“The organizations that thrive over the next decade won’t simply have better products or people or software solutions, they will have operating models that create a sustainable competitive advantage.”
For decades, operations leaders have been measured by one thing above all else: execution. We built organizations that were efficient, scalable, well controlled, and capable of supporting growth. We optimized processes, managed risk, controlled costs, implemented new software solutions, embraced new technologies, and delivered exceptional client service. Strategy was established elsewhere. Our responsibility was to bring it to life.
While that mindset served our industry remarkably well, today, it no longer reflects reality.
Investment managers, third-party fund administrators, and financial institutions continue to operate in an environment defined by relentless fee compression, rising client expectations, increasing product complexity, evolving regulation, and accelerating innovation. Organizations are under intense pressure to create greater scale, improve efficiency, reduce operational and business risk, and continue investing for the future — all while delivering a better client experience.
These aren’t temporary headwinds. They’re the stark realities of our industry. As such, operations leaders need to rethink one of the most fundamental assumptions we’ve held for decades.
The operating model no longer exists to support the business strategy. The operating model IS the strategy.
Over more than three decades leading and closely watching operations across investment managers, service providers, and now software solutions organizations, I’ve seen our industry continually evolve. Shared service centers, global distributed operating models, cloud technology, and software solutions all changed how work was performed. Every meaningful advancement required operations leaders to rethink how work was performed. And now artificial intelligence is the next evolution of this advancement.
That said, despite how impactful and important it has become, AI isn’t the strategy. It’s one of many tools — alongside technology, software solutions, organizational design, process redesign, governance, data, and strategic partnerships — that enables organizations to build a better operating model.
For operations leaders, the greatest risk isn’t failing to implement AI, it is allowing AI to remain someone else’s responsibility.
If conversations about artificial intelligence are happening primarily within your technology organization, you’re already having the wrong conversation. Future-state operating models won’t be built by technology teams alone. They’ll be built by business leaders who understand how to operationalize technology, software solutions, artificial intelligence, people, processes, governance, and data into one intentionally designed operating model that creates sustainable competitive advantage.
For years, our industry has talked about transformation, modernization, optimization, and digital initiatives. Those efforts remain important and should continue. Today’s challenge, however, is fundamentally different. This isn’t about making today’s operating model incrementally better — it’s about intentionally redesigning how work gets done from end to end.
That shift fundamentally changes the role of the operations executive.
For decades, operations leaders were rewarded for improving the operating model. We standardized processes, strengthened controls, introduced automation, and found ways to do the same work more efficiently. Those responsibilities remain critically important, but they are no longer sufficient.
Tomorrow’s leaders won’t simply improve the operating model, they’ll redesign it.
One of the most common questions I’ve heard throughout my career is, “How many people will we need if we win this business?” It has, historically, been a reasonable question — but increasingly, it’s the wrong one.
A better question is, “What needs to change in our operating model so we don’t have to answer that question the same way we did five years ago?”
That’s the leadership conversation our industry needs to start having.
This isn’t just about reducing people costs. Labor remains the single largest investment in almost every operating model, and every executive understands the importance of managing that responsibly.
This is about redesigning work so talented people spend less time performing repetitive activities and more time applying judgment, creativity, relationship management, and expertise where they create the greatest value.
Technology should automate work.
Software solutions should simplify work.
Artificial intelligence should augment work.
People should elevate work.
That’s why I believe the next generation of operations leaders won’t be measured by how many people they manage or how satisfied their clients are today. They’ll be measured by
how effectively they orchestrate human effort and all the tools at their fingertips to deliver exceptional outcomes tomorrow and beyond.
Every future-state operating model will look different — and it should. A boutique investment manager shouldn’t build the same operating model as a global fund third-party administrator. A firm competing on high-touch client service shouldn’t make the same design decisions as one competing primarily on scale and cost. The operating model should reflect the organization’s strategy, brand, client promise, economics, and long-term goals.
What shouldn’t differ is leadership. Every organization must intentionally design an operating model that positions it to compete in an environment where the pace of change continues to accelerate. The greatest risk is no longer simply operational risk. It’s the strategic risk of allowing competitors to redesign their operating models faster than you redesign yours.
The executives who define the next decade won’t simply be remembered for running operations more efficiently. They’ll be remembered for redesigning how work gets done because the decisions they make won’t just improve operational performance — they’ll influence profitability, scalability, innovation, resilience, and, ultimately, enterprise value.
Markets have never rewarded organizations for protecting yesterday’s operating model. They’ve always rewarded those with the courage to build tomorrow’s.
