Investment management professionals are typically hard-driven individuals determined to win at all costs, take no prisoners and beat the competition/benchmark. So how does one manage a team of these high-performing alphas while maintaining portfolio results?
High turnover is prevalent in the investment management industry, where star performers move on to greener pastures and poor performers are shown the door. However, new leaders often have a reputation for churning the team for no particular reason so that they can hire their own favourites. This is not good business management for the portfolios or for the clients. If the investment team is indeed high-performing, there should be a better approach to management.
Other leaders prefer to establish themselves as the most aggressive “alpha,” obtaining a reputation for being more ruthless than Attila the Hun.(Under this approach, the team knows that they’re doing a good job when their “butt isn’t sore from being kicked.”)But this can also sap the passion and spirit that is needed to deliver results(not to mention instil paranoia in the group).
A good leader of an investment management organization is more likely to use one or more of the following techniques:
Focus on strengths
Encourage each member to contribute in their area of strength. Find opportunities for team members to develop and present new ideas to the group and to work together in developing new products or strategies.
Motivate for results
While compensation is generally considered to be the most powerful motivator, recognition of outstanding performance and celebration of success can also be strong motivators. Keep the celebrations appropriate to the occasion(face painting and balloons are not usually appreciated by professional teams). Ask people to represent the organization at outside events beyond the scope of their usual specialization.
Check the oversized egos at the door
Leaders need to remember that portfolio results depend on the team and are rarely due to one so-called superstar. Showcase the hidden talents of the support group as well.
Avoid witch hunts
Good leaders pass on the credit when things go well and shoulder the blame in bad times. But this doesn’t mean that the team shouldn’t be expected to stay involved and engaged in turning things around when times are tough. Encourage the team to resolve their own problems and demand nothing less than full participation.
Allow some personal touches
Even “alphas” have families, take vacations, celebrate birthdays and can get discouraged at times. A good leader will show interest in personal events and activities. Discuss career aspirations and ask what can be done to support their personal development objectives.
Create an environment of trust and respect
Encourage the team to provide advice and support to each other. A respectful environment at the office will translate into respect for clients and other stakeholders as well. Good leaders share relevant information and communicate frequently.
Share decision making responsibility
In today’s complex environment, leaders don’t have to know all the answers themselves, but need to have the courage to seek out the best outcome regardless of the source. Even the military is abandoning the “command and control” leadership style as they recognize that the pace is too fast and the generals can’t be everywhere at once.
Most of all-keep a sense of humour
Investment management organizations that have a reputation for being a good place to work will find it easier to retain and attract the best talent-and having the best talent will mean having the best results.
These suggestions require more patience and perseverance than the scorched earth approaches. But sustainable investment results are a long-term proposition.
Remember, if you are fortunate enough to lead a team of high-performing “alphas,” don’t try to tame the wolf pack. Harness up the sled and hang on tight-you are about to have the ride of your life!
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