Call of duty

Taking MMI forward

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In 2017, Hillie Meyer was in active retirement after a long and successful career, while Jeanette Marais occupied the high-powered position of executive director at Allan Gray. The last thing either of them expected was to be where they are now – respectively CEO and Deputy CEO of MMI, the insurance group created by the merger of Metropolitan and Momentum. However, when the board approached them to help turn the group around, it was a call of duty for both of them.

Both Meyer and Marais have a long-standing association with Momentum – she began her career there during his tenure as CEO (1996-2005), when he led the company to unsurpassed financial performance. No surprise, then, that they share a profound sense of coming home to a culture that they love.

“What I enjoy is that it feels like coming home,” says Marais. “We have fantastic people who love the company. There is a strong culture that wants to win, a culture that cares about advisers and clients. Winning organisations are formed because you constantly, every day try to do things a little better. I see that at MMI”

Says Meyer: “I spent the best part of my working life here, and when I was approached by the board and I actually began to understand the gravity of the situation, I could see that I could come and make a difference. The company was looking for fresh leadership – if I could play that role and make a difference too, why not?”

That said, Meyer and Marais are under no illusions as to what lies ahead. Last year’s MMI results were decidedly lacklustre, with headline earnings remaining below 2013 levels and new business declining in value to the tune of 25%.

“It’s quite obvious that the Group hasn’t been firing on all cylinders for a while,” says Marais, “So we are acutely aware of the challenge. At the leadership level, the challenge is to simplify things. There’s a lot of complexity in our business that doesn’t always help to get us closer to our goals or closer to our clients.”

Meyer nods: “The bottom line of the matrix structure implemented in 2014 is that there are lots of inter-dependencies, hand-offs and centralised decision-making. That kills execution. It’s like a construction company where everybody is so focused on their separate roles—bricklaying, painting, plumbing, and so on – that they lose sight of the fact that they’re building homes for people to live in.”

Meyer continues: “Our SA-based staff had nothing to do with some of the problems and challenges at MMI. Rather, they were top-down decisions—expensive projects in Africa and the UK that were not our core expertise—that caused the systems back home to be neglected. For quite some time, in some of the businesses, we haven’t spent enough money on technology.”

Marais picks up, “Your advisers, your clients, experience what it feels like when you’re not keeping up with your investment in technology. You fall behind, your competitors out-perform you in terms of service and product, and then your advisers, who’ve been incredibly loyal to your business, read about all the wonderful things happening in the rest of the world, and the business looks neglected. Certainly, my focus in terms of the portfolio I look after, is literally getting our hands dirty again and fixing that part of the business.”

In terms of execution, Meyer and Marais complement each other’s strengths.

“We share the same thinking but we are also very different in how we execute some things,” says Marais, “which makes us a really good team. Hillie leads by asking really difficult questions and getting people to find their own answers. I often drive harder to reach a decision, to get to a point where we can start executing things.”

Meyer smiles in agreement.

Simplify and execute

Fixing the business begins with simplifying the structure in order to put people first.

“We want people to be heard again,” says Marais. “There’s a big focus on building relationships with advisers again, to regain lost support. Then, we were amazed at how frustrated our staff have been because they couldn’t make decisions, didn’t feel that the right decisions were made, and didn’t feel that they could influence decisions. Consequently, we’re simplifying the structure. It’s a big decision, it’s going to be far-reaching, and it’s going to cut into the organisation, but it has to be done swiftly. We have to find the right things to do, execute, and free the staff to be accountable and do what they need to do.”

“Empowering means you have to devolve decision-making,” Meyer affirms. “This means sorting out the structure that encourages this state of affairs, then leaving people at the coalface to get on with the job they know best.”

Embracing change

Times have changed since Momentum’s “golden years". “We have to get used to the fact that if revenue growth is in the high single digits, you’re actually doing quite well,” says Meyer.

“There’s going to be a lot more focus on cost and efficiencies. Then, too, the competition is a lot tougher – not in distribution areas but also with regards to product. Most of our competitors have a full suite of products on offer – everybody is trying to eat somebody else’s breakfast.”

Marais agrees: “If the market is not growing, your market share can only come from your competitor. We have to be very precise about what we do and how we do it. We can’t afford half-measures or mistakes.”

“We also need to embrace changes in technology,” says Meyer. “There’s a perception that technology is a threat to independent financial advisers, for example, but it’s not. Instead, it will change the way independent financial advisers actually deal with their clients and deal with companies that they do business with.”

Technology also goes hand in hand with service, says Marais: “In the investment space, your platform is technology-driven: you have to be efficienct, you have to do as much straight-through processing as you can, you have to avoid people touching your applications more than once, making costly mistakes that someone else has to fix. If you’ve missed today’s cut-off on a unit trust because someone loaded the wrong one, it has a material financial impact.

“We need to bring this back into focus, not only by making our platform capabilities more efficient, but also by improving service. Does the person who answers the phone actually know what they’re talking about? When I have a very specific, intricate question about my investments, I want to speak to the experts.”

Calling all financial planners

Rebuilding a footprint in the independent space is going to be a big focus for MMI.

Marais explains: “Momentum used to be known as the champion of independent financial advisers – there were no internal advisers at all. The great thing about this is that it keeps you on your toes – you’re always up to speed with what your competitors are doing because the advisers tell you.

“By focusing internally on mergers and building our agency force, we’ve lost some of that edge. Although we still have a very loyal, fiercely independent adviser base, our numbers have dwindled. We need to go out there, build new relationships, and make sure that our offering is competitive.

“As a partner, MMI is here to help and support financial planners in any way we can, because our survival is closely linked to whether we help them to be successful and build good businesses. For example, my portfolio includes Momentum Investments, and we have a fantastic suite of outcomes-based unit trust funds that advisers can use. It has predictable performance, it delivers what it says on the tin, but nobody knows about it. Now it’s a matter of actually getting the word out there again.”

Taking the conversation forward

At the end of the day, MMI has much to be positive about. As Meyer points out: “In addition to our independent financial advisers, and our own advisers in the affluent market, using the Momentum brand, we also have the Metropolitan brand, which is very strong in the emerging market. That’s quite an advantageous position to be in, because the dynamics and the pressure points in the two market segments are quite different. That’s very different to when we were here before and I’m very pleased that we cover these two segments.”

“We’re lifting our heads up again,” affirms Marais. “The narrative in the business had become the merger. Now we’re sorting things out internally and we’re looking outside to our clients and our advisers—we want to be right out there, in front of them again.”

“We’ve changed the conversation,” Meyer agrees. “We’re talking products, product launches, growth, new sales. Having said that, the market is not easy. The jury is out, we still have to deliver, and we’re conscious of that.” ■

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