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Enhancing Investors motivation when working from home

Back in March 2020, the home experiment began. Technology set-up, workspace optimised, daily routines established and key investment process pillars underlined.

Extreme market volatility, a new stark economic reality and huge social uncertainty followed, creating stress and acted as negative motivators for the majority of active investors.

During the subsequent 4 months, I have observed a broad array of investors and I continue to learn, not only about the catalysts for negative motivation, but potentially more importantly, the actions that can be taken to enhance motivation.

Notwithstanding these ‘out of comfort zone’ beginnings, many PMs have subsequently thrived in a work from home environment. By ‘thrived’ I mean, feel like they are broadly on an upward trend of motivation in their role as professional investors.

Firstly and importantly, positive motivation wasn’t necessarily correlated with short term fund out-performance.

Let me explain.

Motivation involves associating an activity with a reward. You’re motivated to ski because you enjoy the sensations of perhaps freedom and speed. You’re also motivated to snack on the olives not the crisps, because you’ll be rewarded with a stable or lower reading on the scales!

Clearly these are two different kinds of motivation, one is associated with the activity itself the other concerns the outcome.

Doing the job because you get paid versus doing the job because you love the process!

Being positively motivated in the investment world involves being fascinated by your process.

Interestingly and slightly tangentially, one boutique firm I work with decided to try and proactively support their key investment teams by focusing on motivation levels.

The innovative approach resulted from a question to the CIO in late March which went something like: “Do you think motivating your investment teams is a fundamental priority right now and if so, how will you monitor how motivated the PMs are from week to week ?”

He replied thoughtfully, “Yes motivation is key and I don’t know, but I do feel Peter Druckers’s famous quote might be important,

“If you can’t measure it, you can’t improve it”

Fast forward to late May and I revisited the topic with the CIO:

“I wanted to show them we cared about their motivation levels whilst working remotely. So we sourced an online tool to measure their habits, priorities and motivation each month. The data could be translated into a quantitative score for team motivation and using these scores and regular group discussions, we think we have been able to help PM’s reduce their fears and look at actions that assisted with motivation”

What actions help motivation? I have a toolkit of positive motivators for PMs and the following are 3 with significant impact:

  • Clarify your investment beliefs into a concise scripted philosophy that you can communicate consistently and eloquently - What is unique, somewhat unique or memorable about my approach to market inefficiency? How do these beliefs link to my personality or values as a PM. In the end the client just wants to understand your authenticity as a manager of their assets. Your portfolio must in part allow you to express who you are and what you feel.
  • Create an explicit, concise, self-sufficient framework to do 2 things. Firstly, capture what assets meet the minimum requirements to be chosen to be part of your portfolio and secondly understand how these assets sit side-by-side in a portfolio that manages risk appropriately. There is stuff we know, don’t know and can’t know. We can clearly manage this uncertainty better by trying to ‘know more’ of the key things. Most PMs manage this implicitly but far better to have a tangible tool that expresses your investment process at any time.
  • Learn to use tools that help you understand your daily productivity. Is there too much attention on the urgent present versus the important future? The longer-term is critical but often hijacked by the lack of time or energy to focus on it. Such a tool will result in the realisation that much of what PMs do is habitual and often harming productivity.

The bottom line,

You can’t thrive as an investor at home or back in the office, unless you’re motivated and thus immersed in the processes of doing it.

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