Optimizing Investment Performance Through Human Capital

“The failure rate of most new corporate strategies is roughly 70% in all studies. Almost always the root cause of that failure is about talent, decisions about culture, about humans not wanting to go in a different direction, and the company's inability to solve that human problem. When you measure employee engagement, only 20% of people rate themselves as highly engaged. So this is an 80% failure rate.”— Matt Breitfelder

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Leadership & Management · Economics & Markets · Psychology & Behavior

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Human capital bottleneck drives 70% strategy failure

“Google ran studies. Project Oxygen: their hypothesis was maybe managers are so bad, we should just eliminate the role. Let's test what are the characteristics of a great manager. They found a great coder reporting to a good manager, if you move them to a bad manager, their performance collapses. This actually really matters. The number one thing in their study was managers who know how to coach, who played chess not checkers, get better results.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Bad manager collapses performance; safety enables debate

“Pete's system is very focused on caring and competition as the two most important ingredients. If you're always competing with yourself to be better and better and better, then competing against other people kind of takes care of itself. As the coach, if you care about your players, you create psychological safety for them and you help them do the inner game work to clarify their mind, then you're unlocking their full potential. It's a very human path into what you achieve on the field.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Caring creates safety; competition drives excellence

“Read two books, Do What You Are and StrengthsFinder 2.0. I'm a big believer that we need to root ourselves in strengths more than anything. The world of leadership development has moved from the heroic model of become a living God that's great at absolutely everything to a much more realistic model: we all have natural gifts, natural spikes. Focus on that first, because going from an A- to an A+ is where we should put all our energy. Going from a C to a B matters depending on what your job is.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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A- to A+ path shorter than C to B

“The most successful people have an unusual level of beginner's mind and humility, because if they're at the frontier or edge of their profession or craft, they know exactly what their gaps are. Especially in investing, investing is a probabilistic game, so you're going to be wrong regularly. Those people are really hungry for, what am I missing? What is my blind spot? You often see this pattern in rising stars who plateau.”— Matt Breitfelder

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Psychology & Behavior · Leadership & Management

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What got you here won't get you there

“I'm a big fan of Jim Collins' Good to Great. The goal for any company is outperformance over a long period of time. That book is so interesting because even though it's 20 years ago, the concept is really durable: the goal of any company is to outperform over a long period of time. And reversion to the mean is an almost unstoppable force. It happens to every company, and it happens to every team, and it happens to every human.”— Matt Breitfelder

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Strategy & Decision Making · Leadership & Management · Psychology & Behavior

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Fierce resolve plus humility beats mean reversion

“Three lessons from high stakes trade negotiations: First, preparation. These are very complicated negotiations. We wanted to go into those discussions knowing everything, every possible facet inside and out. Second, building strong relationships with the folks on the other side. Getting to know them, breaking bread, building the goodwill you knew you were going to need when it got down to the finer points. Third, it's a long game.”— Matt Breitfelder

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Strategy & Decision Making · Psychology & Behavior

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Preparation, relationship, long-game negotiation framework

“Two tools that work for every company on earth are an annual employee engagement survey and 360 feedback. The employee survey is when your people tell you what they think is working and what's not. Whether you agree with what they're saying or not, you should show them the respect to listen to that information and sit with it and really understand where they're coming from.”— Matt Breitfelder

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Leadership & Management · Operations & Execution

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Two universal tools: engagement survey, 360 feedback

“Ron Heifetz, who wrote Adaptive Leadership, has this wonderful phrase: you need to get on the balcony. When you're in the play, it's kind of hard to see it. The task of anyone in a struggling team is how do I get on the balcony and try to look at this objectively from an arm's length perspective, clarify it, and then be really clear about are people willing to do the work and sign up for what we all agree needs to happen or not?”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Get on balcony: view objectively from distance

“The biggest observation I had was this pattern across CEOs who came to visit our classroom: they tended to land on human capital, talent and culture as the most important part of their job and the most fulfilling part of their job. The retired CEOs would say, 'My legacy, my impact, the long game part of my work was talent and culture, because that stuff could live on. Those people I developed would thrive for many years to come.”— Matt Breitfelder

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Leadership & Management · Strategy & Decision Making

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Best CEOs spend one day weekly on talent

“Marc Rowan loves the Peter Drucker quote of culture eats strategy for breakfast. As CEO, he's incredibly focused on how do we make sure we're not diluting what's special about the place and the magic of our model as we hire all these new areas of expertise. We want it to still feel like a small village where you have a personal touch, where you know your colleagues, where you care about your colleagues, where it feels like a small company, but where we can take on some of the hardest, biggest in...”— Matt Breitfelder

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Leadership & Management · Culture & Society

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Platinum rule: treat people how they want

“When any team gets stuck, you're trying to shift the energy and reframe it. My signature is I use humor a lot. It makes work more fun. It also helps disarm people, and sometimes you have to take that situation and just laugh about it. Sometimes you just have to call a timeout. I think we're a little stuck. Let's go take a walk around the block. The strategic pause is helpful when you're stuck and it's getting heated. Another move is change your location. Just get out of that space.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Humor, timeout, location change unstick teams

“There's a number of tools on self-assessment: Myers-Briggs, HBDI, DISC. You're helping people understand what makes them tick, then sharing that with the team so you can optimize the collective work. Work from the Harvard Negotiation Project on difficult conversations: deescalating emotion and passion. There's when passion is helpful, and when passion of conflict is no longer helpful.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Move problem to side; partners face it together

“Feedback is the breakfast of champions, but poorly delivered feedback oftentimes makes performance worse, not better, because we know how humans react. If you're not tuning into that individual human and you're treating it like an engineering problem, you're just as likely to make performance worse, not better. Those insights are really important, and if we're scientific about it, we can actually crack it because it's pretty straightforward.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Bad feedback delivery makes performance worse

“Pete Carroll is one of the most successful coaches in history. He's one of the few that's won a national championship in football and a Super Bowl. He was famously fired by the Patriots and replaced by Bill Belichick. Coming out of that, he really clarified his philosophy. He was inspired by John Wooden. Pete learned a lot from Tim Gallwey, who wrote The Inner Game of Tennis, and Michael Murphy, who wrote The Kingdom of Golf.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Mental game equals physical game in performance

“Especially for people who've been really successful, don't wing it. Have a plan. Be very specific about what you're working on to get better at. If you are not walking around with a list of one to three things where you know you need to get stronger and better, and you're not being vulnerable asking people for feedback and you're not working a plan, you're leaving way too much value on the table.”— Matt Breitfelder

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Leadership & Management · Psychology & Behavior

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Always work 1-3 specific improvement targets