Aegon’s new restructuring is a smart strategy

I think this phrase could apply to Aegon, and others, that have been through substantial integration or replatforming projects.

These exercises can become the narrative by which the company is referenced, even after they are consigned to the annals of history.

This should now be the case with Aegon, as we heard last month of the new vision of the company set around five key pillars. There is a temptation to say this is a new strategy and that all has changed at Aegon, but I think there is a different way to look at this.

A perfectly reasonable next step would be to join the businesses together

Mike Holliday-Williams took over the reins from Adrian Grace who retired after 40 years in financial services, with 10 years at Aegon and eight as chief executive.

Mr Grace’s legacy was transformative in scale, leaving Aegon as the UK’s largest platform service operator and a scale player in the workplace with more than £180bn of combined assets.

A perfectly reasonable next step would be to join the businesses together, having spent time addressing the different challenges in each business.

This is how I see the context of the recent announcement to staff.

The first mention of Smart objectives is attributed to George T Doran in the November 1981 issue of Management Review, and became the cornerstone of the management programmes that the older members of our profession, like me, remember from the courses we went on in the 1980s and 1990s.

They are, of course, still as relevant today and maybe the acronym ‘Smart’ could be well applied to the five key ambitions set out in last month’s announcement.

The profit target at £200m is a clear sign of ambition, developing on the £122m that was last year’s result.

The same can be said of the customer target number at 5m. These and the three remaining objectives show a clear intent for meaningful growth while at the same time delivering good outcomes to advisers, employers and customers.

Aegon only sells via the intermediated channels of advisers, employee benefit consultants and employers, so a belief that a more joined-up service will benefit those routes to market must be at the cornerstone of the newly outlined approach.

In his statement, Mr Holliday-Williams said the business could be seen “as too complex” and “not as efficient as it should be”. There are numerous examples in our industry where ‘uncomplicated’ businesses with a compellingly clear purpose are the long-term winners.

I have always been a great believer in defining the purpose of your business and testing everything that you do against that core purpose.

If is not additive to the people that you seek to serve, then why would you be doing it? The key to any successful delivery is the quality and experience of the team that is responsible for delivering it.

It is refreshing to see that the executive remains largely the same, thus retaining the many years of in-house experience that have been built up.

Mark Till, managing director of digital solutions, and his executive team have mostly been in the business for many years and the key senior management functions are retained by people who have a number of years of individual and collective experience in the business.

It is often the case that people see announcements such as this as some kind of upheaval.

The internal machinations of platforms are only important in the degree to which they deliver better outcomes for the people they seek to serve.

In the case of Aegon, the intent is clearly laid out and the pillars of success are certainly Smart. The evaluation will be, as ever, in the delivery, but it certainly appears to have the appetite and the team to make a real difference.

Peter Mann is an independent chairman and non-executive director in financial services