Article

Prime time for investment superteams

June 14, 2021
Roger Urwin head shot

Roger Urwin

As published on Top1000funds

We have all seen superteams in action on the sports field, usually winning because they have mastered the art of combining diverse talents to produce exceptional performances.

But surely this concept has equal validity for investment organisations, where a lot of the principles are similar and because, fundamentally, investment is a human-talent endeavour.

In the shift of knowledge and power from the individual to the collective, the investment industry has increasingly preferred teams over stars and has developed a dependency on these teams’ collective intelligence.

However, investment organisations have not focused enough on the important dynamics of teamwork and team thought, or cognitive diversity, as part of this shift when building more diverse workforces. This is surprising, given the industry’s challenges are becoming increasingly complex, multi-layered and inter-connected, and in need of multiple insights in order to be successful.

The critical starting place should be with diversity in its sophisticated form of diversity, equity and inclusion (DEI). And with an understanding that diversity is the presence of differences; equity is the respect for differences; and inclusion is the leverage of differences.

To reiterate, there can’t be a better place to start the quest of building exceptional teamwork than with DEI because it can form a cultural bedrock that embeds belonging and a strong group identity. And it provides a promising contribution towards the cognitive diversity that can unpack those tough challenges.

In this context it is helpful to think of collective intelligence as the experience and expertise across a diverse team and the combination and dynamics within such a team. This collaboration and the collective efforts of teams, through their design and practices, is a portfolio concept where team combinations matter more than individual contributions. Cognitively diverse teams can explore issues creatively and innovatively by employing depth on certain critical subject matters, alongside breadth in more lateral areas of context and connection. Such teams will be curious, will stop to develop their thinking when they lack perspective, will see experimenting as critical, and will explore multiple solutions before reaching conclusions.

So-called T-shaped people have natural advantages as contributors to cognitive diversity. Their mix of subject depth (the vertical bar of the ‘T’) and subject breadth (the horizontal bar of the ‘T’) suits the profile of cognitively diverse teams through their wider perspectives across many fields and disciplines.

Talented T-shaped people will contribute positively to cognitive diversity with a growth mind-set, integrated thinking and problem-solving ability. They are naturally in the majority in the line-ups of cognitively diverse teams.

But to address the most challenging industry issues, more specialised people with unique knowledge will be needed. The need here is for I-shaped people who are deep subject-matter experts. They can either be in the team or accessed by the team. Teams, if they want to play in the super leagues, need to have flexibility to deal with specialised demands that may be time-specific rather than recurring.

In cognitively diverse teams each member must be a team player, understand their role and play that part, and have the adaptability to be the player, player-coach and coach at times. In addition, they take personal accountability for their actions while at the same time participate in a collective respect for team over individual.

While these competencies and characteristics are the raw ingredients, a cognitively diverse team needs leadership that draws on the power of organisational culture and is adept at the composing craft of governance to turn this sum-of-parts potential into a superteam. These typically T-shaped leaders will build such a team through small gains over time achieved by consistently applying inclusion, exercising trust, building frameworks and enforcing rigour.

These leadership capabilities and attributes deserve extra scrutiny.

Applying inclusion involves building a culture where there is a shared identity and purpose and equality of voice is a key objective. On a practical level, this requires providing role clarity and respect; having an open and flexible attitude; practicing effective chairing disciplines; and pro-actively coaching – and constructively challenging – team members’ behaviours and skills.

Trust, like a muscle, benefits from exercise and strength is the result. The main way for leaders to style this virtuous cycle is primarily by promoting self-awareness, which helps build team identity and reinforce culture. In addition, by showing appreciation for colleagues via personal interaction they can secure social capital and, by ensuring a safe psychological space, openness and innovation can thrive.

It is helpful to think of the importance of building frameworks by comparing them to the scaffolding needed in the construction of an impressive cathedral. For the superteam, think of this scaffolding as all the codified intelligence required to ensure the very best interactions such as the use of beliefs and principles as fundamental frameworks to shape the critical thinking needed for accurate decisions. Other examples include tabulation of responsibilities and authorities; goals, inputs and outputs; measures and incentives like KPIs. Together these make up the playbooks that prepare for future situations and exploit comparative advantages.

The virtual working environment has reminded us of the importance of structure and disciplines and that rigour in these areas produces the best team interactions. This attitude also fosters problem-solving versatility, cognitive exploration and a socialising mindset. It also extends to a disciplined use of data, evidence, argument and narrative as well as taking the holistic view of soft and hard data. And when it comes to meetings – increasingly via screens – superteam leaders should apply rigour to surfacing all team members’ perspectives, recognising any biases and being alert to groupthink.

Teams with all these characteristics will be innovative. But where innovation is especially critical, leaders need to promote and reward creativity and allow the culture to comfortably accommodate experimentation, risk-taking and learning from failures. Also, they have to balance nimble innovation with patient innovation that embraces long time horizons and deals well with ambiguity.

In summary, a superteam is a team led to success through combining a diverse and talented array of humanity that is unleashed by great culture and governance. There are parallels here with the most successful professional sports teams. In sports teams, playbooks matter, in investment teams likewise. In sports teams and investment teams, effective culture is absolutely critical.

And investment teams, like sports teams, can ‘get in the zone’ by delivering not just exceptionally strong results, but also exceptionally rewarding experiences for those team members. With all the current challenges on all of our shoulders, this is the prime time for investment leaders to invest in their teams.