September 21, 2014 

LOL Journal, The Focus Advisory Board Forum (FAB), 

FCG meets with investment leaders each year in a two day forum to discuss their leadership journeys. We are fortunate to have leaders from around the world join us for discussions that range from leadership style, firm strategy, industry trends, compensation models to the very personal: your image of success (each participant chose a photo to share), your strengths/weaknesses as a leader, and your commitment to generosity. The latter was based on Adam Grant’s “Give and Take” book, which we sent to each leader in advance of the forum. We asked each leader to take Grant’s survey for “giver, matcher, taker” mindsets. Our attendees scored as follows: 

% Giver %Taker %Matcher 
93% 0% 7% 
87% 13% 0% 
67% 0% 33% 
67% 13% 20% 
67% 7% 26% 
60% 7% 33% 
60% 7% 33% 
60% 27% 13% 
53% 7% 40% 
53% 27% 20% 
53% 7% 40% 
47% 20% 33% 
47% 20% 33% 
47% 13% 40% 
47% 20% 33% 
47% 27% 27% 
33% 27% 40% 
20% 27% 53% 
20% 13% 67% 

With the averages as follows: 

       57% 15%       29% 

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Of course, we couldn’t resist asking our group, what do you imagine is the investment industry average for Giving (57% for our attendees)?   The chart below shows the voting results: 

Our group believed that the industry would be around 31%, if you average our voting scores.  So, is our group really so much more generous than the average investment professional? Or are we just overconfident: better than average drivers, comics, IQs, etc.  Probably a little of both.  The survey (which can be taken at this website: http://www.giveandtake.com/Home/ChooseAssessment ) lends itself to gaming the answers, as you know which ones represent “giving” vs. “taking.”  

But this group of investment leaders is unusual. Having gotten to know them well over many years, we know them to be truly a kind and generous bunch. And also very successful. Five of our nine “Focus Elite” winners attended. These leaders have created incredibly “sticky” cultures that attract and retain top talent, which produces winning results for clients, employees, and owners.  

After discussing Grant’s book (see last LOL for a summary), we asked our leadership group: do you want to create a “giver” culture in your firm? No surprise that the anonymous voting turned out this results: 

Every leader in the room agreed—to a greater or lesser extent—with this intention: to create a “giver” culture. (There were fewer votes on this slide because we asked only the leaders, not the FCG consultants to weigh in.) 

The level of interest in this book was remarkable. In side conversations with leaders, many expressed gratitude for sending the book and reported the lessons they had learned. One important lesson from the book is captured in this graph: 

The winning combination for leaders is to be self-aware around their own needs and interests (concern for self-interest) while also being equally committed to the needs and interests of others. So, Grant’s formula for the biggest win is to be both “selfish” and “otherish.” This wisdom is found in other leadership books, like Covey’s “Seven Habits.” Two habits in particular emphasize the dual wisdom: take care of yourself, but also take care of others: 

  • “Seek first to understand, then to be understood.” (I want to hear your view, but I want you to hear mine too!) 
  • “Synergy: try for win-win.” (We cultivate an attitude of win-win, or—if we can’t get there—then no deal, with the relationship still intact.) 

Many FAB leaders have wrestled with getting this balance right. One expressed his satisfaction in reading Grant’s chapter about how to avoid being a doormat. He said with great relief, “Geez, I try to be generous with everyone, but then it backfires because I get so frustrated with the takers!” Indeed, the lessons from Grant’s book are deep and wide-ranging. And our leaders really found this topic hugely important to their own leadership journey. The book gained lots of traction over the two days, as participants were using the language—giver and taker—humorously and often by the second day.  

For me, the rather obvious but important takeaway from Grant’s book involves our fiduciary duties. If we are bound to the fiduciary code of putting client interests first, then don’t we have to develop and practice a giver mindset? Our job is to be “otherish” as Grant calls it. Our duty is to take care of our clients, to have THEIR interests at heart. There is really no place for takers to be leading investment firms. Admittedly some roles, like traders, may lend themselves to a taker mindset. But the traditional investment firm must be oriented around serving clients. And that seems to be a giver mentality.  

Another hot topic at FAB was the recent piece by Charley Ellis, “The Rise and Fall of Performance Investing.” In some ways Ellis’ article dovetails with Grant’s book, in light of this summary statement by Ellis: “Although not as exciting as competing on price discovery, investment counseling based on values discovery is greatly needed by most investors—institutional investment committees as well as individual investors—and surely offers more opportunities for real long-term success to both our profession and our clients.” (FAJ, July/Aug 2014, pg. 22) Voila, back again at the central point: taking care of the client. Given our interest in this topic, Charley Ellis is joining us on our next Webinar: September 26, noon central (register here:  https://www1.gotomeeting.com/register/700841665 )  And speaking of Webinars, our edition on November 21 edition is Adam Grant (registration details available shortly).  Join us for one or both!  

Those of you keeping close track of these LOL journals realize that I haven’t made good on my promise to write about comp mediation. Next time for sure!  Till then, best wishes, 

JW