Earning and sustaining trust in the age of AI

0:02Andrew Schlossberg: Hey, Roberta. Hey, Lucia. Today we're going to hear from Andrew Schlossberg. He's the president and CEO of Invesco. He had a super wide ranging conversation with Eric Kutcher, our North America chair. And one thing Andrew said that I found really interesting was that AI can't be a separate strategy. It needs to be embedded in any company's strategy. Totally, totally. I also like this point that he made about how to build trust in organizations. Fundamentally, it all comes down to consistency. Yes, I liked that one too. And it makes so much intuitive sense, especially now when things can seem so topsy-turvy.

0:46Andrew Schlossberg: Right. There are lots of nuggets in this conversation. Let's get into it. Let's do it.

0:59Andrew Schlossberg: I am again joined by a good friend and an incredible CEO, President and Chief Executive Officer of Invesco, Andrew Schlossbury. Andrew, it's great to have you here.

1:09Eric Kutcher: Thanks a lot, Eric. Thanks for having me. I appreciate it.

1:11Andrew Schlossberg: Wonderful. You lead one of the largest asset managers. There's a lot that's going on in the markets right now. How do you think about the role that you play for your clients in this volatile world?

1:23Eric Kutcher: We have a really wide range of clients. There are a couple of common denominators, but there's a lot of difference as well. I mean, one thing that I've found over the last six to 12 months is kind of this comfort level with uncertainty and volatility that we haven't seen in the past. Typically, people would run or a very brave set of people would do something. And I think now there's just a comfort level with, you know, the certainty of things being uncertain. I think some of the things that are going on as well, though, is they're still holding cash. So there's a fair amount of dry powder to do things like the SpaceX IPO or other things where there's capital to deploy when there's good opportunities.

2:00Eric Kutcher: The only other thing I'd say is people have been really concentrated in what they've been holding. And so one of the big pieces of advice is age-old advice, which is to look at your portfolio, make sure it's diverse, and make sure you look at not just the first derivative, but the second derivative of what you hold so you don't look like a U.S. tech portfolio only.

2:18Andrew Schlossberg: You've been in this world of asset management for quite some time. How has this world evolved? Let's kind of look at it up until this point. Then I have a question afterwards about how do you think it's going to evolve in the world of AI?

2:31Eric Kutcher: Look, the asset management space has changed a lot, you know, the 30 years I've been in the space. But at the same time, it comes back to some basic principles. I mean, people do, you know, trust matters, you know, and integrity matters. And at the end of the day, you have to deliver investment quality for people. So fees are always important. You know, having great innovative products are always important. But if you're not doing it consistently, it doesn't much matter. And the other thing I've learned over the 30 years about the asset management space that hasn't changed very much is people like to talk about this a lot, but they really dread having to work on their portfolio.

3:12Eric Kutcher: I mean, I think it ranks down there with like planning my funeral and going to the dentist and these sorts of things. So it's popular to talk about, but it makes people uneasy to have to think about their investing.

3:23Andrew Schlossberg: For what it's worth, I am one of those people. I like to leave it with someone and then I literally don't want to touch it and don't want to be bothered. It's much, much simpler. Yeah, definitely. So if you think about AI, right, how is AI going to change the world of asset management and wealth management more broadly?

3:41Eric Kutcher: Yeah, we talk about it from an investment standpoint, but from a client standpoint, you know, I think it's just raised the bar of expectations that people want everything and they want it now and they want it to be hyper personalized and customized. And that's not just asset management. I think that's almost every industry. And the tools are empowering us to be able to do it. We're a people business. You know, so we're not looking at this as replacing people. We're looking at this as augmenting and making us better as investors or engaging clients. I don't think people are looking to replace their wealth manager, replace their asset manager with AI.

4:13Eric Kutcher: But I think their expectations on what those folks should achieve have gone up. And so that's how we have to really embed it into what we're doing. Stay ahead.

4:21Andrew Schlossberg: In that world, how's the customer? I think back to, I'm going to date myself now, but when all of a sudden you had this thing called WebMD. And I, as a consumer, could self-diagnose, which by the way, I think everyone is now doing even more of the various frontier models. I got to believe people are doing the same thing and then coming to you with a view of, well, this is what I should be doing. How has the consumer changed in terms of the level of education, their expectation, and how they're using the tools?

4:52Eric Kutcher: Yeah, your analogy is perfect. I mean, they come more informed. And a lot of times that actually helps further the conversation to really get into what do they need personally in their portfolio. I mean, I think they also show up with some of the wrong diagnosis used to sort of torture the analogy. And so you have to spend time kind of re-educating. But I think by and large, it's better. Yeah, I think the need for advice has kind of never been higher. And while we're not the advisor, we work with advisors that then help individual investors. We've only seen more demand, frankly, for more product, not less.

5:34Andrew Schlossberg: When you think, again, one of the things we talk a lot about, or I talk a lot about when I'm with other CEOs is there is sort of the individual level of productivity that comes out of AI and giving people the tool and debate the efficacy of that. but inevitably it is making us all better and having to do things a bit faster. How are you seeing the individual productivity? How does that change? And then what are the examples of how you can imagine the process or processes inside your org changing as a result of AI?

6:05Eric Kutcher: Yeah, I mean, to your point, I mean, it's an amazing, awesome catalyst, sometimes just to go from nothing to great, and a lot of times to go from something average to instigate a better outcome. I mean, actually thinking about an end-to-end process and how to simplify it is the way we approach all of this. We put the tools in the hands of every one of our employees and we've given use cases that are top-down and certainly we're working on those. But I think some of the better ones are the ones that are coming kind of bottom-up and people are just reevaluating. And so, for instance, onboarding a client, a big institutional client, can have like 25 steps in between they've agreed to do business with you to actually taking their money and investing it.

6:51Eric Kutcher: And so that's been a process we've been trying to re-engineer for a long time. And there's a lot of handholding. How do you then take it from 25 steps to five steps? And some of it's AI and some of it's just good old-fashioned process engineering. And then on the growth side and the revenue side, one of the hardest things for a fund manager to do is to decide when to sell. And so actually through advanced technology and generative AI, some of that emotion can get taken out of that and another set of eyes can challenge you.

7:22Andrew Schlossberg: All right, I'm going to turn to you as a CEO. I think you spent the majority of your career at Invesco. Is that right?

7:28Eric Kutcher: Yeah, that's right. I've been 30 years in the industry, 25 here.

7:34Andrew Schlossberg: As you've kind of grown into this role, which you've been in now for a few years, How has your leadership style had to evolve?

7:41Eric Kutcher: I mean, I've had the benefit, look, 25 years at one company, especially in my generation, is more unusual. One of the things that stuck out to me about Invesco, but I think the asset management industry, and frankly, I think any professional services industry, is that it is all about the people in the end. And the culture just really matters and really getting a handle and a feel for that. And collaboration was at the core and team orientation. So when I stepped into the CEO role, I wanted to make sure that that continued. But I'd also seen over time that I needed to adjust my style, which was from being collaborative, being, you know, building consensus, building relationships to also being able to be equally decisive.

8:22Eric Kutcher: And, you know, there's a lot that I needed to do personally, but we needed to do as a leadership team that I put in place to be able to find that balance between the two. So how was it?

8:33Andrew Schlossberg: How were you able to? I don't know how much of your team turned over, but how do you bring your team along when you went from, I'm going to say, to first among equals?

8:41Eric Kutcher: We put together a new leadership team that was comprised of some of the folks that were my peers that had been at the organization in some instances as long as me and in other instances newer to the organization. And then we brought in some some new people from outside. And then we also promoted some some folks onto the leadership team. So it really was in my first six months, a relatively new group. And what we did was, you know, we focused on that first core principle, which was team first, and then my area second. And once we did that, I think that became more infectious across the company that had been a little more silo oriented than we wanted it to be.

9:20Eric Kutcher: And then we rewrote the strategy and we simplified the org design so that we could make that collaboration and decisiveness sort of operate together. Okay.

9:29Andrew Schlossberg: So as CEO, maybe help folks think about how do you think about the role of the CEO? Like a rate and pace to change is something we, I don't think any of us have had to lead through before. So how are you moving that organization with that level of pace? And I suspect you have a relatively independent and distributed workforce who feels like they can make their own decisions.

9:51Eric Kutcher: Finding that balance between client needs, employee needs, shareholder needs, partner needs, community and keeping that all, sometimes you have to make choices, but keeping that all in balance and all towards driving outcomes for the clients, which extend that virtuous circle. That's what I spend my time on, really trying to move in and out of each of those stakeholders and making sure they're in alignment. And I think with something like AI, I think you have to resist the urge to have it completely top down and controlled. And also the urge to have it completely completely bottom-up and entrepreneurial.

10:28Eric Kutcher: And so I look at it the same way of just constantly finding the balance of letting the organization run and then knowing when to pull it back a bit. But I want it to be all employees, bottom-up, thinking about AI. And that's why we made a priority to put it in everyone's hands. I mean, this notion of trying to protect people from themselves is, I think, the wrong way to come at it.

10:49Andrew Schlossberg: Yeah. The thing that I mean, I'd be curious. I'm going to learn a lot in this conversation. I personally struggle with how do you get folks aligned to a level of ambition and then what I would argue rowing in the same direction? I know where I want them to get to, but they're going to take their own path. How do you move them?

11:08Eric Kutcher: I think there's two things that I think about in reflecting on your question, but also it's constantly in my mind. One is be clear about your strategy and don't have a separate AI strategy. have a strategy for AI that is enabling your strategy or vice versa, but it's got to be linked. And I think that becomes easier to say yes to things. And I think it becomes easier to say no to things when you're clear about your intent and that they're not two different things. And then the second thing with getting people to row in the same direction and be aligned, especially with, we have highly intelligent people at the company that have a diverse set of ideas and needs and the like, relationships matter.

11:49Eric Kutcher: And so we spend a lot of time making sure our entire employee base gets to know each other and gets to have some, you know, turns on working on things together. Because until you have those experiences, especially on things that don't go well, and you have some experience in the trenches together, you know, it's impossible to actually work through topics if you don't know each other.

12:10Andrew Schlossberg: I love that. I love both of those. I think those are real lessons, this idea that don't have a separate AI strategy, but that make an AI part of your strategy, I think is so right. It's a little bit like my point around individual productivity. If all you're doing is thinking about this as something separate, it doesn't become who you are and how you reimagine the business and how do you align. And I think this idea of trust, you didn't use the language, but I'm going to infer it. The trust build by being together allows you to move together as opposed to, and I agree with you. I realize I am sitting in my house, but it's because it's early and I've been doing it for a while today.

12:46Eric Kutcher: Sorry. No, no, you're 100 % right.

12:48Andrew Schlossberg: And I hold myself to account on this. We have to be in person. We have to be together. The presence together matters, and it reinforces that trust.

12:56Eric Kutcher: One of the things I've found over time is context matters a ton. And if you don't spend the time actually explaining and talking about the situation that you're trying to solve the problem for, everything's transactional. And I find that with our employee base a lot. If everyone's in a hurry and nobody actually takes a moment to explain to somebody what they're trying to do, they get a transactional response and then they get frustrated. And so it's just some of those basics trying to create the conditions for that to be less true all the time.

13:23Andrew Schlossberg: Yeah, I find that it's so easy to send back an email or a text or whatever other, and they're always short. And then you look back and you're like, people can interpret that. I try personally when I get a text or sometimes it's better just to say, hey, I'm going to give you a ring in a few minutes.

13:36Eric Kutcher: Yeah, yeah, exactly. Once the battle goes back and forth, it's usually controversial, right? Once it's on the third one, it's just digressing.

13:43Andrew Schlossberg: It's just not worth it. But the reality is no one intended that to happen. And if you get on the phone and you have that trust, there is just a different level of disguise. So I think it's a really, really wise recommendation. One of the things that I think is important to you is the role that Invesco plays in the broader Atlanta community. And you've made real strides. Talk about that, what you're doing, but also why you think that's so important as a CEO and as a organization? Yeah.

14:09Eric Kutcher: So our headquarters is Atlanta, our global headquarters, you know, about 40 % of the company is, is international, you know, non-US I should say. And so I offer that just as context, you know, participating in what goes on in your community matters a ton, but specifically to Atlanta. I mean, one of the things that I don't think most people that aren't from here recognize is it's a major city, but it's, but it's still small enough where it's not impersonal. And it's a major city that has so many cross-industry companies. And so when the business leaders come together, you're not really with your competitors.

14:41Eric Kutcher: You're really with folks in the energy industry, I'm in financial services, or in the consumer product space. And I think every city has that to an extent, but Atlanta is really diverse, does not have a dominant industry for being as big as it is. And then the business community works with the education leaders. We've got great universities here, works with government, works with civic leaders, and everybody kind of comes together to solve problems for the city. And I think that's kind of an example of the way we try to operate as a company.

15:15Andrew Schlossberg: That's awesome. Always a question. I mean, it is hard to imagine that communities can succeed without the support of business. that are partly because you are part of the community and partly because you can bring the things that make you successful from a business point of view and the talent. And so I think it's a it's a real gift back that you give. Yeah.

15:36Eric Kutcher: And look, we have and this isn't a political thing. I mean, we have a mayor and the mayors before that mayor that kind of have embraced that. And, you know, there's there's a group of us that and our predecessors that we meet every quarter, with the mayor, with all those other leaders, just talking about how to make the city better. And it's really fantastic.

15:58Andrew Schlossberg: Wonderful. Wonderful. I love that. I love the giving back. All right, let's talk about some of the lessons you've learned in your CEO and even before. You've worked across lots of different parts of the business. You talked about this earlier. You've been in the industry for 30 years, for an investor for 25. What were some of the pivotal moments along your career that really shaped you to be the leader you are today and the reflections on what was it about that moment that made you the leader you are?

16:27Eric Kutcher: Look, I think getting advice early, two pieces of advice early on in my career from mentors. You know, one was the slowdown to speed up. It's not slow down physically or slow down emotionally or any of that. It's not like burn yourself out. It's sometimes just you really have to be a good listener. And I think hearing that early, was pretty important. I think the other one was, you know, don't be afraid to enter situations where you're not an expert and where you have different experiences that can bring to it. So there were plenty of roles and jobs that I had along the way where I was kind of dropped into the deep end.

17:03Eric Kutcher: But I know I had mentors and people around me that, you know, weren't going to let me sing. And so I think just getting comfortable with being uncomfortable was also a pretty good lesson.

17:14Andrew Schlossberg: I'd love to dive a little deeper on both these because I think there's such valuable lessons. What are examples of ways that you slow down to speed up?

17:21Eric Kutcher: Ask questions. Don't presume that you have the answers. You know, I learned from my predecessors, you know, try to be the last to speak, not the first one to speak. Like let people, they'll share information with you. They want to be vulnerable and you have to show that in return. And so I think actually just those kinds of things, making sure you really are empathetic. And back to the comment before, if you're transactional or if you're just trying to get to the outcome you want or you want to get to yes faster, you've got to slow down for a minute. Now, that doesn't mean you shouldn't be urgent.

17:57Eric Kutcher: And I think those are two different things. So I really try to enter situations, even if I feel like I know the answer, to really give people the full opportunity to make sure they understand why I understand why they believe what they believe. Okay.

18:13Andrew Schlossberg: And then when you're dropped in those situations where I would argue that you said you don't know, right? You're dropped in the deep end. And yes, I'd love to hear how your mentors or your supporters helped you. But what are the things that you had to do in those moments to make sure you don't drown? What did you rely on?

18:31Eric Kutcher: Yeah, I mean, some of the things are a little bit natural. I mean, one, figure out quickly, you know, who you can rely on. So they're always people oriented, you know, people that are there, people that, you know, are established, make sure you figure out, you know, how to understand and how to benefit from their experiences. and then quickly decide if the other people that you don't feel like are in that situation, what are you gonna do about it? And don't belabor that too long. So I think it does come down to people. I think the other one is don't have too long of a list of things you wanna get done, especially when you get put into a new situation because you can get overwhelmed with your own list.

19:09Eric Kutcher: And so I think I tend to walk in there and sort of circle what I think the big problems or opportunities are and just try to stay as centered on it as you can.

19:18Andrew Schlossberg: Yeah, I love this last point. I think there's too many organizations out there for which the expectation is I'm only there for two or three years. And the problem with that is you have to have impact, right? I mean, at some level, the expectation is you have to have impact. And so you drive a ton of impact, which means almost by definition, you don't do what you said at the beginning, which is to go slow to go fast. And so it's a real kind of negative reinforcing loop when you think you're only going to be there for a short time. Yeah.

19:46Eric Kutcher: If you're thinking about the next thing that you're going to be doing, it's just hours you're spending not focusing on what you need to be doing.

19:52Andrew Schlossberg: You talk about being a trust business. What have you learned over the years about how do you earn trust and how do you keep that trust and reinforce that trust?

20:02Eric Kutcher: Earned is absolutely the right word. Sometimes people want to declare trust and it's like, no, no, no, it's earned. And so, yeah, I think growing up and spending my career in this industry has taught me a lot about it because once you lose the trust of your client in this, in this industry, it's very hard to ever earn it back. And, and, you know, you'll hear about stories of something that happened 15, 20 years ago. They haven't forgotten. Um, and maybe that's because it's about their money. Maybe it's, you know, integrity is at the center. So, uh, we spent a lot of time. I spent a lot of time, um, on the topic.

20:36Eric Kutcher: And I think the number one thing is be consistent. And so, you And that's a truism about investing as well. People buy our process. They buy into the people we have. The outcomes aren't always perfect. But if you're true to the process and you're true to retaining the talent and building the team and the culture, you're consistent. But I think once you break that consistency or you're not forthcoming, it's over. And so that's the thing I try to do every day. It's what I try to instill in the company and try to remind people of. CEO and your mistakes. You don't deviate. You don't follow the hot fads and trends.

21:14Eric Kutcher: You just really stay true. And I think that's pretty important. And then internally with people, we talked about it before, you have to invest in relationships because they're going to matter.

21:24Andrew Schlossberg: All right. This is a totally unfair question, but it'll be my last one. And I say it's unfair because you're relatively early still as CEO. as you think about this role and what you will do, what is the impact you want to leave behind? Okay.

21:42Eric Kutcher: You are right. It's a little early. Invesco has been around for a long time. And Invesco has been a really strong traditional asset manager for a long time. And as I've entered in, it's how do we then move to this sort of next evolution of even more modern, moving beyond the traditions, being able to keep up with things we've been talking about, AI, being able to keep up with client needs evolving and changing, markets being more dynamic, being even more international and global, new asset classes, digital assets. So being that bridge from being a great traditional asset manager to a really truly modern asset manager, and if I can be the bridge between those two and keeping the foundations and truths about the history and Not the cultural history of the place, but those things like principles on long-term investing and integrity and investment quality matter, not being faddish, blending the two of modern and tradition.

22:43Eric Kutcher: I think that's what I want to be remembered for the role that I'd like to play in my tenure.

22:49Andrew Schlossberg: Well, thank you a lot. And this was wonderful. I'm sure our audience is going to love it. Thanks, Eric.