Senior Investor coaching Archives

Why good investors can be difficult people

This article’s title may be deliberately controversial, but it points to something real. Good investors are not difficult people in any simple or universal sense. Many are loyal, generous and care deeply about others. But the mental disciplines that make them effective in markets can make them harder to understand, and sometimes harder to be with, in ordinary human relationships.

Why?

Good investors are trained, formally or otherwise, to distrust surface narratives. They look for incentives, asymmetries, second-order effects, hidden risks, mispriced information and emotional distortion. They are paid to notice what others miss, to resist consensus, to separate signal from noise and to change their mind when the evidence changes. These are exceptional capabilities in investment decision-making. They are not always comfortable capabilities to be around.

Most people do not experience conversation as a search for decision quality. They experience it as connection, reassurance, recognition, belonging or emotional exchange. The investor, by contrast, may instinctively interrogate the logic of what is being said. What is the evidence? What assumption sits underneath that claim? What would make this view false? What incentive does this person have to believe it? What is the downside risk?

In an investment meeting, these questions are marks of skill. At dinner, in a marriage, inside a family, or with colleagues who are seeking support rather than analysis, they can feel cold or adversarial.

The issue is usually not bad intention, however. It is “mode mismatch”. Investors often develop a high-resolution operating system for uncertainty. They are comfortable with probabilities where others want certainty.

There is also a kind of professional conditioning, as markets can and do punish naivety. In fact, over time, an investor learns that charming stories can conceal weak economics, confident leaders can be wrong and consensus can be dangerous. The results of real-world investment experience, therefore, make them more discerning. But, it can also make them more suspicious, so that the same instinct that serves capital can erode trust if carried unfiltered into human relationships.

Good investors may also become impatient with imprecision. They hear overstatement, false certainty, weak assumptions, narrative fallacy and emotional reasoning everywhere. Once someone has learned to see these patterns, they cannot easily unsee them. This creates a twin burden: they may feel surrounded by loose thinking, while others feel judged, corrected or subtly diminished.

Yet, the conclusion should not be that investors are destined to be difficult people. Nor should it be that every investor must become equally skilled at developing rewarding relationships. The deeper point is that investment judgement and relational judgement are different disciplines, and their relative importance depends on the role.

For a specialist analyst or portfolio manager, a certain degree of sharpness may benefit from more tolerance because it is useful. They still need enough relational skill to be heard, challenged and trusted, but excessive interpersonal adaptation can blunt the very edge they are paid to bring. For an investment leader, the equation changes. At this level, poor relational judgement is no longer just a personality quirk, it becomes a performance drag.

For chief investment officers, board members or allocators, the criteria of success shift even more. Here, people are the majority part of the role. The ability, therefore, to translate rigorous thinking into good relationships is not a soft skill. It is the primary purpose and determinant of success.

The mature investor, then, is not universally accommodating. That is where Goldcrest’s specialism matters. Generic leadership and human performance development often miss the investor’s operating system; technical investment training often misses the human system in which judgement is applied.

Goldcrest works precisely at that intersection: for investors, by investors. The aim is not to soften rigour, but to know when it needs translation.

The 54% edge: Federer, Wimbledon and the compounding of judgement

At Wimbledon, excellence is easy to misread.

From the outside, the great players appear to impose themselves on the match. They look fluent, certain, almost inevitable. Centre Court gives dominance a theatre: the quiet walk to the baseline, the composed serve, the clean winner, the score moving steadily in one direction. By the time the trophy is lifted, the story can look like control.

Roger Federer’s recent Dartmouth address offered a different, more useful version of the story.

Across his career, Federer won almost 80% of his matches. Yet he won only 54% of the points he played.

That is not a footnote. It is the entire lesson.

The margin at each individual point was narrow. But in tennis, points become games, games become sets, sets become matches, matches become tournaments and tournaments become careers. A small advantage, sustained with discipline, compounds into an outcome that looks far larger than the edge that created it.

This is why the number is so striking. Federer’s greatness was not built on winning every point. It was built on a process robust enough to keep producing a small edge under pressure, again and again, without being flattened by the last mistake or flattered by the last success.

For investors, the parallel is direct enough to be useful and imperfect enough to be interesting.

The best investors are not right all the time. In fact, their hit rate is about the same as Federer’s. They are not exempt from error, noise, poor timing, adverse conditions or incomplete information. Their advantage often sits in something more modest and more durable: a slightly better capacity to frame the question, weigh evidence, challenge assumptions, size conviction, manage risk and keep judgement intact when the environment is ambiguous. That is the investment equivalent of Federer’s 54%.

Furthermore, in markets, the individual “point” is not always visible. It may be a decision to initiate a position, resist a consensus, reduce exposure, add to a holding, change one’s mind, challenge an internal thesis or do nothing when action would feel more satisfying. Each decision may be small in isolation. Some will be right, some will be wrong and some will be rewarded or punished for reasons that have little to do with the quality of the underlying judgement.

But over time, these decisions compound. They become portfolio outcomes. They shape quarters…quarters become years…years become track records. Track records become trust, reputation and the capacity to keep attracting capital and improve the lives of those who provide it.

So, Federer’s simple phrase: “it’s only a point” does not mean the point is trivial. When the point is being played, it deserves total attention. But once it is over, it cannot be allowed to contaminate the next one. Investors face the same inner turmoil where a past poor decision can affect their future thoughts and opinions. In those moments, those decisions are rarely corrupted by a lack of intelligence. Instead, they are corrupted by attachment, ego, fatigue, defensiveness or the unexamined desire to recover ground.

The best investment processes are, therefore, designed to protect judgement at precisely these points. This is the less visible work behind long-term performance and why Goldcrest’s work on investment decision-making starts with the human and organisational conditions that sit beneath the visible result.

Because better performance does not come simply from asking people to have more conviction. The harder and more valuable discipline is calibration: knowing how strongly to hold a view, what evidence would change it, how much capital it deserves and where the reasoning may be vulnerable.

For, while at Wimbledon, a 54% edge at the point level can become a championship career, in investment management, durable investment performance is built the same way: decision by decision, quarter by quarter, year by year, through a process that keeps judgement clear when certainty is unavailable.

Senior Investor coaching to support investment teamwork

The Brief

The individual was an experienced investor who had been promoted to head of strategy and was looking for support to manage complex interpersonal relationships amongst team members, in the context of wider organisational change. These challenges, alongside volatile market conditions and demands on personal time and energy had depleted resilience.

The Engagement

A Goldcrest coach with experience working as a portfolio manager engaged with the client for a 12-month term. The assignment began with an alignment meeting with the organisational sponsor to understand the wider context, individual development areas and desired outcomes. A psychometric was used to generate self-awareness, particularly at times of stress, and continued with a focus on recovering and building personal resilience to better cope with the issues at hand. This foundation, combined with a variety of new leadership and teamwork approaches, was applied to investment meetings, the compensation round and a team off-site.

The Outcome

With confidence and well-being restored, the challenges at hand became much more manageable. The newly acquired leadership skills, built from senior investor coaching, enabled improved effectiveness and fostered the environment necessary for a high-performing team.

Senior Investor coaching to help better navigate the organisation

The Brief

The individual was an experienced and highly valued individual contributor who was having a negative impact on members of adjacent teams due to their interpersonal style and way of working. The client’s intentions were good and motivated by a desire for the firm to succeed but hindered by a critical attitude and direct interpersonal style.

The Engagement

A Goldcrest coach with experience working as a portfolio manager engaged with the client for a 12-month term. The assignment began with an alignment meeting with the organisational sponsor to understand the wider context, individual development areas and desired outcomes. A psychometric was used to generate self-awareness, particularly at times of stress, alongside an extensive round of 360 interviews with colleagues to identify ‘real-life’ examples of the consequences of demonstrated behaviours.

The Outcome

After regular senior investor coaching, the client had a deeper understanding of self, recognition of the power their voice carried, and development of more collaborative techniques to achieve success a significant shift in behaviour that enabled continued investment success alongside better internal relationships and reputation.

Leading through adversity

The Brief

The client was a NASDAQ-listed asset manager seeking to support a high-potential leader as they transitioned from one functional area to another. There was a degree of organisational stress present due to market and competitive conditions, which needed navigating with assurance.

The Engagement

The engagement was a 9-month executive coaching relationship with a focus on letting go of subject matter expertise, building resilience, addressing team dynamics, influencing for change with peers, and developing strategic leadership skills. The meetings were a mixture of in-person and online, as best suited and engagement.

The Outcome

The client found the experience to be very positive with both the sector expertise of the Goldcrest Partners coach and their understanding of a diverse range of relevant topics standing them apart from other coaches. The relationship continues with an extension to enable continued support as the client is considered for promotion.

Career transition for an investor

The Brief

The client was an experienced investor with a strong career at Europe-based asset managers. Following their departure from their most recent employer the brief was to support the move into the next chapter with specialist transition coaching.

The Engagement

A Goldcrest coach with experience working as a portfolio manager engaged with the client for a 12-month term. The coaching themes were reflecting on the previous employer, evaluating purpose and priorities for what came next, exploring personal investment philosophy and process, evaluation of opportunities and finally role application and interview preparation. A psychometric test was used, along with an emotional intelligence diagnostic and a specialist risk appetite survey to generate self-awareness and inform the conversations.

The Outcome

The presence of a companion at a difficult moment always tends to have value and this was very much the case in this engagement. The client has happily taken a position at a firm that shares their values and appreciates their investment approach, which augurs well for the future.

Re-framing performance goals for a senior investor

The Brief

The individual was a top-performing long-only equity portfolio manager, who experienced the first extended period of underperformance in their career. Goldcrest were asked to help the individual recover personal resilience, explore the currently held investment philosophy and process for investment decision making process and rebuild for the future.

The Engagement

A Goldcrest coach with experience working as a portfolio manager engaged with the client for a 6-month term. The assignment began with an alignment meeting with the investment team head to understand the organisational context, individual development areas and desired outcomes. The personality psychometric was used to generate self-awareness, particularly at times of stress, alongside an emotional intelligence diagnostic to develop further insights in service of the individual’s personal resilience, interpersonal relationships, and investment decision making.

The Outcome

Work on boundaries and renewal activities boosted wellbeing and enabled a re-framing of performance goals through the lens of inputs to stabilise and build resilience. A reformulated approach to investment philosophy, process and decision making introduced more recognition of uncertainty and agility, and improved investment performance.

How to have a successful career transition

Transitions happen throughout our working life, whether it’s a promotion, moving to a new city or leaving a job. In this insight piece we explore some common experiences and things to think about when leaving a job.

Who’s calling the shots

A key factor in our experience of a transition is whether we’re in control. Choosing to leave an employer for something new can be exciting, empowering and represent progress towards a desired destination. It is something that we are doing.

In comparison, being made redundant is something that has been done to us. It often comes as a shock and can be scary, disempowering and be a real setback. These experiences can be difficult to process but navigating the unfamiliar territory of a transition is essential to achieve good outcomes.

The first step is to quickly restore the control that has been diminished.

This is why transition coaching is so highly valued. Choosing to work with someone who is an expert in this specialist area brings certainty where there is confusion, connection at a time when there has been disconnection and confidence when there might be self-doubt.

Most importantly, in that action you are taking back control.

Time to reflect

There are some strong practical motives to get straight back to work. As a rule of thumb you’ve got more chance of getting back in if you act quickly. So there’s a bit of a sprint when the headhunters are interested and your knowledge is most relevant.

There is also an impetus to move quickly away from the sense of grief. Many people identify with their role and when that role doesn’t exist anymore, it can present quite an existential crisis. So there can be a psychological and emotional rush to get back as well.

Despite the urgency, making some time to look back and reflect can be hugely valuable. Exploring how things ended, re-evaluating your time in the role and what led you to it in the first place is an important way to learn, clear some difficult emotions and come to peace with the way things played out.

Elisabeth Kübler-Ross’s seminal five-stage model of grieving describes how we transition from denial to bargaining. When this doesn’t work we get angry, that doesn’t worth either so we get depressed before finally finding acceptance.

Understanding this serves as a good roadmap for career change and can also be helpful in personal transitions e.g. divorce, bereavement, empty nesting, retirement.

Taking stock

There are often a few core things to figure out when in transition:

Core identity: who are you beyond the various roles you perform? In life we have lots of concurrent roles and what we do for work can be central to our identity, self-esteem and self-confidence. Paradoxically we tend to feel happier and do a better job if our sense of self is independent and not conditional on what we do for a living. Getting clear on this can be life changing.

Core skills: what are the things you are good at that have a use in different environments. Developing a comprehensive sense of your transferable skills is great for confidence and also opens up new horizons where what you bring will have value.

Core needs: in light of the above what are your options? How do you balance your financial needs/ambitions with your wellbeing, your interests with what someone will pay you to do, the urgency to get back in with a moment to slow down and smell the roses.

Setting new goals and taking next steps

David Kessler, who co-wrote a more recent update with Elisabeth Kübler-Ross On Grief and Grieving: Finding the Meaning of Grief through the Five Stages of Loss, expanded the process with a sixth stage – finding meaning in the experience – which is well articulated in his HBR article ‘That discomfort you’re feeling is grief‘ published during the pandemic.

The meaning we make of the event is what surfaces when we make time to reflect and take stock and fuels our new goals and next steps.

Your goal might be as simple as looking for a similar job for similar money as quickly as possible. Conversely, you may wish to make a change. You may be at a stage of career where you wish to go plural with some NED/Advisory positions coupled with some consulting work.

Whatever the goal, getting really clear on what you would like to accomplish and how best to go about it is critical to success. Working with an expert transition coach can help you set these goals, plan how to execute them and support you as you progress.

It is often said that getting a new job is a full-time job in its own right. It is certainly a challenging but rewarding process that can pay-off in your next role, your self-confidence and the other transitions that life presents.

How to be at your best

Does the very thought of working on your performance mindset leave you with a knot in your stomach? Perhaps it conjures up images of learning survival techniques on an outward-bound expedition or an even earlier alarm in the morning to make time for a fitness regime.

While these endeavours have merit, in the everyday environment it’s not about climbing Mount Everest (although kudos if that’s something you’ve achieved!). It’s about being in good enough shape to navigate the specific challenges your work and life present.

“Mindset” is defined as the attitudes that determine how you interpret and respond to situations. Getting the right mindset to achieve your goals is the first step in identifying what is required to achieve peak performance in your chosen field.

This is when the highly trained experts at Goldcrest Partners can help. We take a holistic approach to the pillars of performance – cognitive, physical, emotional, physiological – and focus on what is important for you to perform better more of the time. It’s a complex, inter-related dynamic, but get it right and all the elements will slot smoothly into place – leaving you better placed to perform (and enjoy) life at work and at home.

Don’t follow the herd

Whether you’re a fund manager or a firefighter, in essence, performance coaching asks, “How do you do what you do better?”

To achieve this, there’s been a tendency for ‘business’ to over-borrow techniques from the worlds of elite sport and the military. This choice is natural as they are environments where performance psychology has been an implicit and explicit part of training for decades and is a highly developed area of competence.

The reality, though, is that the financial workplace is a different environment with a different timeframe and different operating rhythm. Some qualities like discipline and teamwork tend to crossover well, but as the performance criteria and the persistence demanded are different, so is the emphasis of the performance coaching.

At Goldcrest Partners, our observation is that financial services over-index on cognitive performance, physical conditioning is the go-to stress management activity, and the emotional and physiological dimensions are most often overlooked. This makes sense because from an autonomic nervous system perspective, high achievers in financial services tend to be sympathetic dominant with a bias to action over rest.

This approach can work, but it is akin to driving through a muddy field in a 2-wheel drive. The car can be as high-performance as you like, but until its power is distributed evenly, it just spins away and potentially burns out before reaching its destination.

This behavioural tendency can also play out in the way finance professionals demonstrate an over development of technical and tactical skills with more emphasis needed on interpersonal and strategic aspects that are crucial to successful performance of the most senior roles.

Role specific

An accurate diagnosis of the key actions required to execute a role is essential.

There is no one-size-fits-all solution. Different roles in the finance industry are unique and evolve over time, so the performance criteria are different to begin with and then change.

For example, successful investment decision-making takes cognitive clarity and emotional intelligence, so a focus on those elements may be the primary areas of focus to elevate performance. Effective leaders of organisations benefit from having a clear purpose, being physiologically well-regulated and forming strong relational bonds, so that could be the emphasis for boosting performance in those roles.

What is consistent is the accurate identification of the capabilities needed to perform a role well and focus on these. Other elements that may be the most important in other elite performance environments could just be hygiene factors or not relevant to high performance in the financial services industry.

Individualised and effective

The assessment of the needs of the role is complemented by an internal appraisal of the individual. How you are doing, both personally and professionally.

This ‘diagnostic’ process can include many different inputs and tends to massively raise self-awareness which informs where to build up and balance out our capability to perform the task at hand.

We then work with you to design an easy and enjoyable framework that takes into account your professional and personal values and goals.

But a bit like business strategy, the success rate for a process such as this is low. Plans are often misguided, don’t get started and if they do, they seldom stick and that’s where the value of performance mindset coaching comes into its own.

Support, challenge – and have some fun

It takes practise and time to change habits. A combination of support and challenge in the right balance is a winning formula.

Receiving permission to rest and guidance on how to develop parasympathetic renewal techniques is important support for those who tend to be ‘always on the go’.

Shifting mindset that the process doesn’t need to be a painful 180° switch in lifestyle is invaluable. Often the smallest changes can have the biggest impact. Consider the 1 in 60 rule in which pilots learn that flying just 1 degree off course means after 60 miles they’ll miss their target by an entire mile. Now flip that on its head and apply it to the trajectory of your career, a small change to your direction of travel today can make a big difference to your destination in a few years.

Challenge lives in the coaching relationship and in the things you commit to do. It can take the form of acknowledging fixed mindsets that don’t serve you or your goals anymore. Holding you accountable to your plans and actions. These might be as simple as getting up an hour earlier to incorporate some exercise into your routine – or hitting the snooze button to get an hour’s extra sleep because you don’t really need to be in the gym six days a week. It could be a challenge to develop new interpersonal skills and upgrade your communication to transform the way you engage with your teams, peers and leaders.

The most effective approach to support and challenge is carefully calibrated and, most importantly, fun. Not only can it be enjoyable, but we also believe it has to be, otherwise it is just another chore on an already never ending to-do-list.

Perhaps this is the biggest mindset shift of all. It is easy to sustainably elevate your performance and enhance your long-term wellbeing while having fun!

Personal sustainability & renewal

Pressure can lead to stress which is accompanied by a strong biochemical reaction that can activate our fight / flight survival responses. When stress is chronic, the sympathetic nervous system is triggered too much and too often – leading to an ‘always on’ setting or ‘spike and crash’ pattern that can impact performance and wellbeing. As a consequence, working sustainably under pressure requires behaviours that support recovery and, more interestingly, renewal.

As Richard Boyatzis wrote in “Thrive and survive: Assessing personal sustainability”:

“Cumulative stress contributes to a loss of engagement and cognitive functioning, and it reduces learning from coaching, training, or education.”

To prevent this happening, Boyatzis maintained that “the only antidote is renewal in terms of the arousal of the parasympathetic nervous system.” That’s because our parasympathetic nervous system calms us down after a period of sympathetic activation. These two branches of the autonomic nervous system work in tandem, an accelerator and a brake if you will, revving us up and slowing us down. When they are in harmony, all is well; however, if there is dysregulation, then problems follow.

Given its importance, it is strange that we are not more explicitly aware of the value of renewal activities on the parasympathetic nervous system. Happily, we do know this implicitly and often naturally self-orientate towards them. Helpfully, they are also integrated with many social conventions, earning them a place in our rituals, hobbies and traditions.

Types of renewal activities

Considering what there is to gain from renewal activities, what exactly are they?

Broadly speaking, they can be categorised into four themes – all of which can stimulate that all-important parasympathetic nervous system. When choosing, the key is to find something you enjoy, so it doesn’t feel like a chore. If it’s fun for you, you’ll do it regularly. And, when it becomes a habit and part of your regular routine, you’ll start to reap the rewards from your consistent practice and become more resilient in the process.

1. Social renewal activities

Going out for a meal with friends or family is so much more than having a catch-up. When you’re laughing with loved ones, you’ll start to relax, alleviating tension in your body and brain and re-regulating your nervous system. Other social renewal activities to recharge your batteries are playing fun games with others, sharing in collective experiences like listening to music or singing or spending quality time with a much-loved pet.

2. Manual renewal activities

If you like to do things with your hands, trying out some craft hobbies can be a fantastic way to take your mind off work and relieve any pressure. For good reason, mindful colouring has seen a surge in popularity in recent years. Or many people, who became keen gardeners during the pandemic, still enjoy their green-fingered hobby’s mental and physical benefits. You could also try your hand at painting, pottery, knitting, woodwork, flower arranging and, believe it or not, with the right mindset, even household tasks like washing up or folding washing can serve this purpose.

3. Slow movement renewal activities

The advantages of high intensity exercise are well reported, but these are more of a sympathetic activity. For renewal activities, movement should take a slower pace. Walking is the prime example and one that can be done anywhere, with anyone. Yoga is another great renewal exercise, as are slower-paced martial arts like tai chi or qigong. Dancing is another great example of a renewal activity as could be light physical work of a practical nature around the house or through volunteering.

4. Reflection renewal activities

Finally, finding time to reflect can be a highly effective renewal activity. If you have faith, this could include prayer and meditation, but if not, a secular mindfulness practice can serve a similar purpose. Walking is, again, another wonderful activity that’s great for reflection – especially when in nature. But really anything that you do that allows your mind to slip into neutral, wander and return, has great value.

Adding renewal activities to your list of things to do

When it comes to renewal activities, there is no better time to start than now.

However, by definition, people who need them most don’t seem to have time. Finding space in your day can be challenging but is essential to being able to sustain your performance and wellbeing for anything but the short term.

It might seem that taking time out is a diversion that stops you from working through your to-do list. However, prioritising a renewal activity will ultimately make everything on that list easier to complete. Your mind will be clearer, your mood better and you’ll be more efficient.

Renewal activities also inoculate us to the effects of pressure. They build our tolerance to stress and paradoxically enable us to accomplish more, whether that be in a the financial services or otherwise.