Backstop’s CEO Clint Coghill: “Staying Still is Falling Behind”

As CEO and Chairman of Backstop Solutions Group, Clint Coghill sits at a unique place in the financial world that not many people would understand. His perspective on the industry doesn't really fall within the norm, either.

Backstop provides cloud-based software solutions to a wide range of financial firms — from hedge funds to private-equity firms and family offices worldwide. As a former hedge-fund manager, Clint saw the need for a better relationship with portfolio management, so he filled the void with Backstop’s software suite. From the time Backstop was founded in 2003 to today, Clint has seen and led waves of change in the business — from being more cloud- and ecosystem-centric to more customer-focused.

In this installment of our Luminaries series, I spoke with Clint about the tactics he’s used in leading transformation and using the power of data to make better, faster decisions. The main takeaway? Starting with why is the best way to cut through the noise.

 

JARED JOHNSON: Compared to B2C companies, it's always harder for B2B companies to get close to their customers. With hedge fund management experience yourself, you have a leg up in gaining empathy for your customers (who include hedge fund managers). But how do you scale that empathy throughout Backstop as it has grown? How do you help your employees get closer to your customers, so they can serve them better?

CLINT COGHILL: This is a very astute question, as it touches on how to scale a company in such a way that everyone stays customer-focused. While I may have come out of a hedge fund background, our clients come from the full spectrum of institutional investing: pensions, endowments, foundations, family offices, private equity, real estate, investment consultants, and more. To maintain empathy for the client, we emphasize a number of areas.

First, we do NPS (net promoter score) surveys on a regular basis, asking clients to give us their perspectives on their user experience. Second, our product management team runs Client Advisory Boards within their specific product areas to gain more insights from the “voice of the customer.” Thirdly, we host an annual conference in Chicago, titled “BUC,” where we invite clients and prospects to come together and discuss the most pressing issues of the day through industry panels and keynotes. During this conference, we host avenues for interfacing with clients and collecting feedback and experiences, including client success showcases, the BackCHAT bar manned by the support team, and networking sessions. Most importantly, we invested in and architected a team within Backstop — our Relationship Management Team — that is responsible for providing two-way channels of communication into our client base.


JJ: What will it look and feel like to be Backstop's client in five years? What will be the same? What will be different?

CC: It’s our belief that our clients deserve to stay ahead of the curve. In our industry, staying still is falling behind. We’re constantly focused on ways to improve productivity for our clients, and with that in mind, we’re building and acquiring capabilities that enable more integration and more ability to pull insights out of information. For example, we just acquired BarclayHedge, a leading provider of alternative data and indices, to allow our institutional clients to optimize their research management and portfolio selection processes. We’ve also built out a library of APIs that will allow our clients to better integrate with the applications they find most useful, so that they can gain greater visibility into the information they need for optimized decision making. Five years from now, being a Backstop client will mean chief investment officers and their teams will be able to harness, organize, connect, and transform the vast amounts of data coming their way into insights they can use to generate superior results.

In our industry, staying still is falling behind. 

 

JJ: Many financial services firms are struggling to transform to be more oriented around their customers and digital. Digital transformation is the term often used for this. However, it is generally accepted that organizations don't really change unless you address things like your incentives, key measurements, and change the decision-making process. What do you think is at the heart of getting change to actually take root with employees?

CC: It's true, when you say “digital transformation,” you’re really using a term that describes going from little or no technology to using the right technology to support and even enhance business processes. But technology is just that — it requires humans to interact with it in order to work. If the humans in that organization don’t adopt it, no amount of technological investment is going to move that organization forward. In our view, change starts at the top. Senior leaders need to embrace the change, exemplify it, articulate its importance, and live the change in order for the rest of the organization to follow. This means that senior leaders need to do a good job of sharing the vision underpinning the transformation. If the journey starts at point A, what does the destination at point Z look like? Then change management processes and techniques need to be adopted in order to move the teams towards the destination — this is where things like milestones, goals, incentives, and measurements come into play.   

But technology is just that — it requires humans to interact with it in order to work. If the humans in that organization don’t adopt it, no amount of technological investment is going to move that organization forward.

 

JJ: With a lot of technologies emerging, it's harder than ever to differentiate between long-lasting trends that are just beginning and short-lived fads that will soon fizzle out. How do you separate the signal from the noise?

CC: This is an absolutely true statement. People in our industry are always talking about AI and big data and how to harness those to make better investment decisions. In my view, before you can talk about AI and big data and machine learning and the latest technological fads, you have to first have a way to enable collaboration among your teams and break down silos. You have to go beyond having a place to store information to having a system where that information — whether it’s qualitative or quantitative — can be connected together to create insights. And before you do that, you have to have a data strategy and define governance, mobility, security, and analytics. And before you can have a data strategy, you have to have a strategy — period. What we do at Backstop is try to understand the underlying strategic why of doing something before selecting the technology that helps us accomplish it. That’s how we separate the “signal” from the “noise.”

Try to understand the strategic why of doing something before selecting the technology.  

 

JJ:  What do you believe will have the greatest impact on investment managers and institutional asset owners in the next three years? 

CC: One thing that is clear is that the amount of information a person is exposed to in a single day is equivalent to what a person 100 years ago would have experienced in a lifetime. I think I read a statistic from JPMorgan stating that 90 percent of the world’s data was created two years ago. I think this swell of data is only going to become greater in the next three years, and investment managers and institutional asset owners alike are going to have to find ways to better harness that data and turn it into insight in order to succeed and gain an edge. In order to do that, they’re going to have to architect the right processes, select the right technology partners to help them break down organizational silos, and transform digitally into an organization that knows how to search, connect, and explore their data in the optimal way. 

Follow Clint on LinkedIn. 

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