Fidelity is a very successful profitable, but I do not think it is a very well-managed company.
People see trillions of dollars in assets, huge revenues, a prominent brand, and decades of survival and assume that the people running it must be exceptionally capable or the business is well wrong. That conclusion is wrong.
Of course Fidelity has enormous structural advantages. It has scale, customer relationships, brand recognition, distribution, infrastructure, regulatory barriers, and the economics that come from operating at enormous scale. Those advantages create a substantial moat. But while a moat protects helps protect a business, it t does not prove that the people inside the business are intelligent, creative, or competent.
In fact, Fidelity has a serious problem with managerial mediocrity. This starts with the head, Abby, who if you've interacted with her you notice isnt the brightest.
Nevertheless Fidelity proves that a firm can make enormous amounts of money while still having weak decision-making, bureaucratic processes, mediocre technology management, and an excessive dependence on H1B1 labor.
Fidelity's senior leadership is surrounded by consultants who make this problem worse. Large companies are constantly sold fashionable management ideas wrapped in impressive language: “digital transformation,” “Agile transformation,” “AI-enabled operating models,” etc.
Consultants can take a straightforward problem, invent a complicated framework around it, give the framework a name, and convince executives that they have received sophisticated strategic insight.
That is not necessarily deception in the Executives start believing that because they are discussing sophisticated terminology, they are doing sophisticated management.
Fidelity's technology organization is where I find things especially troubling. Outsourcing software development is not inherently stupid. The problem is becoming dependent on contractors and third-party organizations for core technical capabilities. If the company does not maintain deep internal engineering expertise, its executives can end up depending on H1B1 to explain their own systems to them. That creates exactly the kind of agency and information problems that organizational theory warns about. You cannot effectively manage technology that you do not understand.
Returning to leadership: My assessment of Abigail Johnson is that she does not demonstrate the creative or strategic imagination I would expect from the leader of an institution of this size. I regard her leadership as fundamentally unremarkable. Calling her a “mo--n” is obviously an opinion rather than a measurable fact, but it captures the level of intellectual confidence I have in the leadership.
Fidelity is what i would call a wealthy mediocrity: an organization with enormous resources that does not appear to use those resources with corresponding intelligence. That model can work for a very long time.
But that does not mean the model is sustainable forever.
In fact I think Fidelity is sc--wed.