Just prior to the start of the 1983 season, legendary college football coach Bo Schembechler famously told his players from the University of Michigan that no man, regardless of his skill or physical abilities, was more important than the team. That no coach, was more important than the team. He asked them to consider what effect things they did in preparation for the game would have on the team. And he told them that if they believed in each other and were willing to surrender something of themselves, the team would accomplish something much greater as a unit than they could ever hope to achieve on their own. Pretty heady stuff for a bunch of 19, 20, and 21 year old college athletes. I thought so too even though I heard it on the radio just like everyone else. Still, when Bo gave that impassioned speech 31 years ago, it was just 2 days past my 24th birthday…and it left a mark.
Last quarter and a world away, renowned portfolio manager Bill Gross shocked many Wall Street observers and untold scores of investors by bolting from his position as the Chief Investment Officer at PIMCO to take a job at rival Janus. While only time will tell if Mr. Gross will be able to reprise his successful run at PIMCO on a much smaller stage, this much is certain: If he is successful, it will be without his Co-Chief Investment Officer and long time aide de camp Mohamed El-Erian with whom he bitterly (and publicly) parted ways earlier this year. It is also unlikely to include much of PIMCO’s inner circle of analysts, traders, and support staff. I’m sure this is not the glorious end Mr. Gross envisioned when he and a partner started PIMCO in 1971.
Unlike college football where the consequence of poor performance or fractured team morale results in wounded pride and perhaps slower season ticket sales, the consequences are very different when the team is charged with the responsibility to manage someone else’s nest egg. In following the PIMCO storyline as it’s been played out in the press, I find it disturbing to see how much attention has been devoted to the impact on the career of Bill Gross and how little has been devoted to the investors that got left behind.
In his book Bo’s Lasting Lessons author John U. Bacon outlined a series of team leadership skills that Coach Schembechler taught by example throughout his storied career. It’s a great read, and even if you’re a rival Michigan State Spartan or an Ohio State Buckeye, you can’t help finding something in these pages that strikes a chord. What resonates most deeply for me however, are the two foundational lessons from which all the others emerge: First, no man is the team, and second, for the team to have transcendent meaning, it must exist for some higher purpose other than itself.
These days I spend a lot of time thinking about the team. Not Bo’s team or Bill Gross’s team, but our investment team here at Exchange Capital Management. Whether we manage money for you or you entrust that job to another firm, it’s something you should think about too. Are we organized to serve? Do we have the right mix of professionals with broadly diversified skills? Can we overcome our natural familiarity & comfort with the technical aspects of our craft and still nurture a consistent sense of empathy for clients in times of stress or elevated uncertainty? Does everyone here have a defined role to play that positively contributes to client success? And most important, is there an intentional plan to develop and promote talent from within the organization, so that when someone inevitably does retire or move on to pursue other opportunities the client experience is not diminished.
When it comes to team building, I’m just not sufficiently arrogant to think we’ve broken the code or have all the answers. But what I do know is this: when we stop looking in the mirror and reminding ourselves ‘you’re not as smart as you think buster‘, the team is cooked.
Michael Reid, CFA is a Managing Director and Partner at Exchange Capital Management. The opinions expressed in this article are his own.
