I read a great article last week from Simon Kuper in the FT regarding FC Barcelona’s current financial problems.  In it, there are some comments that a lot of players join Barcelona with ‘imposter syndrome’, where you don’t think that you are good enough to do your job or be part of the team.  I’ve seen this in our industry too and it’s really difficult to overcome.  It’s often found in teams with a strong figurehead who is looked up to through respect or sometimes fear, which you can clearly see with Lionel Messi at Barcelona.  If the figurehead is too strong a character and the team isn’t supportive, ‘imposter syndrome’ can be career ending for the individual and lead to dysfunctional teams.  It is often tied to a lack of confidence, however another trait is more common and arguably more dangerous in our industry, which is of over-confidence and grandstanding. 

Over-confidence is common; 93% of Americans think that their driving skills are above average and in a recent YouGov survey, 23% of men thought they could beat a King Cobra snake in an unarmed fight.  In our industry, if you don’t know the answer to something, it’s often seen as a weakness; you need to be seen to know everything.  I see a lot of ‘commentators’ and ‘market views’ that are predicting events and returns that are often sensationalist.  They are usually wrong, however it’s not usually about what they are saying, it’s just to get attention, press coverage and importantly to sound like they know what they are talking about.  It seems that the appearance of being clever is more important than being good at your job; image is everything.  It leads to a lot of people believing their own hype, which often leads to poor outcomes.  Having someone like this in a team (they usually lead the team because of their over-confidence), combined with a team member with ‘imposter syndrome’ will lead to ineffective teams with unsynchronised thinking and outcomes.

In the investment management industry, it’s common for teams to be led by a single individual who is highly respected and revered (usually the over-confident one).  It means that it can be difficult for other members in the team to have the confidence to offer alternative thinking.  This results in ‘group think’ and career risk for team members who have different views.  If you go against the grain or invest in ‘riskier’ assets, your career at the firm might be short-lived.  It’s easy to see this in the industry, where large firms are centralising their ‘buy lists’ and due to the size of assets under management, can only invest in large, liquid assets.  It’s easier to buy something that everyone else is buying rather than put your head above the parapet, especially with an over-confident boss who will be the first to criticize if it goes wrong.  I suspect this has become worse with home-working, as the UK business secretary suggested recently saying “it probably makes sense to actually meet colleagues and actually build a network (and) learn from other people”. 

It’s often difficult to challenge those over-confident, grandstanding types because of their character.  Their over-confidence is usually hiding insecurity and a lack of knowledge, which they will fiercely guard against from admitting (remember it’s seen as a weakness not to know everything).  However, a lot of people aren’t aware of their weaknesses and are open to positive criticism, although there needs to be the right culture and forum to allow for it. 

Last week we had a chat with an external, independent strategist, which is aimed at challenging our own ideas and thoughts.  This week started with our Investment Committee, which we invited another independent person, to again challenge our ideas and thoughts.  We appreciate that we aren’t perfect, that we don’t know everything and that we’re a small team, so external challenge is critical.  We try and incorporate an open culture, where challenges are welcome along with positive criticism. 

Now that Lionel Messi has left Barcelona, it will be interesting to see how that team develops with the loss of such an inspirational and revered figurehead.  If you run a team yourself, I’d advocate that you review the team dynamic and ask yourself if there is an environment whereby any member has the ability, willingness and courage to openly question consensus and how you incorporate external challenge? 

Thanks for reading.