Long before the coronavirus crisis hit, Lisa Gray, the former chief executive of the Victorian Funds Management Corporation, had put in place plans to prepare the sovereign wealth fund for market shocks.
Early in her six-year tenure at the helm of VFMC, Gray had run internal 'fire drills' to heighten the fund's readiness and preparedness for shock events.
"You can't predict what they will be, or how fast they will happen, but you need to be ready when major shifts occur," she says.
Firms must have the capabilities to identify a crisis and quickly change course, she adds. "But you can only do that if you have the right leadership, the right culture underpinned by data analytics and technology."
For investment companies like VFMC, building greater resilience in its investment performance and capability is critical to surviving an unpredictable future.
And while funds typically have crisis management strategies in place, Gray argues that most have not devised plans specifically for investment and capital markets.
The value of the fire drill was getting people together quickly if markets moved through certain price levels or in uncertain ways.
"It's about communication, decision making, and having the right people in the room to make those decisions. If a major shock occurs, everyone needs to know who needs to be involved, who should communicate with whom, and who has the authority to make decisions quickly," she argues.
Thanks to the regular fire drills, Gray was confident VFMC staff could work differently. They could access data remotely, so the investment team did not lose the valuable insights needed to make decisions.
The onslaught of Covid
When the pandemic hit in March 2020, financial markets crashed and rebounded, creating the widest performance gap seen between funds for some time.
The former VFMC had also put in place several new liquidity strategies to overcome any potential short-term hit as well as new asset allocation practices that would perform late in the cycle."
They had been approved by the board and were ready to go when we needed them."
In short, Gray made her mark on VFMC by masterminding a plan that would see the fund respond quickly to dramatically changed circumstances.
"Importantly, you build up that muscle and fitness so that when a shock event hits, you are ready," she argues.
Yet, although Covid turned a spotlight on the fire drills, that was just a small part of Gray's overall plan to position the sovereign wealth fund for the next decade.
When she arrived at VFMC, the sovereign wealth fund was in decent shape and generating good returns. However, Gray believed there was more to be done if the fund were to evolve, transform and be ready for change.
She was a change agent committed to transforming the fund.
The trouble is, the former chief executive found that pushing for change is tough when there is no burning platform - when there is no obvious need for a revamp.
Still, she went ahead and overhauled VFMC's technology, investment expertise, leadership, culture, and capability. Gray says building up technology and data and analytics was important for any strategy but critical for where funds find themselves today.
Alongside these efforts, she shifted VMFC to a whole-of-portfolio investment, further underlining the importance of data analytics and insights
A new career
The logical next career step for Gray is leadership and management education. And she has spotted a gap in the market for aspirational teachers.
In her view, most people are either academics or consultants so their experience is theoretical. "There are too few practitioners out there - too few people who have led and transformed companies."
At VFMC, she ran a set of masterclasses to help people learn different ways of communicating and influencing and persuading, getting decisions made, and communicating with an executive team as well as their peers.
Continuing with that work is something that appeals to Gray.
To that end, she is currently exploring working with business schools to link practical leadership experience with management training.
"It's not just about sharing experiences but being able to frame them in a repeatable way so others can access them and apply them to different situations."
She has two key messages for those who want to pursue a career in financial services and ultimately be chief executive.
First, she would encourage people to take risks early in their careers and not to be afraid to move laterally. "Otherwise, they will be penalised. They find that once they get to a certain level, they don't have the required set of broader skills.
And on being a chief executive, Gray says today's boards need authenticity and transparency from a leader, someone up front who can talk about what's working and not working.
Remarkably, many people she comes across want the top job but are not sure why.
"The big question for people who aspire to be a chief executive is why do you want the top job and what do you plan to do when you get it," she says.
Ultimately, Gray believes that being a good chief executive means asking what an organisation needs. "Whether you're leading a small company or a larger one, leadership is about knowing the right questions to ask about what comes next."
Just as she did six years ago.