Leadership in Covid-19 – Phil Clark, Aegon Asset Management

We are delighted to bring you another instalment from our Leadership Interview Series. Today, we are here with Phil Clark, Global Head of Real Assets Equity at Aegon Asset Management. Aegon Asset Management is a global, active investment manager with €352 billion assets under management worldwide.

Phil has had a distinguished career in the city and in property with over 30 years’ industry experience. Phil is a former Chairman of the Investment Property Forum, a current member of the RICS Commercial Property Forum and has been co-chair of the Property Industry Alliance Debt Group since 2008, which represents the industry to the Bank of England, FCA and Treasury on matters of property debt.

Here are some of the insights he shared with us on leadership and his experience of leading real assets teams across both public and private markets during this period:

Amanda: Thank you for taking part in the leadership insight, Phil. We’re delighted that you have decided to take part.

Phil: “It’s a pleasure Amanda.”

Amanda: So first question:  given the size of the operation and office-based nature of most asset management firms, how was the initial transition for the business from office based to remote working?

Phil: “We have 26,000 employees across Aegon and within the space of a week we managed to move everyone to remote working. This was a phenomenal feat and in terms of the global operations it is important to recognise an amazing job well done. There has been an equally amazing response from the workforce who have adapted and adopted this new normal. A positive outcome in difficult circumstances. We had been monitoring the situation very closely and scenario planning for several weeks. We felt well prepared and ready to implement the necessary changes in a timely manner. From a trading / investment perspective, we have been tracking developments at every stage since the first reporting of the Covid-19 virus in Wuhan in December 2019.”

Amanda:  It is a difficult time for everybody, what have been the priorities for you as a leader of a large division of the business since the outset of Covid-19?

Phil: “The one key priority has been protecting and putting people first (investors, employees and all our stakeholders).  In terms of running an investment business, it has been about our fiduciary responsibility. We have been asking ourselves what Covid-19 means for our investors? What is the downside risk, I.e. how do we protect our investors? Then from an operational sense we need to make sure that our process and offer to clients is seamless. On the listed side, the effects rippled through first with markets falling over 30% and therefore efforts were focused on managing this volatility and repositioning portfolios accordingly. At asset level, the risk management of rent collection has been a considerable challenge, as with businesses being closed (whether retail, offices, hospitality etc) rent is often not being paid. Across the industry, we are currently seeing rent collection rates vary significantly across sector, from 12-13% in leisure at one end of the spectrum, 30% in retail and 95% in industrial and logistics at the other end of the spectrum. As a leadership team we strongly believe that how we and people act now, will be remembered by everyone we interact with in the future. It is vital that we put people first and act with empathy and integrity. It is important that communication and messaging is consistent throughout everything we do and all our interactions.”

Amanda: I totally agree, this is such a watershed moment. What employees and investors want and expect from financial institutions has shifted in recent years and this period will only serve to accelerate this trend.  It is so refreshing to see more organisations looking to lead with a purpose and genuinely seeming to care about the workforce, environment and wider society.

Amanda: What are some of the policies you have introduced in the effort to preserve and / or evolve the workplace culture?

Phil: “Within real estate, I have been setting up one on one calls with every member of the team. Above anything else this is to check in on their wellbeing. The first two questions that I always ask are: Are you OK and are your family and wider community OK?  The second piece is to understand how they are finding the transition, so that we can get a proper handle on how this is impacting day to day business. The senior team are having weekly strategy VC’s and at team level people are having daily or bi-weekly VC’s and are meeting up socially over VC. Skype and Zoom have been the two most utilised platforms. The business has used both technologies for a while now, so this has not been much of a transition or change. We have also been distributing key messages from leadership to all employees through online channels in a written format. Our view is that it is the most efficient way of providing everyone in the business with an honest and open assessment of a developing situation in a timely way. We also have a learning centre portal where resources and guidance are shared and can be accessed.

It has been fascinating to see how across how people seem to be communicating a lot more regularly than they did previously. From a personal perspective, I have found that I can pack many more 30 minutes style calls / VC’s into my day. The face to face equivalent would have taken up 1hr-1hr30mins of my day. Although fantastic in many respects, I have found bouncing from call to call demanding on energy levels. Learning when to step away from my desk and take time out, whether to exercise or have some downtime has been important. I encourage my team to also discover what works for them in order to safeguard their mental health.

Amanda: Next question, from a people agenda, what have been the major challenges for you?

Phil: “The sense of unknown, as every crisis is different and it’s very hard to predict how this is going to play out and what this will mean for us as a business. From a leadership perspective we need to make sure that we strike the right balance when it comes to employee engagement during this period. People are in different personal situations and we want to make sure that there are enough forums for people to interact if they wish to,  but equally not putting people under pressure to feel they need participate or even over communicate in this situation.

Amanda: What key learnings do you think you will take away from this period?

Phil: “I’m trying to get my team to look beyond the here and now, as in my experience of periods of crisis such as these, people tend to become too fixated on the current challenge and this is amplified by fear of the unknown. I want the business and individuals to personally focus on how they are going to get ahead and position themselves when we get to the other side. As an investor, I’m always thinking about both sides of the coin – downside and upside.

As to specific learnings leadership wise, the critical importance of leadership is getting the communications messaging right. Leading with empathy and giving people emotional support through an unknown experience. We are all in unchartered territory but there are some parallels between other crisis I have worked through such as the dot com bubble and global financial crisis (GFC). I’m acutely aware that some of my team joined the workforce post GFC and have never experienced any sort of financial crisis. It is important to remind people that this is not a permanent state and the sun will come out tomorrow. The speed of response around identifying where the key risks are has also been key.

Amanda: Also, any thoughts on what this means for the future?

Thinking ahead, I’m of the view that there will have to be more risk scenario planning at every level across government and the corporate world so that we are more prepared as a global economy. Secondly, more focus on the security risks around the supply chain (in a disruptive rather than military sense) as there are different risks coming down the track. Finally, the resilience and robustness of businesses has and will continue to be tested and a number are going to struggle moving forwards which will mean that we will see marked changes across the landscape as we know it today.”

Amanda: “Finally, what do you hope will change?”

Phil: “I hope that we will all travel less as a business community. We have crossed the rubicon during this period and it has become clear that we do not need to travel as much as we previously thought.

Thank you again to Phil who kindly gave up his time to provide us with these insights.