Do leadership and culture matter in money management firms?
Yes, argues Jim Ware, who in his new book "Investment Leadership: Building a Winning Culture for Long-Term Success," maintains that firms with strong leadership and healthy cultures do best over the long haul.
In a nutshell, Mr. Ware applies the Myers-Briggs personality test to money management firms, to see whether they have leaders with the right strengths and balance across the staff.
Mr. Ware singles out William Blair & Co., Brandes Investment Partners LP, MFS Investment Management, Aronson + Johnson + Ortiz LP and Vanguard, among others. But Mr. Ware, along with co-authors Beth Michaels and Dale Primer, picked Ariel Capital Management Inc., Chicago, as their poster child.
Focusing on values of truth, integrity and hard work inspired by founder John W. Rogers Jr.'s parents, Mr. Ware describes how Mr. Rogers' interest in people, relationships and values are embodied in the company, which manages nearly $14 billion in small-cap and midcap equities.
In fact, "John's vision of being more than just an investment management firm, and having a broad impact on the community" reflects citizenship values one found in high school that apparently disappear in adulthood, explained Ariel President Mellody Hobson in an interview with Pensions & Investments.
The firm's vision is expressed in Ariel Community Academy, a small public school in Chicago sponsored by the firm. Besides its small class size and required parental involvement, the school also has a financial literacy program.
Mr. Rogers is an "INFJ" under the Myers-Briggs test: introverted, intuitive, feeling and judging. Mr. Rogers' preference for "feeling," which is characterized as values-based and tender-hearted — as opposed to "thinking," which tends to the logical and tough-minded — was the one big surprise, Mr. Ware wrote.
That type of "communalist" personality is focused on people and relationships, and ethical behavior and values, and is not usually found in money managers, he wrote.