using purpose as corporate strategy
DESCRIPTION
Christopher Tan, Chief Executive Officer and Founder of Providend Limited, an independent private wealth and investment management firm in SIngapore, presented on "Using Purpose As Corporate Strategy" at Warwick Business School 16/02/2009TRANSCRIPT
Using Purpose As Corporate StrategyBy Christopher Tan, CEO Providend Ltd, Singapore
my objectives
How we use Providend’s purpose to permeate the entire organization
How failure in adhering to our purpose almost killed us in 2009
How adhering to our purpose ultimately saved us
who is providend?
We officially started on September 11th 2001…
11 September 2001, 8.46 am. 1st 767 Jetliner hit North Tower11 September 2001, 9.03 am. 2nd 767 Jetliner hit South Tower
9.59 a.m. : South Tower Collapsed
10.28 a.m. : North Tower Collapsed
Our Plans Collapsed Too!
The Situation: 2001 -2003
Macro environment 2001-2003
No license governing financial planning
Financial Advisers Act to be passed in September
An ageing population that lacked planning
Mis-selling and poor image of “financial planners”
Microenvironment 2001-2003
Insurance companies & banks
All commissions based
Individual advisers of low competence
Providend’s Purpose Statement
Making wise financial decisions affect so many aspects of a family life
Having money provides possibilities for a better quality of life. On other hand, the lack of it create limitations that can sometimes break families
In an environment where products are being sold everyday, and many times, through poor financial advice, families make poor financial decisions
As a family of people driven by passion
We exist to serve our clients to fulfill their dreams and achieve their family goals by providing them with the most honest, independent and competent financial advice. We believe the best way to do it is through time-tested, prudent and holistic financial solutions, even if it means to be different.
We strive to be the light of the financial world
This is what drives us
This is why we exist
This is our purpose
Providend’s Tagline
“A Family Serving Families”
How our Purpose Permeated The Entire Organization
PurposeH.R.
Finance
Ops
Marketin
g &
CRMAdvisoryInvestment
Compensatio
n Model
PCFE
Compensation Model
“Honest & Independent” Advice: Fee –only
Fee-only determined our target market
Advisory
“Independent, Competent & Holistic” Advice:No restrictions to product range
Comprehensive & integrated financial planning advice
Team-approach
How our Purpose Permeated The Entire Organization
Advisory Model
Initial Contact
Quarterly to Yearly Review
45-day Meeting
ImplementPresent Solutions
Presenting Value Proposition
Present Findings
Discovery Meeting
CFP™Coherence of Financial Strategies
CLURisk
Management & Insurance
CFAWell‐
Researched Investment Strategies
CPATax‐Efficient Financial Strategies
TEPLegal Aspects of Financial Strategies
Investments
“Competent” Advice: Experienced investment committee“Time-tested & prudent solutions”: Asset allocation, no market-timing, staying invested, keep investing, simple easy to understand and low-cost instruments
Finance & Operations
“Honest & advice” - Commissions rebate and zero-commissions product manufacturers and platforms
How our Purpose Permeated The Entire Organization
Human Resources
“A family of people driven by passion”“Honest, independent & competent advice”“Even if it means to be different”“Be the light of the financial world”
Academically and professionally qualified consultantsCharacter of integrity Prepared to be differentPassionate about our purpose more than compensation
How our Purpose Permeated The Entire Organization
Providend Centre of Financial Education
“Being the light of the financial world”Books
Financial literacy classes
Work with MAS on financial education
How our Purpose Permeated The Entire Organization
Marketing & Client Relationship Management
“Light of the financial world”: Articles“Honest & independent advice”: Asking clients permission for sponsors for client events Staff alignment: Orientation training on PurposeYearly retreat case studies“A family serving families”
How our Purpose Permeated The Entire Organization
The Providend Home
Christmas 2006
Coffee at Home
Revamp Website
The Financial Crisis –September 2008/2009
We almost died in 2009
Breaking the “prudent rule”
Went into MENA sectorUsing a newly set up global bond fund
Breaking the “time-tested” rule
Holding off investments early 2009
Breaking the “holistic financial solutions” rule
We were overly focused on investments
Everything started to collapse
31st December 2008: $160 million AUM
Cash flow difficulties
10% of clients left
Unhappy clients
1 legal suit
Staff low morale and blame
Almost 1/3 of staff resigned
How our purpose saved us
All these years of passionately pursuing our purpose kept us alive
We kept our key peopleWe apologized
We reminded ourselves of our purpose
We rededicated and persevered
We recruited new evangelist
How our purpose saved us
All these years of passionately pursuing our purpose kept us alive
We kept 90% of our clientsWe met up with clients more during the last 12 monthsWe sent more updates and I wrote personal lettersWe organize more client sessionsWe went back to each clients and realigned their financial plansRecent annual client conference: We admitted our loss of focus and shared what we are doing to improve process and re-committed to clients
How our purpose saved us
All these years of passionately pursuing our purpose kept us alive
We attracted 2 new shareholdersA very senior and prominent person in SingaporeA senior MD from an international financial institution search us out from UK
All because they like our firm and believe in our purpose and storyInjected capitalAdviceMentored meGave us hope
Conclusion
Who is the guardian of the organization’s purpose?
The Chief Executive Officer!
Thank You!