92 THE INVESTMENT TEAM
Because this team was planned to foster dynamic tension—in
other words, it was constructed to have each of the preferences
represented—there will never be a resting point for the team. The
leader’s job is to continuously monitor the tension in the group,
sometimes encouraging more debate when things go flat, and at
other times reining it in. The image is that of a guitar, which can
produce beautiful music only if the strings are appropriately tight.
Too tight, they snap. Too loose, they don’t produce a pitch. The
leader on this team has a difficult job, daily watching the dynamics
of this group.
The results so far? In 1999 the team’s portfolio returned 25.13
percent, as opposed to the S&P 500 (less tobacco and liquor) 22.48
percent. They outperformed by 265 basis points. Not bad for the
first year, especially given the very conservative risk posture, and
a tracking error of less than 2 percent.
Of course, one year means very little, but there is a side benefit
that isn’t measured in the portfolio results. The team is committed
to having fun as well as outperforming the S&P. With this as a
goal, they win regardless of the numbers. As Warren Buffett says,
“I tap-dance into work each day.”
This idea of diversifying the talent to get a more creative envi-
ronment is catching on with other financial concerns. Two major
banks have added the intuitive preference to their senior manager
level. At Sovran Bank, for example, management used the MBTI
to add the visionary element to the senior team. Consultant R.
Steven Terrell, who worked with Sovran’s management, said that
Sovran “has attempted to integrate strategic, visionary leadership
with traditional, conservative bank management practices.” He also
noted that “[k]nowledge about type distribution at Sovran has
proven to be very useful.” Figure 11.2 details Sovran’s conscious
choice to add more intuitive-creative types at the highest level of
the corporation.
Likewise, a major bank in South Africa used a similar strategy,
with the result that three-quarters of its senior management has a08-13 ware 92 1/19/01, 1:11 PM