As the head of J.P. Morgan Asset Management Americas, Ronald R. Dewhurst has an obvious mandate: delivering good investment performance and increasing assets under management.
And according to Mr. Dewhurst, who stepped into the newly created position in February, the key to that goal is equally clear: delivering "a stimulating and exciting workplace for our employees."
It sounds simplistic. But without that base, Morgan cannot meets its goals of boosting mutual fund sales, adding products, and reaching a broader audience, Mr. Dewhurst said.
Morgan, like many large firms, has lost employees to dot-coms, hedge funds, and start-ups. Over the past year-and-a-half, its U.S. investment management arm - which includes private banking - has lost about 25 investment professionals, ranging from analysts to senior portfolio managers. (Some of those employees were fired, a spokesman said.)
"The differentiating factor in the next decade for people in the business we're in is the ability to energize, enthuse, and retain intellectual capital," Mr. Dewhurst said.
Morgan brought him to its home office in New York largely to focus on people management, transferring him from London, where he was head of European cash equities. In his new job, managing director of J.P. Morgan Investment Management Inc., he oversees marketing and investments in the United States and Latin America, including mutual funds and pension products but not private banking.
"I'm the catalyst or the coach," said Mr. Dewhurst, who, in fact, once coached the Olympic track and field team for his native Australia. "My job is to be as useful as I can be to enable the managers any way I can enable them."
If investment managers want Mr. Dewhurst to sit in on client meetings or discuss new products, for instance, he is happy to oblige. But much of his time is spent building better communication channels within Morgan, he said.
Mr. Dewhurst's initiatives over the past four months have included a series of cocktail parties for different divisions, "town hall" meetings with staff, and an Intranet suggestion box. Mr. Dewhurst said that he responds to every suggestion personally.
"They're all little things," but added together they make a big difference, he said.
All of which sets the stage for more substantive pursuits. Over the past few years, Morgan has made a significant effort in its investment management division, which "hadn't been producing the sort of returns they wanted," said Raphael Soifer, a former analyst with New York-based Brown Brothers Harriman & Co., who now heads a consulting firm.
Morgan has been "remaking" itself by broadening both its client base and product base, Mr. Soifer said.
In March, for instance, Morgan introduced Morgan Online, an Internet-based private banking and brokerage account with a $10,000 minimum investment. Morgan's 45% stake in the fund company American Century Investments of Kansas City, Mo., gives it access to a broader product range and a line to less-wealthy investors.
While the core of the American Century relationship has been retirement services, the firms sell each other's mutual funds and are working on setting up a referral process. For instance, American Century could steer a retiring 401(k) client with significant assets to Morgan for investment services. Future plans for the relationship entail selling American Century's mutual funds through Morgan Online, Mr. Dewhurst said.
Mr. Dewhurst also wants to increase Morgan's mutual fund business, which currently accounts for about $50 billion of assets under management, up from $20.1 billion at the end of 1998. On March 31, Morgan had $375.9 billion of assets under management worldwide, including $207.5 billion managed in the Americas.
Mr. Dewhurst said he plans to increase distribution - for instance, by selling the funds through Morgan Online - and introduce new products, such as global and sector funds. Morgan will also continue to expand its line of alternative investments, such as private equity and real estate funds, which should help it appeal to a wider range of investors, Mr. Dewhurst said.
Kurt J. Reisenberg, a managing director of the Washington consulting firm VIP Forum, said that investment companies need to offer a broader array of products. But they also need to find a way to distinguish themselves from competitors at a time when investment products are becoming commoditized.
Mr. Dewhurst said that Morgan can differentiate itself by building investment products on strengths elsewhere in the company.
"What we do well can be syndicated to a wider universe," he said. For example, broker-to-broker research "is also well suited to mutual fund products."
David Ross Palmer, a senior consultant at Northbrook, Ill.-based LoBue Associates Inc., said that Morgan's biggest challenge now is to sell itself to a new breed of customer.
Because more millionaires are self-made, investment firms that serve the very wealthy need to target prospects who are still on the way to becoming wealthy, he said. Otherwise, those clients will have already forged relationships with other firms.
In addition, technological advances mean that many investors expect more immediate service, he said. "You've got to change the mindset and culture of the organization, and that's a brutal job," Mr. Palmer said.
Mr. Dewhurst agreed, adding that Morgan still has some work to do as far as changing its corporate mindset. "I don't think anybody is where they want to be," he said. "But we're dramatically better than we were a few years ago."
Referring to Morgan's employees, he said the company has "to be better at taking a risk on people - pushing down responsibility. If you don't take the people risk, all you're doing is training them for someone else."
What's important is "for the organization to appear to be receptive to making innovative and speedy decisions," Mr. Dewhurst said. "You don't want people coming in with a great idea and then six months later nothing's happened."