Here’s a secret weapon for investment professionals, and it’s free.
I joke about our industry having ADD: Appreciation Deficit Disorder. But it’s true. When asked about this deficit, chief investment officers (CIOs) respond with straight faces that showing their staff more appreciation will result in:
- Less work: “They’ll get complacent.”
- Demands for more money: “They’ll use it as bargaining power.”
Seriously. We hear this from otherwise intelligent, decent people.
Appreciation is a greatly under-utilized tool in the leader’s toolkit. The simple act of appreciating your staff will pay huge dividends. Some CIOs respond, correctly, that they don’t want to walk around the floor giving false praise. Good instinct. We agree.
But here’s a different approach. Appreciation can simply be the act of paying close attention to someone. Appreciation means the full awareness or understanding of something. So, you could practice appreciation by simply asking a staff member how their work is coming. And then — this is the key — paying close attention to their response. The skill of “active listening” — paying very close attentino to someone — is based on appreciation. And active listening can take a grand total of 30 seconds. It requires no artificial flattery. Just give your people full attention. Simple.
Other ways to show appreciation?
- Acts of Service: After a colleague hosts a great client meeting, you could say, “That was a great meeting, let me take care of the follow-up to show you how much I value your work.”
- Gifts: Using the same example, you could say, “That was a great meeting, let me buy lunch to show you how much I value your work.”
- Words of Praise: Again using the same example, you could say, “That was a great meeting. The way you framed the meeting at the outset was excellent, and the way you fielded their questions — especially the one on performance — was great.” Of course, words of praise must be sincere, and specific.
But there is more to appreciation. And this is where it gets really interesting. Appreciation is a powerful cultural tool for positive change. As investment professionals, we’ve all been deeply immersed in the “problem-solving” paradigm. We are good at analyzing situations, and then extracting the problems: What’s wrong with this company? What’s wrong with this industry? What’s wrong with this employee? It’s so embedded in our psyches that we can hardly find language other than: What’s the problem? What’s the root cause? Where are things screwed up?
But there is another, more effective approach. It is called “Appreciative Inquiry” and has been researched and practiced for several decades. And it works.
The chart below depicts the basic difference between “problem solving” and “appreciative inquiry.”
The big differentiator is the focus of attention. Traditional problem solving homes in on the defects, on what’s wrong. Appreciative inquiry focuses on the successes, on what’s right.
As logical as it sounds — to focus on the positive — we experience great resistance from investment teams because they are SO conditioned to solve problems. Keep in mind, we are not throwing analytical skills out the window! They are valuable. But the research is clear: What you focus on grows. So, if you focus on problems, they get bigger!
Let’s be clear: If you want to fix a flat tire, you focus on the flat tire and find a new, functional tire to replace it. The mistake comes when you treat people — or teams — as machines or parts of machines, as the tires, for example.
When you do this, you fall into the trap of reinforcing the negative.
An example may help. Imagine your functional groups are experiencing turfism, jealousy, and conflict. You decide to have a team-building intervention as recommended by traditional conflict resolution consultants.
This sort of intervention would call for:
“[M]anagers to articulate why they see one another as troublesome or problematic. Following the perseverance effect in social cognition theory, once one puts forth a causal explanation for one’s belief, the belief is actually strengthened. Therefore, if one were to say one sees a co-worker as crabby and unapproachable because the co-worker is selfish, moody, and insecure the chances would be greater that, merely because one formed and articulated this causal explanation, one’s belief about the co-worker would be stronger. One becomes even more convinced that the co-worker is selfish, moody, and insecure.”
And often these kinds of intervention make the problems worse. Because you focus on and reinforce the “stories” about one another.
We use a different approach — the appreciative one — with good results. A recent example involves the two big departments in a state agency: investments and benefits delivery.
We met with the department leaders and their senior teams for an intervention. And instead of dragging in the “elephants” and slaying them one by one, we worked with the appreciative approach: What’s working? We largely ignored the stated problems and went directly to: What successes has the agency experienced? What are you most proud of? Team members spent a few minutes privately writing them down, then shared them with a neighbor.
The positive energy in the room was palpable. We then asked what had happened since our last meeting, two months before, that was positive. Again, the group was able to name lots of changes and behaviors that contributed to better communication, more trust, and higher effectiveness. Our questions to the group were aimed at teasing out the best practices. So, when one pair of team members talked about their improved communication, we asked questions like, “What specifically allowed for the improvement?” And then their attention naturally went to the things that were working.
Admittedly, the agency had made changes to their personnel during this time period. And it helped. They moved out the people who were underperforming. Of course, we do not believe that Appreciative Inquiry replaces the need to have strong players in the right roles.
So, if the appreciative approach is so much more effective than traditional problem solving, why isn’t it used more often? One explanation is that traditional problem solving makes us look more intelligent. And don’t we love to look smart!
Studies in this regard are telling. A clever researcher asked a control group to read Broadway theater reviews. Participants were asked to sort them into two piles: smart reviewers and not-so-smart reviewers. When the piles were analyzed, the results were clear: Critical reviews were considered “smart” while complimentary reviews — “your family will love this show . . . It is a really feel-good experience” — were put in the not-so-smart pile.
Here’s the catch: All the reviews were written by the same person! We look smarter when we are being critical. Again, we love to look smart.
We also resist the appreciative approach to change because it smacks of “polyanna-ish” thinking. How can we solve the hard issues, when we are simply rolling around in this positive fluff? Let’s be clear: We don’t recommend that you ignore tough issues. (Or stay with underperformers.) Quite the opposite. Acknowledge them and resolve them. Just don’t fall into the trap of “worshiping the problems,” as one of our clients calls it. Admittedly, sometimes the feelings about bad team dynamics run so deep that a period of venting is needed — the classic, “Get it off your chest” catharsis. Fine, but then return to the appreciative premise: What’s working in the organization or the team?
Further, don’t confuse this approach to improving team dynamics with the critical thinking that helps with investment decisions. That sort of critical thinking is vital in the analysis of investment decisions. The trick is to turn off that critical thinking when you move to interpersonal issues. You won’t help a team perform better by criticizing them. And you won’t help an individual raise their game by dwelling on their flaws.
Try it. You’ll like it.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Image credit: ©Getty Images/ FrankRamspott
James Ware, CFA, is the founder of Focus Consulting Group, a firm dedicated to helping investment leaders leverage their talent. Ware is the author of “Investment Leadership: Building a Winning Culture for Long-Term Success,” and “High Performing Investment Teams,” both of which discuss those elements of leadership and teamwork that lead to sustainable success for investment firms. Ware has 20 years’ experience as a research analyst, portfolio manager, and director of buy-side investment operations. He has been a guest lecturer on the topic of investment firm management at the Kellogg Graduate School of Management, Northwestern University. Ware has a Masters in Business from the University of Chicago and a degree in philosophy from Williams College, where he graduated Phi Beta Kappa.