Achieve strong results through gentle leadership

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One of the most interesting aspects of my job as a performance consultant to financial organizations is that I have seen firsthand the impact of management decisions and processes on portfolio management teams. Since outcomes in the world of trade and investment are measured in dollars and cents, it is possible to estimate the impact of different business processes on multiple companies tackling the same markets.

Having worked with these companies for almost 20 years, I can say that one conclusion stands out with particular clarity: The leadership styles that display the greatest concern for employees produce the best financial performance and, over time, also excel at recruiting and retaining the best talent.. A prime example occurred when two large financial organizations contacted me while they were looking for help for their trading teams. One company was unusually outgoing, contacted me with senior management and put me in touch with members of the investment team. To one person, the people I spoke with expressed their enthusiasm and commitment to their business. The second company invited me to speak with members of management, provided little information, and conducted surprisingly rote interviews. The process couldn’t have been more stilted and mechanical. Unsurprisingly, I chose to work with the first company and declined the second, but over the next year I was independently contacted by employees of the second organization, asking for help finding a new job. The number one complaint of these experienced and talented employees? Lack of loyalty and support from management. The common refrain of portfolio managers was: “I feel like I’m as good as my last returns.

This experience stuck in my mind as it contrasted so much with what I hear from traders and team members at successful businesses: the feeling that their companies are committed to their success. A hedge fund where I work does everything possible to provide mentoring, coaching and support for the development of fund managers. She has a reputation for developing talent, and maybe that’s why she has been successful in retaining talent. Years ago I was part of a recruiting team at a hedge fund and used my time with interviewees to tour offices, introduce them to team members in the trading room and even pick them up at the airport and show them around the community. After hiring several key prospects, I was told that it was our personal interest in them that helped them make the decision to join us and not our competition. Quite simply, and not surprisingly, people want to work in places where they feel valued and appreciated.

This is particularly what recent research tells us. To consider:

  • Adam Grant, in his book Give and take, summarizes studies suggesting that ‘donors’ and ‘takers’ develop very different networks, with donors generating much greater value from their networks. He notes that in medical school, donors perform particularly well as members of clinical teams. It was also my experience running a medical student counseling program; I am now seeing the results replicated on the portfolio management teams. Top performing teams are those where everyone is focused on improving everyone and achieving common goals. We get more when each of us gives.
  • Emma Seppälä and Kim Cameron report that positive work cultures achieve the best results and, indeed, are associated with increased employee engagement, well-being and health. “While there is an assumption that stress and pressure cause employees to perform better, better and faster,” the authors note, “what ruthless organizations don’t recognize are the hidden costs incurred. . ” The loss of productivity due to employee stress has been estimated at more than $ 500 billion, they report. Conversely, when employees are more engaged and satisfied at work, they become more productive.
  • Emilie Lahti presents evidence this power, in itself, can erode performance and should be associated with emotional intelligence and empathy. She uses the term “soft power” to emphasize that effective leadership is not just about daring and charisma, but also about working together and promoting psychological security and confidence. In my work with investment teams, I have witnessed times when analysts have been shot for presenting ideas that their portfolio managers disagreed with. Unsurprisingly, these analysts were unlikely to subsequently go out on intellectual members and generate creative ideas, limiting the overall performance of the team.
  • Robert emmon abstract a wealth of research that suggests gratitude is associated with overall well-being, productivity, and physical health. He uses the term “emotional prosperityTo describe the fulfillment associated with a state of mind of appreciation. In my work with portfolio management teams, I am struck by the relationship between their success and the amount and quality of time they spend together – socially – outside of working hours. Quite simply, successful teams like to be together and appreciate each other. This was noticeable during the recent pandemic, where teams working from home made special efforts to stay connected after hours. Successful teams are much more likely to host online meetings and virtual happy hours. The camaraderie during these is palpable.
  • In his book Soft leadership, MS Rao identifies the 11 Cs that distinguish emotionally intelligent leadership: character, charisma, conscience, conviction, courage, communication, compassion, commitment, consistency, consideration and contribution. “The first quality of any leader is to be passionate about serving people,” he explains. This fits well with the notion of servant leadership: We are most inspired by others when we are most attentive to their needs and interests. From this perspective, management starts with self-management; it emanates from who we are, not just what we do.

Of course, we can also consider leadership at a purely individual level: each of us tracks his own life. When we view leadership from this internal perspective, it is clear that there are opportunities to be energetic, visionary, and assertive in our pursuit of goals, and there are times to be understanding, supportive, and supportive. Pushing ourselves to do more and berating ourselves for failing are recipes for demotivation. Indeed, it is the security and well-being generated by the softer sides of leadership that forms the emotional foundation of entrepreneurial risk-taking: when we are good with ourselves, we feel more secure to fail. .

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