High performing investment teams how to achieve best practices of top firms

ffirs.qdx 1/31/06 2:32 PM Page iii ♦ High Performing Investment Teams How to Achieve Best Practices of Top Firms Jim Ware and Jim Dethmer With Jamie Ziegler and Fran Skinner John Wiley & Sons, Inc ffirs.qdx 1/31/06 2:32 PM Page ii ffirs.qdx 1/31/06 2:32 PM Page i ♦ High Performing Investment Teams ffirs.qdx 1/31/06 2:32 PM Page ii ffirs.qdx 1/31/06 2:32 PM Page iii ♦ High Performing Investment Teams How to Achieve Best Practices of Top Firms Jim Ware and Jim Dethmer With Jamie Ziegler and Fran Skinner John Wiley & Sons, Inc ffirs.qdx 1/31/06 2:32 PM Page iv Copyright © 2006 by Focus Consulting Group All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the web at www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002 Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books For more information about Wiley products, visit our web site at www.wiley.com Library of Congress Cataloging-in-Publication Data Ware, Jim, 1954High performing investment teams : how to achieve best practices of top firms / by Jim Ware and Jim Dethmer With Jamie Ziegler and Fran Skinner ; foreword by Michael J Mauboussin ; afterword by Kate Ludeman and Eddie Erlandson p cm Includes bibliographical references ISBN-13 978-0-471-77078-7 (cloth) ISBN-10 0-471-77078-7 (cloth) Investment advisors Teams in the workplace Leadership I Dethmer, Jim II Title HG4621.W36 2006 658.15'2—dc22 2005029718 Printed in the United States of America 10 ftoc.qxd 1/31/06 2:33 PM Page v ♦ Contents Foreword vii Preface xi Acknowledgments xiii About the Authors xvii Introduction: The Elements of Greatness Chapter 1 Investment Leadership: Building a Winning Culture for Long-Term Success 15 Chapter Curiosity: Learning How to Learn 33 Chapter Accountability Part 1: Taking Responsibility 45 Chapter Accountability Part 2: Making and Keeping Agreements 67 Chapter Candor: Revealing, Not Concealing 93 Chapter Authenticity: Eliminating Drama 105 Chapter Awareness: Using Emotional and Intuitional Intelligence 119 Chapter Genius: Maximizing Your Contribution 139 Chapter Appreciation: Shifting from Entitlement 159 v ftoc.qxd 1/31/06 2:33 PM Page vi vi Contents Chapter 10 Fit: Investment Personalities and the Seven Behaviors 181 Chapter 11 Decision Rights: Establishing and Clarifying the Rules 197 Concluding Thoughts: Measurement, Behavioral Finance, Integrity, and an Invitation for More 203 Afterword 207 Endnotes 209 Index 213 fbetw.qxd 1/31/06 2:32 PM Page vii ♦ Foreword Michael J Mauboussin S hortly after his retirement, Jack Welch, the legendary CEO of General Electric, spoke to a group of 5,000 human resources (HR) executives and delivered a message he was sure they would appreciate: The head of HR should be the second most important person in any organization Anticipating some audience adulation, he was surprised when a strange hush filled the room Prodding, he asked how many of the participants worked for firms where the CEO treated the head of HR and the CFO with equal respect Only 50 hands went up Welch was astounded Ninety-nine percent of these companies emphasized finance over people! “If you managed a baseball team,” he asked, “would you listen more closely to the team accountant or the director of player personnel?” Put this way, the lack of focus on people and their behavior seems absurd, yet this is how most executives manage their companies today If the only lesson you learn from High Performing Investment Teams is that people are crucial to long-term success, you will be ahead of the game and your competition Still, this book offers much more than that seemingly simple lesson The Focus team deftly guides you through both the theory and the practice of what makes investment firms thrive, and provides you with concrete cases and tools to improve individual and team behavior Psychologists find that people tend to attribute actions more to an individual’s character than to the social context, or the situation, in which the individual operates Studies show, though, that social context has an extremely powerful influence on behavior Researchers have convii fbetw.qxd 1/31/06 2:32 PM Page viii viii Foreword sistently noted that when good people discover themselves in bad situations, their behavior changes for the worse Thus, even if the need is not obvious or intuitive, creating a favorable social context is vital to any investment organization that wants to sustain above-average performance Even as star money managers (including my esteemed colleague Bill Miller) adorn investment magazine covers, academic research shows that a substantial majority of fund results are attributable to the investment firm, not a particular individual No doubt there are super-talented money managers out there, but performance starts and stops with them unless they create an enduring, high-performing organization Mastering the seven behaviors of high-performing teams is a challenge for any business Investment professionals may have an even more difficult time adopting these behaviors than people in most industries, aside from the personality issues the Focus team correctly considers Specifically, investment managers face three hurdles to organizational development The best firms work hard to clear all three The first challenge is the probabilistic nature of markets Like a coin toss, you never know for sure what’s going to happen next As a result, the link between process (how an organization makes a decision) and outcome (the result of that decision) is weak in the short to medium term This is crucial because an investment firm may employ a poor process and still enjoy favorable short- to medium-term outcomes by sheer chance These results invariably lead executives to overlook process and leave well enough alone Only after the performance wheels come off (which is inevitable) will a firm reassess its process and people By then, it’s often too late Saying it somewhat differently, the feedback loop is not very tight in financial markets As a result, investment results not always provide management with an accurate picture of investment team performance This means that organizational problems can fester undetected for longer than they should, and the efforts and methods of high-performing teams may not appear fruitful for uncomfortably long stretches of time This leads to the second challenge: Markets evolve Investors frequently look to the past when trying to divine the future, hoping that past patterns will repeat themselves The hard truth is that the past applies only when the conditions (for example, interest rates, inflation, tax policy) have not changed much When lots of change occurs, all bets are off 13 ware 1/13/06 10:41 AM Page 208 208 Afterword Our thanks to these authors for further charting the course and lending their experience and passion to the growing body of evidence in itially assembled by Gay and Kathlyn Hendricks The investment world is in good hands With warm respect, Kate Ludeman, PhD Eddie Erlandson, MD Authors of Radical Change, Radical Results 14 ware notes 1/13/06 10:41 AM Page 209 ♦ Endnotes PREFACE Scott Thurm, “Teamwork Raises Everyone’s Game,” Wall Street Journal, November 7, 2005, B8.) INTRODUCTION James C Collins and Jerry I Porras, Built to Last (New York: HarperBusiness, 1994); Jim Collins, Good to Great (New York: HarperCollins, 2001) Jerry Useem, “Jim Collins on Tough Call,” Fortune, June 27, 2005, 94 Kate Ludeman and Eddie Erlandson, Radical Change, Radical Results (Chicago: Dearborn Trade, 2003) Cited in Viv Groskop, Business Life, October 2005, 28 Jack Welch, Winning (San Francisco: HarperCollins, 2005), 156 Bill Williams, Trading Chaos, Applying Expert Techniques to Maximize Profits (Hoboken, N.J.: John Wiley & Sons, 1995), 96 Jim Rudd, telephone interview, August 2005 www.humansyn.com Robert J Kriegel and Louis Patler, If It Ain’t Broke, Break It! and Other Unconventional Wisdom for a Changing Business World (New York: Warner Books, 1991) This study was based on research with 80,000 managers 10 Id at 214 CHAPTER 1 Hoboken, N.J.: John Wiley & Sons, 2004 Gary Brinson, “Organizational Culture,” in Managing Investment Firms: People and Culture [conference proceedings] (AIMR, 1996) Capital Resource Advisors, July 21, 2002; available at www.cradv.com Last accessed 29 June 2003 209 14 ware notes 1/13/06 10:41 AM Page 210 210 Endnotes Jim Collins and Jerry Porras, Built to Last (New York: Harper Business, 1994) Jim Ware, Investment Leadership: Building a Winning Culture for Long-Term Success (Hoboken, N.J.: John Wiley & Sons, 2004), 149 Daniel Goleman, Emotional Intelligence (New York: Bantam, 1995) David Fisher, personal interview with author, Los Angeles, CA, 2005 CHAPTER Chris Argyris, “Teaching Smart People How to Learn,” Harvard Business Review, May-June 1991, 99–109 Edward DeBono, Six Thinking Hats (San Francisco: HarperCollins, 1991) CHAPTER Dennis Byrne, “Why Do We Always Assign Blame?” Chicago Tribune, September 5, 2005, 23 Steve Chapman, “Disaster Leads to Premature Blame Game,” Chicago Tribune, September 4, 2005, Section 2, The time-honored abbreviation for “cover your ass.” Jim Collins, Good to Great (New York: HarperCollins, 2001), 78 CHAPTER David Allen, Getting Things Done (New York: Penguin, 2001) Cited in Gay Hendricks and Kate Ludeman, The Corporate Mystic (New York: Bantam Trade Books, 1996), 124 CHAPTER The Oxford Desk Dictionary (New York: Berkeley Books, 1997), 104 Quoted in a speech by Michael Mauboussin, San Diego, California, January 2005 14 ware notes 1/13/06 10:41 AM Page 211 Endnotes 211 CHAPTER Kate Ludeman and Eddie Erlandson, Radical Change, Radical Results (Chicago: Dearborn Trade, 2003), 109 Id at 143 John Lee, The Missing Peace in Recovery (unpublished manuscript, 2005) Personal interview, August 19, 2005 Merrillyn Kosier, executive vice president, Ariel Capital Management, telephone interview with authors, August 2005 Id CHAPTER Jane Spencer, “Applications from Behavioral Finance,” Wall Street Journal, July 21, 2005, D1 An organization called HeartMath (www.heartmath.com) has evidence to show that the heart is more than a muscle; it actually contains practical wisdom, like our brains Malcolm Gladwell, Blink (New York: Little, Brown, 2005) www.ccl.org; last accessed 12 November 2005 Daniel Goleman, Emotional Intelligence (New York: Bantam, 1995); Daniel Goleman, Richard Boyatzis, and Annie McKee, Primal Leadership (Boston: Harvard Business School Press, 2002) Goleman, Boyatzis, and McKee, Primal Leadership, 206 Jane Marcus and Terry Bacon, Developing Better Asset Management Leadership (Heidrick & Struggles, 2004) Goleman, Boyatzis, and McKee, Primal Leadership, 102 Marcus and Bacon, Developing Better Asset Management Leadership, 10 Edward M Hallowell, Connect (New York: Random House, 1999), 103 11 http://www.alberteinstein.info/; last accessed 11 November 2005 12 Robert Koppel, The Intuitive Trader (Hoboken, N.J.: John Wiley & Sons, 1996) 13 Bill Williams, Trading Chaos: Applying Expert Techniques to Maximize Profits (Hoboken, N.J.: John Wiley & Sons, 1995), 156 14 Richard McCall, The Way of the Warrior-Trader: The Financial Risk-Taker’s Guide to Samurai Courage, Confidence, and Discipline (New York: Irwin Professional Publishing, 1996), 132 14 ware notes 1/13/06 10:41 AM Page 212 212 Endnotes 15 Edward Toppel, Zen in the Markets (New York: Warner, 1994), 54 16 Quoted in Koppel, The Intuitive Trader, 143 17 For a complete description, see James Ware, The Psychology of Money: An Investment Manager’s Guide to Beating the Market (New York: John Wiley & Sons, 2000) 18 www.berkshirehathaway.com; last accessed 12 November 2005 19 Sandra Weintraub, The Hidden Intelligence (Burlington, MA, Butterworth Heineman, 1998), 152 20 Cited in Weintraub, The Hidden Intelligence, 152 21 Peter Senge, The Fifth Discipline (New York: Doubleday, 1990), 312 22 Gladwell, Blink, 215 23 One resource we recommend in this regard is the book, Embracing Your Inner Critic: Turning Self-Criticism into a Creative Asset, by Hal and Sidra Stone (San Francisco: Harper, 1993) CHAPTER www.berkshirehathaway.com; last accessed November 2005 WorldatWork staff, “Majority of Managers Unprepared to Lead Future Workforce,” September 19, 2005 Available at http://resourcepro.worldatwork.org/livelink/livelink/Majority_of_Managers_Unprepared_to_Lead_F uture_Workforce.html?func=doc.Fetch&nodeId=831098&docTitle=Major ity+of+Managers+Unprepared+to+Lead+Future+Workforce&vernum=1; last accessed 18 November 2005 CHAPTER Quoted in Malcolm Gladwell, Blink (New York: Little, Brown, 2005), 38 CHAPTER 10 James Ware, The Psychology of Money: An Investment Manager’s Guide to Beating the Market (New York: John Wiley & Sons, 2000) Jim Ware, Investment Leadership: Building a Winning Culture for Long-Term Success (Hoboken, N.J.: John Wiley & Sons, 2004) 15 ware index 1/13/06 11:09 AM Page 213 ♦ Index above the line, 38, 39, 42, 93, 114 See also curiosity genius and, 152–153 accountability, See also radical responsibility agreements and See agreements apportioning, 53–55 assigned, 48–49, 50, 60 commitment to, 65 defining, 46–49 embodying, 27 results-oriented, speed and, 52–53 taking responsibility, 11, 45–65, 69 teaching, 108 as value, 45–46 Acorn Fund, 185 acquisitions, 26, 30 activity, 19 physical, 37 Adams, Scott, 45 Adventurists, 190 agreements, 11, 67–90 authority and, 74 avoiding breaches, 85–86 broken, 2, 70, 72, 80, 83–86 changing, 70, 81–83 clarity in, 69 control/lack of control over fulfillment, 75–78, 90–91 defined, 70–71, 78, 90 edicts contrasted, 74, 81 impeccability about, 77–78, 80, 85–87, 90 intellectual, 204 keeping, 69, 70, 80–81 making, 67, 71–79, 90 personality types and, 191 quality of, 71 recording, 70, 71, 78–79, 90 renegotiating, 81–83, 89 repairing broken, 83–86, 90 wanted/unwanted, 69, 71, 72–74 alignment, 22–23, 200 See also genius Allen, David, 79 Alliance Bernstein, 130–131 American Century, 5, 19, 23 Ameriprise Financial, 101 AMG, 30 analysis, 101, 120–121, 182 critical, 7, 163 fact/opinion distinction, 95 intuition and, 184 Analytic Investors, 6, 98 anger, 126–127, 161, 178, 179 anticipation, 159, 160, 161 anxiety, 109 appreciation, 7–8, 159–180 appreciative inquiry, 50–51 candor and, 97, 170–171, 179 as choice, 159, 174, 178 213 15 ware index 1/13/06 11:09 AM Page 214 214 Index appreciation (continued) circle of, 164–169 commitment to, 169, 174–178, 179 defined, 162–164 exercise, 175–178, 179 personality types and, 194 receiving, 172–174, 179–180 resistance to, 171–172 results of, 171, 196 of self, 174 verbal, 163, 169, 179 Appreciation Toss exercise, 172–173, 178, 179–180 The Apprentice, 4, 11, 49 Ardmore Investments, Argyris, Chris, 34, 58–59, 98, 101 Ariel Capital Management, 4, 6, 22, 25, 116–117, 126 decision-making at meetings, 197 personality types at, 188 Arlt, Marie, Arnott, Rob, 188 Aronson + Johnson + Ortiz, 186 Aronson, Ted, 186 asset managers See investment professionals ATB Financial, 24 attention, 162–163, 171 attitude, 7, 9, 56 authenticity, 5–6, 105–118 See also candor awareness, 6, 119–137 defined, 119, 137 personal, 123 self-awareness, 28, 123, 124–127 sensitive, 162 social, 124, 128–129 Bacon, Terry, 122, 129 Baldwin United, 185 Barrett, Richard, behavior changing, 9, 203–204 influences on, 16 patterns, 126–127 sludge factors, 9–10 behavioral finance, 119, 204–205 Behavioral Scorecard, 204 behaviors for success, 2, 31, 196 accountability See accountability adopting, 4, 11–12, 38, 203 appreciation See appreciation authenticity, 5–6, 105–118 awareness See awareness benefits of, 10–11 biochemical effects of, 207 candor See candor committing to, 78 curiosity See curiosity genius See genius implementing, 203, 204 personality type fit with, 181, 191–194 research on, 7–9 when to use, 10–11 beliefs, 16, 19, 58–59 below the line, 38, 40, 96, 105, 110, 133 See also defensiveness genius and, 152 Bernstein, Peter, 33 best practices, 196, 207 blame, 4, 9, 11, 47 See also accountability avoiding, 54 defensiveness and, 34 learning and, 56 placing, 48, 52, 60 ratio to praise, 194 self-blame, 56, 85–86 blaming, 55–57, 90, 110 blurts, 98–99 body intelligence, 6, 69, 113, 125 See also awareness signals, 73, 87, 121 Bogle, Jack, 24 bonuses, 97 boredom, 140, 144 brain functions, 120–121, 124, 182 Brandes, Charles, 2, 6, 10, 142, 189 Brandes Investment Partners, 6, 10, 56, 190, 201 breathing, 37, 173 Brinson, Gary, 17, 108, 156, 182 Brinson Partners, 156 Buffett, Warren, 12, 134, 182 genius and, 141, 142 15 ware index 1/13/06 11:09 AM Page 215 Index 215 Built to Last, 19–20, 23, 25 bureaucracy, 9, 10 Burgundy Asset Management, 133, 172 buy-in, 74, 199, 202 candor, 5, 8, 93–103 about openness, 126 appreciation and, 97, 170–171, 179 with clients, 96, 102 defined, 94 drama reduction and, 96–97 fact/opinion distinction, 94–96 lack of, 100–101 language to support, 94, 96, 98–101, 102 personality types and, 186, 187–188, 191 practicing, 101–102 problem acknowledgment, 97–98 trust and, 94, 102 as value, 102 Capital Group, 7, 20, 21, 25–26 career paths, 143, 148 caring, 27 Carlson, Glenn, 10, 190, 201 causation, 130 Center for Creative Leadership, 3, 28, 42, 121 Chanos, James, 185 character, assessing, 12, 134, 186, 187 clarity, 96 in agreements, 69 in values and vision, 20–21 Clarity Worksheet, 74, 86, 88–89, 90 coaching, 27 collaboration, 2, 117, 157 See also teamwork Collins, James C., 1, 2, 19–20, 61 commitment, 13, 52, 71, 207 to accountability, 65 to agreement impeccability, 77–78, 80, 86–87, 90 to appreciation, 169, 174–178, 179 to behaviors for success, 78 to change, 154 to continuous improvement, 203–204 to culture building, 28 to curiosity and openness, 38 feedback and, 71 to genius, 149–150, 157–158 negotiating, 39–40 to radical responsibility, 58–61, 61–63 shared, 62 to values/vision, 23 Communalists, 190, communication about thinking preferences, 184 candor in, 5, 8, 101 compensation, 17, 128, 195, 204 incentives, 24 competence, 27, 151–152 competition, internal, 11 complaining, 161, 169 compliments, 170 See also appreciation confidence, 96, 194 conflict, 96, 97–98, 110 See also drama avoiding and eliminating, 111, 116 causes of, 5, 116, 128, 167 conflict resolution, 2, 27, 49, 110–115, 124 Conflict Triangle, 110–115, 117 awareness of being in, 113 getting out of, 112–115 congruence, 27 consensus, 198, 199, 200 consequences, 85 consistency in values/vision, 21–22 continuous improvement, 203–204 control, 108, 159 lack of, 75–78 over actions, See also behaviors for success Convergent Capital, 30 cooperation, 11, 124 corporate nod, 72–73 courage, 96, 98, 157 creativity, 10, 156, 207 genius and, 142, 144–145, 154 radical responsibility and, 64 stress and, 116–117 credibility, 17, 199 Credit Suisse First Boston, 37 criticism, 7, 54, 62, 63, 161 See also appreciation; blame inner critic, 138, 173–174, 179 personality types and, 194 15 ware index 1/13/06 11:09 AM Page 216 216 Index culture, 15–31 of accountability, of appreciation, binary, 23–24 causative model, 18–19 changing, 28, 204 collaborative, 2–3 combining, 26, 30 for competitive advantage, 28, 30 connections in, 17–18 defined, 16 demonstrating, 68–69 failing, 9–10 importance of, 17 indoctrination into, 25–26 leaders and, 16–17, 21, 26, 29–30 maintaining, 29 measuring, 7–8 performance and, 19–20, 21, 30 as priority, 16 strong, 23–24, 201 toxic environments, 128 types of, 190 Culture and Values Survey, 204 curiosity, 3–4, 8, 33–43, 101 See also openness attitude of, 60 being above the line, 38, 39, 42, 93, 114 about broken agreements, 85–86 choosing, 35, 125, 205 about feedback, 40–41, 101–102 listening with, 37–38 maintaining, 123 personality types and, 193 in taking responsibility, 56, 57 emotions in, 119–121 poor, 199 resources for, 6, 120–21, 133–134, 135–137 role in, 197–198 speed of, 5, 10, 202 decision rights, 12, 196–202 ladder (of options), 199–200 who has, 197–198 defensiveness, 3, 9, 42–43, 101 being below the line, 38, 40, 96, 105, 110, 133 effects of, 34, 35 personality types and, 193 recognizing, 35, 40, 42, 125–126 responding to, 43 shifting from, 35, 42, 112–113, 115, 205 Defensiveness Scale, 35, 36, 40–41, 43, 112 delight, 142, 144 desires, 164–165, 166, 167 Dethmer, Jim, 10, 99–100, 129, 205 Diamond Portfolio Advisors, 186–187 Diermeier, Jeff, 156, 182, 188 discipline, 190 dishonesty, 94 See also lies and lying drama, 9, 10, 110 See also authenticity agreements and, 74, 84 causes of, 167 defined, 105 eliminating, 5, 96–97, 105–118 as energy drain, 116–117 meetings and, 89 Drucker, Peter, 204 Dyck, Sheldon, 24 da Silva, Harin, 98 data collection, 183 data processing, 182 Dean, E Douglas, 136 DeBono, Edward, 40 decision making, 12, 182, 197 awareness in, 119 consensus, 198, 199, 200 constraints on, 199 defensiveness and, 38 ease, 142, 145–146, 154 edicts, 74, 78, 81, 90 effectiveness, 45, 52, 74, 77 in meetings, 89 efficiency, 62, 79, 155, 207 in meetings, 196, 201 Einstein, Albert, 39, 133 elitism, 24 Ellis, Charles, 15 e-mail, 152 15 ware index 1/13/06 11:09 AM Page 217 Index 217 emotional intelligence, 6, 28, 113, 121–124 components, 123–124, 137 enhancing, 123 modeling, 52 emotional-intelligence quotient (EQ), 126 emotions, 125, 127 acting on, 132 expressing, 114, 126 identifying, 123, 125, 127, 137 managing, 5–6, 59, 123, 132 other people’s, 128–129 ownership of, 52 processing, 52, 113, 131–132 validating, 85 in workplace, 119–120, 131–133 empathy, 28, 128, 137 See also social awareness energy, 71, 116–117, 205 of emotions, 131–132 genius and, 144, 154, 157 maximizing, 80 releasing, 113 wasting, 73 engagement, rules of See behaviors for success Enron, 133, 185 entitlement, 9, 159–162, 178 circle of, 164–169 identifying, 161–162, 179 shifting from, 159–180 Erlandson, Eddie, 3, 70, 207–208 evaluation, 37, 40–41 See also feedback excitement, 59, 160 excuses, 84 executive team, 78 expectations, 25, 159, 160, 161 generation of, 164, 166 experience, 121 explanations, 84, 90 Extroverts, 182–184, 190 facts, 59, 121 distinguishing from opinion, 94–96, 98, 102 failure, 34 fault, 47, 48 See also accountability fault-finding See blame fear, 49, 52, 56, 59 anticipation and, 160 behavior based on, 119 eliminating, 17 of feedback, 40–41, 125 of leader, 126, 128 feedback, 27, 186 350-degree, 40–41, 124 agreement with, 41 commitment about, 71 curiosity and See curiosity genius and, 142, 146–147 to learning, 39 openness to, 4, 34, 41, 101–102, 173, 193 See also curiosity Feelers, 186–188, 190 feelings See emotions Ferguson Wellman Capital Management, The Fifth Discipline, 136 Fines, Gordon, 101 firing, 24 First Quadrant, 188 Fisher, David, 25–26, 28 fit, 181–194 See also genius bad, 19, 24, 38 difficult people, 111–112 hiring for, 29, 64 job/talent match, 140, 147, 157 of personality types, 181–195 flattery, 169 flexibility, 188–189, 190 focus, 9, 22, 79, 190 frustration, 161, 178, 179 fun, 56, 154 Gallup Organization, Galvin, Bob, 135–136 Gendlin, Gene, 132 genius, 6–7, 8, 139–158 alignment with, 148, 154–155, 157–158, 189 clarifying, 148–149 complementary, 156, 182 connection to, 17–18 defined, 141 distractions from, 143, 144, 149, 151–152 15 ware index 1/13/06 11:09 AM Page 218 218 Index genius (continued) feedback about, 142, 146–147 identifying, 141, 142–147 intention regarding, 149–150 moving into, 148–154 quadrant exercise re, 150–154, 158 teams with, 155–156, 158 Getting Things Done, 79 Gibson, Larry, 98 Gillman, Barry, 10 Gladwell, Malcolm, 121 Goldman Sachs, 20 Goleman, Daniel, 28, 121–122, 124 gossip, 9, 10, 89 Gottman, John, 170 Grantham, Jeremy, 188 gratitude See appreciation Greenberg, Hank, 109 Greenspan, Alan, 23 Greenwich Associates, 15 growth, 17, 49, 52 effortless, 163–164, 169 personal, 207 radical responsibility and, 58 Guardians, 190, guilt, 49, 52, 56, 80, 85 habits, 124 Hendricks, Gay, 3, 57, 78, 86, 109, 208 on conscious living, 132 Hendricks Institute, 3, 175, 203 Hendricks, Kathlyn (Katie), 3, 47, 208 herd instinct, 96–97 Hero/Rescuer role, 5, 54–55, 113, 117 personas and, 111, 112 hiring practices, 24, 27, 156 fit and, 29, 64 Hobson, Mellody, 4, 116, 188 human resources departments See also personnel Human Synergistics, humility, 126 humor, 38, 108, 131 hunches See intuition ideas, spontaneous, 99 illness, 57–58, 132 impeccability, 70 See also agreements Impeccable Agreements Self-Assessment Quiz, 69–70, 90 improvement, continuous, 203–204 incentives See compensation incompetence, 151 influence, 76 See also control information, withholding, 103, 186 inner critic, 138, 173–174, 179 input, 199 insight See intuition instinct See intuition integrity, 27, 205 breach of, 67, 80 intellect, 204 intelligence, 34, 194 body See body intelligence emotional See emotional intelligence intention, 149, 154 noble See noble intentions interviewing, 27, 105 personas, 114–115 Introverts, 182–184, 190, 191 intuition, 6, 119, 133–135, 137 See also awareness in decision making, 120–121, 133 effect on performance, 135 integrating with logic, 134 personality types and, 184 The Intuitive Trader, 134 Intuitors, 184–185, 190, 191 investment, 6, 134, 187 Investment Adviser Association, 105 Investment Leadership, 3, 15, 181 investment professionals, 139–140, 191 personal attributes/characteristics, 190 personality types, 12, 181, 186, 190–191 Jackson, Phil, 37, 170 Jannotta, Ed, 181 job descriptions, 140 job satisfaction, 140, 142, 155 15 ware index 1/13/06 11:09 AM Page 219 Index 219 Jordan, Michael, 146, 182 Judgers (organized people), 188–189, 190 Jung, Carl, 181 justifications, 84 K.G Redding & Associates, 6, 56, 98, 123 genius and, 133, 156 personality types at, 188 Kneeley, Stephen, Koppel, Robert, 134 Kotter, John, language blurts, 98–99 of candor, 94, 97, 98–101, 102 layoffs, 188 leadership, 8, 15–31 authenticity and, 105 coaching, 124 credibility, 199 culture and, 16–17, 21, 26, 29–30 desire to lead, 122–123 importance of, 17 influence of, 23 inspirational, 129–131 investment knowledge, 122 personality types, 189–193 relationship (social) management by, 129–130 skills/attributes, 28, 42 radical responsibility and, 52–53 tasks of, 30 values/vision commitment, 3, 23 leadership development programs, 27–28, 29–30 leadership succession, 26–28, 143 tribal method, 27 learning See also curiosity assumptions re, 41–42 blame and, 56 capacity for, commitment to, 52 defensiveness and, 34 feedback to, 39 getting, 52, 61, 85–86 how to learn, 33–43 increasing, 49 outside, 26 radical responsibility and, 58 relearning, 124–125 learning agility, 34, 39, 42, 64 See also curiosity LeBaron, Dean, 142 Lee, John, 114–115, 132 left-brain thinking, 121, 125, 134 Leventhal, Linda, 134 lies and lying, 5, 94, 101 misleading teammates, 103, 126 life/work balance, 17 limbic brain, 121, 124 listening, 37–38, 129 broken agreements and, 84–85 to feedback, 146–147, 194 logic, 6, 120–121, 133 integrating with intuition, 134 The Lominger Group, Ludeman, Kate, 3, 9, 70, 86 Lynch, Peter, 142, 182, 183 Lyons, William (Bill), management, 6, 129, 143 See also leadership manipulation, Marcus, Jane, 122, 129 Mayer, Marc, 130–131 McCall, Richard, 134 mediocrity, 140, 151 meetings, 43, 67–69, 87, 89 agreement review at, 90 efficiency of, 197, 201 memory, 78–79 Menninger Clinic, 37 mentoring, 27 mergers, 26, 30 Merrill, Charles, 135 Mihalsky, John, 136 Miller, Bill, 142 mindset, 39 mission, 17 15 ware index 1/13/06 11:09 AM Page 220 220 Index mistakes, motivation, 16, 17, 130–131 Motorola, 135 Myers-Briggs Type Indicator (MBTI), 181–190 NatCan, 30 New Dimensions Advisors, 101 New Dimensions Fund, 38 noble intentions, 108, 110, 111, 118 objectivity, 119–120, 121, 186 offsite meetings, 21, 93, 201 Old Mutual Asset Management, 30 openness, 56, 60, 123 See also candor; curiosity appreciation and, 167 to feedback, 4, 34, 41, 101–102, 173, 194 opinion, holding lightly, 94, 96, 98, 102 mistaking for fact, 94, 98, 102 revealing, 94, 98 options See possibilities orders, 74 organization, 182 overconfidence, 41, 205 ownership, 17, 20, 157 of agreement terms, 74 problems, 33, 39 passion, 10, 191 Perceivers, 188–189, 190 perception, 163 performance, 117 See also results culture and, 19–20, 21, 30 rewarding, 128 performance management processes, 24, 27 performance measurement, 100 performance reviews, 76, 100, 186, 187 persona interviews, 114–115 personal attributes, 2, 28, 42, 190 personality types, 181–195 changing, 189 clashes, 184 investment professionals, 12, 181, 186, 190–191 personas, 105–106, 117 clash of, 106–107 common, 107–108 examples, 108–109 identifying, 113, 118 meta-personas, 110–113 noble intentions of, 108, 110, 111, 118 overplaying, 113 personnel, 139 attracting, 16, 17, 195 motivating, 16, 17 retaining, 16, 17, 124, 128, 195 Peters, Tom, 67, 80 Pho, Craig, 133, 172–173 Pinnacle Award, 10 play, 56, 154 politics, 9, 10 Porras, Jerry, 19–20 Positive Coaching Alliance, 170 possibilities, 164–165 practice, 124–125, 146, 182 praise, 7, 169, 194–195 See also appreciation precision, 50, 197, 202 presence, 79 Primal Leadership, 122 prioritization, 82 Prisoner’s Dilemma, 11 problem solving, 35, 39–40, 98 problems causes of, 53–54 contribution to, 62, 65, 114 elephants in the room, 97–98 people, 122–123 procrastination, 140, 145 productivity, 62, 79, 207 increasing, 49, 80, 201 ProFunds, 123, 133, 201 promotion, 204 The Psychology of Money, 181, 182 Purcell, Phil, 109 purpose, connection with, 17 questioning, 38 Radical Change, Radical Results, radical responsibility, 49–53, 64 15 ware index 1/13/06 11:09 AM Page 221 Index 221 commitment of others to, 61–63 committing to, 58–61 speed and, 52–53 rapport, 28 Rationalists, 163, 190, 191 reactiveness, Readiness Survey, 28 reality, 97–98, 171 reality map, 129 Redding, Kim, 6, 98, 123, 133, 184 personality type, 188 relationship (social) management, 124, 129–131 relationships, 17 expectation pressures in, 167 failure of, 170 interaction ratio (positive:negative), 170, 179 managing, 13, 28, 49 personas in, 106–107 skills for, 28 remorse, 85 renegotiation, 82–83, 89 repetition, 124–125 requests, 100 Research Affiliates, 188 respect, 68 responsibility, 50 See also accountability apportioning, 53–55, 193 claiming, 55–57, 60, 111 failure to take, 106–107 outside of genius, 143 radical See radical responsibility Rule of Three, 57–58 taking, 50–52, 54–55, 69, 83–84, 93, 114, 194 results, 18–19, 20, 130 See also performance retirement, 142, 157 reward system, 23, 204 See also compensation attribution system, 97–98, 128 hero/rescuer behavior, 55 right-brain thinking, 121, 134 risk, 10, 12 Robert’s Rules of Order, 199 Rogers, John, 2, 4, 6, 22, 116, 142 candor, 126 decision making, 197 personality type, 188, 189 Rooney, Richard, 133 Rudd, Jim, rudeness, 187 Rule of Three, 57–58, 99, 102 rules of engagement See behaviors for success run rates, 10 safety, 152, 153 Sanders, Lew, 130 Sapir, Michael, 123, 133, 184, 201 Sears Financial Network, 22 security, 152 Seitz, Michelle, self-authentication, 194 self-awareness, 28, 123, 124–127 self-control, 28 self-evaluation, 181 self-management, 123, 127–128, 132 Senge, Peter, 3, 136 Sensors, 184–185, 190 shame, 49, 52, 56, 85 “Six Thinking Hats,” 40 Skeen, Jack, 116, 129 skills of candor, 101 of curiosity, 101 internal use of, 96 leadership, 28, 42 learning, 34, 41, 86 shifting behavior, 42 soft, 16, 27–28 succession of, 147 Skinner, Fran, 178 sludge factors, 9–10, 207 Smith, Adam, 119 social awareness, 124, 128–129 Soros, George, 135–137, 182, 189 Southwest Airlines, speed, 64, 207 Spitzer, Eliot, 46 stars, 2, 16 emotional intelligence of, 122 15 ware index 1/13/06 11:09 AM Page 222 222 Index stars (continued) genius and, 153 managing, 24, 27 Stone, Hal, 109 story See opinion stress, 116–117, 207 success, 18–19 ease in obtaining, 145–146 factors, 20–28, 42, 140 genius and, 141–142, 143–144, 156–157 intention for, 154 intuition in, 133 sustainable, 15 views of, 183–184, 185, 186, 189 surprise, 81, 82, 100–101, 102, 167 talents See genius Task Quadrants, 150–154, 158 teamwork, 2–3, 16 appreciation and, 170, 179 dynamics, 121, 137 fostering, 27, 124 trust and, 81 temperaments See also personality types tension, 167 territoriality, testing, 58–59, 60–61, 63 The Associates Program (TAP), 7, 25 Thinkers, 186–188, 190, 191 thinking preferences, 182 Thompson, Siegel & Walmsley, 98 thoughts, revealing, 98–99, 102 Tittsworth, David, 105 Toppel, Edward, 134 traders, 134 Trading Chaos, 6, 134 training programs, 25 trends, 185 Trump, Donald, 4, 11, 49 Truscott, Ted, 101 trust, 2, 12, 27, 172 building, 6, 27, 49, 89, 124 candor and, 94, 102 damaging, 62, 81, 82–83, 85 intuition in, 134 lack of, 93–94 in leadership, 17 rebuilding, 85 truth, 61, 95, 96, 98, 171 See also candor Turner, Bob, Turner Investment Partners, turnover, 10, 16, 64 United Way, value, growth in, 163–164, 169 values, 16, 20–23 accountability as, 45–46 behavioralizing, 19 candor as, 94, 102 collaboration as, meta-values, 30 teamwork as, Vanguard, 24 Victim role, 5, 54, 64, 110–113, 117 Villain role, 5, 113, 117 personas and, 110, 112 vision, 18, 20–23, 129 walking the talk, 22–23, 100 Wanger, Ralph, 142, 185 Ware, Jim, 151–152 Weary, Tom, 186–187 Weill, Sandy, 109 Welch, Jack, 5, 96 whole-body thinking, 120 William Blair & Company, 5, 20, 56, 181 Williams, Bill, 6, 134 Woods, Tiger, 163 work assignments, 155 workplace, healthy, Worth Ethic Corporation, 3, 70 Yates, Simon, 37 YCMNET Advisors, “yes, buts,” 58, 86, 87 Yoshikami, Michael, Zen in the Markets, 134 Ziegler, Jamie, 166 ... Page i ♦ High Performing Investment Teams ffirs.qdx 1/31/06 2:32 PM Page ii ffirs.qdx 1/31/06 2:32 PM Page iii ♦ High Performing Investment Teams How to Achieve Best Practices of Top Firms Jim... site at www.wiley.com Library of Congress Cataloging-in-Publication Data Ware, Jim, 195 4High performing investment teams : how to achieve best practices of top firms / by Jim Ware and Jim Dethmer... starts and stops with them unless they create an enduring, high- performing organization Mastering the seven behaviors of high- performing teams is a challenge for any business Investment professionals