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Mastering a Culture of Investment Excellence

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Mastering a Culture of Investment Excellence

If investing is, indeed, a combination of art and science as often cited by experts in the industry, how do you build an investment team that has this rare combination of skills? What does it take to create a culture that enables us to deliver optimal results consistently while at the same time building a business where people have freedom to learn?

In my experience, an important starting point is to attract investment professionals who are not merely motivated by financial factors but who buy into the firm’s investment vision and are passionate about delivering on it. 

In the old days, investment professionals were primarily interested in how much they would be remunerated for the investment performance they delivered. But times have changed, and it is now much more about the firm’s vision and culture and whether they believe they will experience a sense of purpose and fulfilment from what they do. 

Research by Focus Consulting Group’s James Ware and Bryan Kozlowski confirms that a clear sense of direction is one of the three most important factors needed to create a high-performing team. Others, they say, are having the right team members and trust between them. 

They cite a Discovering Phi study that measured just how vital a sense of purpose is in spurring motivation and, as a result, achieving better investment results. In the study, phi represents purpose, and the results showed that a 1% increase in phi was associated with the following:

  • 28% greater odds of excellent organisational performance
  • 55% greater odds of excellent client satisfaction
  • 57% greater odds of excellent employee engagement

When it comes to finding the right team members, Ware and Kozlowski divide the motivators for investment professionals into extrinsic factors, namely remuneration, status, competition and winning, and intrinsic factors, namely doing something important, believing in what you do, doing it because it’s right and doing it because you love it. 

The results of the Phi study present solid evidence that it is intrinsic, rather than extrinsic, motivators that most increase the likelihood of success and engagement between employees at an investment firm 

Recognising the need for a clear vision and culture within which our investment talent can thrive, at Prescient, we have worked hard at articulating and getting buy-in for our vision, which is to create certainty for our clients. Our purpose is to create sustainable value for our clients and the communities in which we operate. That never changes and it is something that all of us are passionate about and work towards every day. 

Our business culture is also distinctive in that our team members have one attribute in common – humility – and I believe this has contributed significantly to our investment success. Interestingly, Ware and Kozlowski also pinpoint curiosity and humility as characteristics of an ideal team player.

I’ve found that team members who are humble respect each other and recognise each other as individuals, strengthening the team. They also have high levels of self-awareness and a strong sense of responsibility for managing money. They are careful and meticulous and are happy to contribute to a collective investment process that results in collective success. 

Even though, as human beings, we are inherently the same, culture does influence behaviours, practices and values. Thus multicultural collaboration can be a strength but, if not properly managed, can also be a weakness. 

To get the best out of multicultural and multi-skilled teams, you have to be deliberate and know your team, who they are, and what their strengths are – this means looking beyond their technical expertise. In many ways, this flies in the face of the traditional approach of being only performance-driven. But, if you get this right, it could unlock a high-performance team that will remain motivated and persevere through all market conditions and not just when investment performance is excelling. 

Our business encourages collaboration, rather than siloed thinking and engagement. In her book “The Culture Map”, Erin Meyer suggests that you can better manage cross-collaboration practically by looking at the objective you want to achieve. As an example, if you want to achieve innovation, then expansive, more diverse thinking facilitates more creative outcomes. On the other hand, if it’s a particular project with clear, fast outcomes, smaller, more homogeneous teams, work better. When it comes to deadlines, sometimes unexpected queries expedite a project. For these urgent projects, it’s useful to have team members who are inherently deadline-driven and thrive under pressure. 

Sometimes client requests evolve from an initial brief to requiring more in-depth analysis. In this case, you need to call on the team members who don’t mind changing direction at the drop of a hat. There are also times when someone in the team needs direct feedback and honesty, even when it is not positive. In this case, the team member who is comfortable with delivering direct feedback constructively communicates with that team member, building trust. As mentioned earlier, trust between team members is one of the critical factors identified by Focus Consulting in high-performing teams. 

What makes Prescient’s investment approach different is that we have a well established, systematic investment process and we follow a team approach to decision-making. For us, the team is always stronger than the individual. It is, therefore, more important that the team is always collaborating, well-resourced and has the right blend of skill sets. More importantly, that we are energised and driven to deliver only the best outcomes for clients. 

To get the mix of skills right is only the first step in building a strong investment team. It takes commitment, dedication and determination to manifest all the other factors needed. But if you get it right, as I believe we have after many years of intentional team development, you will reap the benefits of knowing that you can successfully and sustainably deliver on your clients’ expectations for many years to come. DM/BM

Author: Cheree Dyers – Chief Executive Officer at Prescient Investment Management

DISCLAIMER

  • This document is for information purposes only and does not constitute or form part of any offer to issue or sell or any solicitation of any offer to subscribe for or purchase any particular investments. Opinions expressed in this document may be changed without notice at any time after publication. We therefore disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable directly or indirectly to the use of or reliance upon the information.
  • Prescient Investment Management (Pty) Ltd is an authorised financial services provider (FSP 612).
  • The value of investments may go up as well as down and past performance is not necessarily a guide to future performance and there are no guarantees.
  • There are risks involved in buying or selling any financial product.
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