most important lesson I have learned is never to forget that invest-
ment management is a people business” (Managing Investment
Firms: People and Culture, AIMR Publications 1996).
Yet another leader in the field, James Rothenberg, President of
Capital Research, says that there are two models in the investment
profession: the star model (depends on a few stars, like Michael
Jordan in basketball) and the team model (depends on collabora-
tion). In Rothenberg’s words, “Capital has very few stars that
anyone would recognize. Only one or two individuals get much
press coverage, which is all part of our effort to promote team-
work and cooperation” (Managing Investment Firms: People and
Culture, AIMR Publications 1996).
Investment companies make the same claims in full-page ads.
One Group Mutual Funds touts its “Solid Performance built on
Discipline, Consistency, and Teamwork.” Another leading firm,
Franklin Mutual Series Fund, boasts that their “team’s activist
approach has proven itself through market upswings and down-
swings.”
One of the trends in the investment business is hiring entire
teams rather than one high-profile individual. A recent Wall Street
Journal headline read: “Teams of Fund Managers Jumping Ship.”
The article noted that “[i]n recent months, Merrill Lynch & Co.
lifted a 12-person group of indexing specialists from Deutsche Bank
AG, which turned around and nabbed eight officials from State
Street Global Advisors” (Oct. 15, 1999).
The major firms are using a portfolio concept—diversification—
in the management of their people. Instead of putting all the eggs
in one basket, and depending on a Peter-Lynch-like star, the firms
are hiring teams; if one individual leaves, the remaining team can
still boast a good record with an “intact” team. This strategy of
plucking entire teams away from competitors is a reaction to the
team approach.
All of this emphasis on teams is fine, but it may not reflect
reality Putting four people in a room and saying, “Okay, you’reTeamwork Today? 6908-13 ware 69 1/19/01, 1:10 PM