiatives should be constantly guided and monitored so that they align with—and promote—cultural values. Every firm—no matter what industry—needs this alignment to succeed.
Actions we’ve taken to instill a robust diversity and inclusion infrastructure include a commitment to create a more racially diverse board, social-outreach projects in local communities and employee resource groups that reflect and nurture the humanity of our colleagues in whatever way it’s expressed, whether through ethnicity, gender, sexuality or any other interest.
We recently added our Head of Diversity and Inclusion to the firm’s operating committee to bring that critical perspective to our strategic decisions, and we strengthened the committee’s insights into client focus and different aspects of leadership by adding our Asia Pacific CEO and Head of Human Capital.
Relocating our global headquarters to Nashville, Tennessee has required us to impart our culture to many new employees, often drawn from outside the firm’s traditional geographic scope. Culture has been a source of continuity, a platform for future development and a resource for attracting a broader talent pipeline. We’ve prioritized sharing and evolving our culture through a sense of community, values, community commitment and the accessibility of senior leaders.
Resilience and Flexibility: Keys to the Future
A corporate relocation is certainly an example of the need for cultural adaptability combined with resilience. The global COVID-19 pandemic has also put the cultures of many businesses to the test—particularly with the imperative of adapting quickly while reinforcing cultural values. Our experience is likely similar to that of many other firms.
The amount and speed of communication intensified, and a strong sense of culture was required to ensure consistency of message, action and intent: from office closures, remote work and travel restrictions to the rollout of new wellness programs to help employees cope with the crisis. Continuity teams needed to stay on top of local government policies and travel restrictions while communicating the changes to employees.
Managers needed to trust their employees to manage their work and personal lives in a way that many never had to do before, and employees needed to trust that their senior leadership and management teams were making firmwide decisions about strategy, technology and business performance that would positively impact their experiences—and those of our clients.
All of these actions needed to align with what employees expected of their culture—and what clients looked to us to provide. For that to happen, culture needed to inform our communications about everything from investment performance to market insights and shared perspectives on how to adapt to an unprecedented environment. The only way to ensure consistency of actions and messages from so many different sources was to rely on common cultural attributes.
Challenging though the experience has been, the pandemic has reinforced for many firms the importance of culture as a critical strength to weather adversity. Culture also needs to come through in helping all of us shape our vision for a post-pandemic future in which workplace flexibility and the resilience of teams and individuals are likely to be more meaningful than ever.
