CXO: Driving a customer service approach to operational excellence

The global investment management industry faces many challenges. In this recurrent CXO Corner relay column, we ask top executives to show us the way ahead, sharing their views and best practices for meeting the challenges.

Journal: Tell us a bit about Ontario Teachers’ and your industry. How have the business and key competitive differentiators transformed in the recent years?

Rosemarie McClean: Ontario Teachers' is Canada's largest single-profession pension plan with $171.4 billion in net assets. With offices in Toronto, London, and Hong Kong, our main purpose is to pay pensions and invest plan assets on behalf of our members, who comprise 316,000 working and retired teachers in the province of Ontario. Since our evolution to an independent organization in 1990, we have built an international reputation for innovation and leadership in investment management and member services.

Our employees pioneered many of the investment practices and service standards that are now common in the pension world. From the early use of derivatives, within our asset management strategy, to creating highly interactive digital services and pension statements for members, we are proud of the accomplishments of our team of people and the services we deliver. As we have continually explored the world for investment opportunities, we have seen the investment landscape become increasingly competitive for deals, transactions, and partnerships.

Journal: You’ve been with Ontario Teachers' for many years, the last two years as Chief Operating Officer (COO). Can you take us through your professional journey as COO?

Rosemarie McClean: I was appointed to the COO role in November 2014. Prior to that, I held the position of Senior Vice President (SVP), Member Services. As SVP of Member Services, the focus was on serving our external clients including the members, employers, and the formal plan sponsors (the provincial teachers' union and the Ontario government). As COO, my focus has shifted from serving external clients to internal clients. My goal was to make an early impact by leveraging my organizational experience and knowledge.

“...a COO has to demonstrate that the operational group is run effectively, efficiently, and are diligent when it comes to cost management. Those factors are now considered a given. In addition, the role requires greater and broader strategic insight. The COO must contribute to the overall success of the business in all areas and helps execute on the strategy.Rosemarie McClean, Chief Operating Officer (COO), Ontario Teachers’ Pension Plan

Since I am the first COO ever appointed at Ontario Teachers’, I established some strategic pillars for the division after speaking with employees and stakeholders across the organization. The plan was to use these strategic pillars to ensure all teams are aligned and to guide the activity of our group going forward. The three strategic pillars are Service, Efficiency, and Innovation.

Journal: Setting the right team must be essential to support these strategic pillars?

Rosemarie McClean: It was absolutely key. I knew I had to have a senior leadership team who understood where I wanted to lead the division and could translate that into driving business outcomes. It was also important to get the right people at the next level and at all levels. This was a unique opportunity to put the right people in the right place regardless of previous roles and any pre-conceptions. Now I have a mix of existing and new employees. All of my direct reports were actually new to their roles and they brought fresh ideas and enthusiasm to their work. I could not be more pleased with the outcome.

Journal: How do you ensure that your team always has a solid grip on what your clients need?

Rosemarie McClean: It is critical that we have a deep knowledge of the daily business of each area and anticipate where the business is going to evolve next. By continually communicating, we can be there to support each functional area every step of the way and ensure that we are capable of continual adaption. To that end, our organization recently introduced a three-year enterprise plan. The plan ensures that, as functional partners, we are part of many conversations as the business organization is mapping out the future.

We have also established Client Relationship Management (CRM), which is a service delivery model designed to ensure that our clients are better able to realize their overall business strategies. Our CRM leaders are accountable for representing the end-to-end outcomes that support our client groups. They do this by gaining a deep understanding of the business area and their support needs. The goal for this approach is to ensure our engagement with the business is more streamlined and efficient and that our clients do not need to wade through multiple layers of people to get issues addressed. The feedback from our clients has been extremely positive.

Journal: How do you ensure that you have the right IT capabilities to support your strategic pillars and to add value to your investment professionals?

Rosemarie McClean: One of the first steps we took was to do a thorough review of our IT capabilities. Once we confirmed what our current and potential capabilities were, we made some thoughtful decisions about which parts were in our core functionality and which parts could be more effectively managed by a strategic technology partner. We recognized the need to build a flexible and scalable approach to the ever-changing IT landscape while still maintaining internal control of the aspects of IT that we do very well.

Journal: And what about information security? It seems to be a constant headache when you want to meet client demands by providing transparency and user-friendly solutions?

Rosemarie McClean: It is definitely a balancing act. There is always a tension between delivering a great user-friendly service and the need for vigilance in keeping our information protected and secure. Since I have been COO, we have analyzed our risk and added additional governance over information security. One measure has been adding more resources to sharpen our focus and support leaders at the most senior levels of the organization to move us to the higher end of the continuum of information security. We have made it the job of every employee to communicate ideas and concerns across the organization and keep our business leaders informed.

A COO will be faced with complexity, regulation, demanding clients, and global uncertainty, and will need to strive to deliver simplified processes, managed costs, and service delivery excellence. Rosemarie McClean, Chief Operating Officer (COO), Ontario Teachers’ Pension Plan

Journal: How do you view the role as Chief Operations Officer in an investment management firm – has it changed over time in terms of importance and areas of responsibility?

Rosemarie McClean: I believe that now, more than ever, a COO has to demonstrate that operations groups are run effectively, efficiently, and are diligent when it comes to cost. Those factors are now considered a given. In addition, the role requires greater and broader strategic insight. The COO must contribute to the overall success of the business in all areas and help execute the strategy. All of this is occurring within the complexity of a modern regulatory environment, and taking into account an increasingly competitive global perspective. This environment means we necessarily must continue to understand the business area requirements well enough to provide them with the IT, project management, and operational support required to optimize success.

Journal: Looking ahead, what do you see as the main challenges for Chief Operations Officers and how do you recommend your peers to prepare for these challenges?

Rosemarie McClean: An effective COO will need to lead teams to deliver desirable business outcomes and break down barriers standing in the way of excellent results. Understanding and influencing where the business is going is one of the key things a COO can accomplish. There will be a need to innovate and adapt. A COO will be faced with complexity, regulation, demanding clients, and global uncertainty, and will need to strive to deliver simplified processes, managed costs, and service delivery excellence.

Journal: And how does the future look for pension plan firms like Ontario Teachers'?

Rosemarie McClean: Our, and other pension plans’, future depends on our ability to respond to business needs in an agile and innovative manner. The rapid pace of change in areas like regulatory compliance and collateral management makes it essential for us to have the right technical platform in place to deliver timely and accurate information across all asset classes to our investment professionals at any time of the day. An investment book of record (or IBOR) is one way of organizing your data to be able to address the kinds of business challenges we are facing today.

To have confidence that we will be able to keep pace with our business needs through application of technical capabilities like an IBOR, strong relationships with industry-leading vendors like the one we have with SimCorp are essential.

About the author

As COO, Rosemarie McClean is responsible for Ontario Teachers' key operational activities: Information Technology, Enterprise Service Delivery and Financial Operations. She is responsible for ensuring these functions are effectively integrated and deployed across the organization.

Ms. McClean was appointed to the COO role in November 2014. Prior to that, she held the position of Senior Vice-President, Member Services. Under her leadership, the client services group was organized into self-directed work teams that dramatically improved the speed, range and quality of client services offered to the plan's 316,000 active and retired members. She introduced award-winning services, including web-based retirement planning tools that provide members with immediate access to personal pension information.

Ms. McClean serves on the boards of Illinois-headquartered Heartland Dental Care and the Alberta Pensions Services Corporation. In 2008, she was recognized by Women's Executive Network as one of Canada's 100 Most Powerful Women.

Ms. McClean holds a BA in Economics from the University of Waterloo and an MBA from the Rotman School of Management at the University of Toronto. She holds the CPA, CMA designations and is a graduate of the Institute of Corporate Directors.